Article Courtesy of The Miami
Herald
By Michael Sallah and Jay Weaver
Published August 10, 2016
For Opa-locka Mayor Myra Taylor, the Vankara School
represents her legacy, a sprawling, neatly landscaped institution that educated
generations of children in Christian values.
There were morning prayers and required uniforms at the
private school, along with a curriculum grounded in the three Rs.
But when it came to paying its bills, the school broke its own rules.
Year after year, the mayor’s school that once hosted fundraisers for politicians
ran up tens of thousands in water and sewer charges at the campus, and never
paid the bills.
The charges reached $30,000 in 2010. The
following year, the amount doubled, and to this day, Vankara
owes nearly $120,000 for the services — with no effort by the
city to stop the water or demand the money be paid during its
worst economic crisis.
The school wasn’t the only customer to
benefit from the city’s largesse. Opa-locka turned its water and
sewer system into an operation that let scores of businesses and
residents with connections to the city tap into Opa-locka’s most
precious resource while the city was edging toward insolvency,
the Miami Herald found.
“At the least,
it’s gross misfeasance. At its worst, it’s pervasive corruption.
Keith Carswell, former budget director
Apartment landlords were allowed to skip payments for tens of
thousands in water bills. Business owners opened new accounts
without paying the old ones, former administrators say. |
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Former Opa-locka Assistant City Manager Jordan Leonard at
the old Opa-locka City Hall on Wednesday, Aug. 3, 2016. Leonard is a key
whistle-blower in the city’s water corruption case.
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Apartment landlords were allowed to skip payments for tens of
thousands in water bills. Business owners opened new accounts without paying the
old ones, former administrators say.
Some city workers even turned the program into an illicit enterprise, cutting
off the water of customers, and then charging cash to turn it back on —
pocketing the money. When one woman fell behind on her bills, she agreed to have
sex with the meter reader to keep the water on in her home, police reports
state.
“It’s shameful,” said Jordan Leonard, a former Opa-locka assistant city manager
who tried to stop the practices. “What they are doing is criminal. There is no
other way to explain it.”
The disclosures come at a time that a state oversight board is trying to save
the city from bankruptcy just months after the governor declared a financial
emergency in Opa-locka.
Taylor, first elected mayor in 2002, did not respond to an interview request.
Her husband, Bishop John Taylor, told the Herald the family was not “running
away” from its obligations. “We fully intend to pay this bill,” said Taylor, who
added the school had agreed to settle the debts.
However, records show the school, which is now closed, has not made a payment on
the delinquent bills in three years. The family’s property, with its signature
buildings featuring a mural of King Tut on the wall, is now in foreclosure.
Sophia Miller, a former city finance director, said she was ordered by a
supervisor in 2013 to examine the school’s delinquent accounts and look for a
way to “write off” $30,000.
Miller, a certified public accountant, said she refused to alter the records in
the city’s billing system. “I went to the city manager and told him that they
[her supervisor and others] were going to get into trouble,” she told the
Herald. “I was not going to be the one who went to jail.”
Just last week, two top administrators, David Chivertonand Gregory Harris, were
charged with benefiting from the troubled water program.
Harris, 44, a public works supervisor, was charged with taking a cash bribe from
a businessman to keep his water running last year. Chiverton, 51, a former city
manager who oversaw Harris, was charged with a similar crime involving that same
businessman and others.
Even with the arrests, the misconduct in the water program remains one of the
least examined activities in a city that has been under an FBI corruption
investigation for the past three years.
To this day, little has been done by law enforcement to track the extent of the
illegal activities in the city’s largest operation — or the impact. Over the
past five years, the program, which services about 5,000 customers, has lost
millions in revenue, records show.
The activities are taking place at a time the water costs are soaring in
Opa-locka, stirring outrage at City Hall. Every month, residents show up at
commission meetings waving their bills, some doubling or more from the year
before, records show.
Longtime resident Sandra Collado, who lives in a modest, three-bedroom home, was
stunned when she opened her monthly bill in January for $457— seven times her
average cost. “I’ve never received a bill like this in my life,” she said. “It’s
not only me. A lot of people have this problem.”
While customers have complained about bills, the city has been engaged in
another practice that could cost it even more.
In the past two years, Opa-locka officials have secretly tapped into a fund that
was not supposed to be touched: the deposit money paid by residents when opening
water accounts.
Though the money is to be refunded when customers close their accounts,
officials withdrew the funds — a total of $1.8 million — to cover budget
shortfalls without a public vote or promise to pay it back.
Keith Carswell, a onetime budget director, said the withdrawals were unethical
and left the city potentially liable. “At the least, it’s gross misfeasance,”
said Carswell, who was fired in June after challenging the city over fiscal
policies. “At its worst, it’s pervasive corruption.”
