13 arrested in massive Palm Beach County public corruption case

Article Courtesy of The Palm Beach Post

By Pat Beall and Cynthia Roldan 

Published August 31, 2011

No gift was too extravagant.

Caribbean cruises, NASCAR races, Disney vacations, expensive jewelry: all were lavished on public officials by a Wellington equipment company determined to secure city and county business at all costs, Palm Beach County State Attorney Michael McAuliffe charged Friday.

The real price may be decades behind bars. Chaz Equipment Co. President Gary Czajkowski is facing up to 360 years in prison for his alleged role in a six-year-long scheme that generated 77 criminal charges against 13 individuals. Seven current and former city and county officials were netted in the sweep, which alleges everything from racketeering to money laundering to unlawful compensation.

"This is the type of corruption that we call 'Corruption Tango,' " McAuliffe said at a morning news conference with Palm Beach County Sheriff Ric Bradshaw, Boynton Beach Police Chief Matt Immler and Palm Beach Police Chief

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Kirk Blouin. "It takes multiple players in a dance for their own benefit both in the public sector and the private sector."


Unlike previous indictments of public officials, this flurry of charges doesn't involve elected officials. Instead, mid-level bureaucrats were targeted. "In some ways this is more insidious in that you have people who ... have the levers and control of money," McAuliffe said.

In all, "Operation Dirty Water" tracked roughly $90,000 in such things as vacations, cash cards and gifts delivered to former or current employees of Palm Beach County, West Palm Beach, Boynton Beach, Wellington, Northern Palm Beach County Improvement District, Port St. Lucie and Sarasota County.

Chaz's Czajkowski was arrested in April of last year as part of a five-month joint investigation by the town of Palm Beach police and the State Attorney's Office. They accused the town's public works construction manager, Steven M. White, of awarding emergency construction contracts in exchange for cash. Then, Czajkowski faced a single count of unlawful compensation and up to 15 years in prison. Two months later, other municipalities came under scrutiny as a result of further digging.

"This is a spinoff case," said McAuliffe of Friday's charges. "It's the most recent installment of what happened in Palm Beach."

Named are James Hartman, who works for Palm Beach County's water system; Sean Woods, an employee of Port St. Lucie; Daniel Derringer, a former utilities superintendent with West Palm Beach; Anthony Lombardi, a 17-year employee of Boynton Beach, who prepares certain bids and monitors vendors; Clifford Danvers Beatty, deputy director of the Northern Palm Beach County Improvement District; Jason Faranda, a former employee of Wellington, who oversaw water distribution; David Cates, a former consultant with West Palm Beach; and Rodney Jones, a Sarasota County employee.

Also charged were Chaz employees Robert Wight, Bradley Miller, Kevin Trost and Shawn Petty.

In at least two cities, there were warning signs something was amiss. Wellington hired an investigator to look into claims by employees that Faranda had gone on a Texas hunting trip paid for by Chaz. Faranda reportedly admitted to the trip.

In West Palm Beach, both Cates, whose roughly $60-an-hour contract with the city involved consulting on the waterfront overhaul, and Derringer had been the target of an internal city inquiry, according to a person with firsthand knowledge of the investigation. Cates' contract was terminated in June 2010. West Palm was in frequent contact with law enforcement investigators, McAuliffe said.

Rehabilitation work on manholes was singled out in the charging documents. Chaz had a manhole contract with Delray Beach. Other cities could use that same contract's pricing for their own manhole work, a practice known as piggybacking, without putting the contract out to bid. In part to keep the piggyback contracts coming, according to the charges, Chaz showered officials with a steady stream of gifts and entertainment.

But that was "only one" of the issues, McAuliffe said. For instance, Beatty, deputy director of the Northern Palm Beach County Improvement District, was moonlighting with Chaz. In addition to the moonlighting, there were deer hunting and parasailing trips, as well as two trips to NASCAR events. Pressed by investigators on whether paid vacations presented a conflict of interest, Beatty said that he "thought nothing" of the NASCAR trips, according to court documents.

In Boynton Beach, Chief Immler said it's now unclear whether water and sewer work was ever done by Chaz.

"At this point, we don't know what the extent of the damage may be," Immler said. "There's concern on whether or not they even delivered."

As a result, Boynton, which placed Lombardi on administrative leave, is conducting "a forensic analysis of all contracts, bids, purchase orders and payments involving Chaz Equipment Co.," said the city manager in a written statement, including verifying that all work was actually performed. Additionally, it will "review all other projects Mr. Lombardi may have been involved in, regardless of the vendor."

Palm Beach County Administrator Bob Weisman said the county did audit its contract with Chaz in the wake of last year's Palm Beach indictments. It found no problems. In an e-mail to commissioners, Weisman wrote that, "The charging document did not list any specific illegal conduct relating to the contract or work performed," however, "Water Utilities will continue to monitor and follow-up on the investigation as more becomes known." Whether Hartman, who traveled to NASCAR events and the Walt Disney World Dolphin Hotel on Chaz's dime, keeps his job will be decided Monday, Weisman said.

The Northern Palm Beach County Improvement District has put Beatty on paid leave for the time being. Like Palm Beach County, the district audited its two contracts with Chaz last year and found no irregularities.

As a result of its own investigation, Wellington city manager Paul Schofield said, the city fired Faranda several months ago and presented their finding to the state Attorney's office.

"Clearly we are unhappy with what happened," Schofield said. "But we made sure we went to the state attorney's office with it. They did not come to us."

As a result of Faranda's case, Schofield says, city officials have made a couple of minor changes to their purchasing processes. Supervisors once allowed to make purchases up to $1,000 on their own now have to go through the purchasing department.

"It's probably costing us more to do things that way, but it's keeping us safe," Schofield said.

Meanwhile, there's every reason to believe a fresh slew of charges is already in the making. "This is definitely not finished," McAuliffe said.