For a city that has struggled with stagnant property values and crime, the water
and sewer program was supposed to be a lifeline, a vital source of income for
Opa-locka. Across Miami-Dade, the utility programs generate millions for their
cities.
But at every turn, Opa-locka leaders allowed the program to be exploited,
costing the city untold thousands of dollars.
For years, the mayor’s school, Vankara, was secretly getting breaks on its water
bills, with delinquencies totaling $28,881 in 2009. Every month, the bills kept
rising while the debts simply rolled over. At times, the city imposed liens,
then lifted them without forcing the school to pay up.
Not until a class-action case pressed by residents over unfair penalties on
water customers did the practice of waiving debts gain any scrutiny. At trial,
assistant finance director Faye Douglas admitted the city had a “friends and
family plan” that gave special treatment on water bills to politicians, city
workers and other insiders.
In addition, she said the city had an “informal policy” of not cutting off the
water of commissioners and others who didn’t pay their bills.
Ultimately, Miami-Dade Circuit Judge Victoria Sigler ordered the practice to
stop, calling it “arbitrary, capricious and discriminatory” in a 2007 ruling.
But the city kept waiving the delinquencies.
As the Vankara school expanded, so did its water invoices. In 2010, the same
year the mayor was re-elected, the total was $30,699 — a bill thathad
accumulated for years. Two years later, it grew to $57,741.
In 2013, Miller, then assistant finance director, was told by her supervisor,
Ezekial Orji, to “adjust” some of the debt by writing off about $30,000.
She refused, she said.
Instead, she pushed for the city to stop supplying water to the school, but she
said her request was turned down.
The shakedowns were so brazen that one businessman stormed into City Hall
earlier this year to complain that a meter reader had demanded cash to settle a
late water bill at the owner’s laundromat, said a former budget director.
Shortly after, she was removed from duties overseeing the water bills. City
officials later erased two of the school’s bills — $12,410 and $3,558 — on Aug.
21, noting them as “settlement adjustments.”
By last year, the school’s water debts mushroomed to $112,175 — one of the
highest bills ever incurred in the city. Orji, who retired as finance director,
did not respond to interview requests.
Vankara wasn’t the only beneficiary. The Opa-locka Flea Market, which has
employed city commissioners and kept deep ties to City Hall, has run up an
overdue water bill topping $126,000.
Owner Scott Miller said he has complained about what he considers “inaccurate
water bills generated by a corrupt Opa-locka water billing system.” But to this
day, his bill remains the largest owed to the city.
Another businessman with connections to Mayor Taylor and her husband has owed
the city $13,000 in overdue bills. Contractor George Howard acknowledged he owes
the money from his apartment complex on Opa-locka Boulevard, but doesn’t believe
he’s been granted any “favors” because of his political connections.
“We’re working out a payment plan,” said Howard, who has not paid a bill in
nearly three years.
It wasn’t until the arrival of a new administrator at City Hall that the unpaid
bills from the Vankara school and other water customers caught the attention of
law enforcement.
Jordan Leonard, an assistant city manager, said he was struck by the fact that
Opa-locka’s program — which buys water at wholesale rates from Miami-Dade County
— was losing money each year.
With the approval of his supervisor, Leonard initiated an investigation in 2012
that turned up one of the most troubling discoveries he had ever seen in local
government, he said.
While examining the computer billings — scores of accounts — Leonard found that
city employees with access to the system were shutting down delinquent accounts,
some with overdue payments, and then opening new ones at the same address, he
said.
“They were able to actually wipe out the debts,” Leonard said.
In March 2012, Leonard wrote a scathing memo detailing several suspicious
accounts, including the Vankara school, and urged the commission to pay for a
forensic audit.
The memo was turned over to Opa-locka police, who began an internal
investigation that turned up even more problems.
In addition to the suspicious billings, investigators found an entirely new
level of corruption rarely seen even in large cities.
Records show that a cadre of public works employees had spent years creating a
“parallel” water system by bypassing the city’s meters and installing illegal
“feeds” into homes and businesses.
Instead of the city getting paid each month, the customers would pay cash —
monthly fees of $40 to $100 — directly to the employees.
Opa-locka officer Gene Siegrist said the scheme had first surfaced in2008 when a
meter reader was caught striking secret deals with numerous homeowners. One
woman admitted to police that she agreed to have sex with him to keep the water
running in her home. But the charges were dropped against Willie Smalls, the
meter reader, after witnesses began to back off. He is still working for the
city.
By the time Siegrist picked up the case in 2012, the practice had become a
burgeoning business, with public works employees removing meters from homes and
installing PVC pipes known as “jumpers” so customers could keep getting water
without having to pay the city. Instead, the homeowners were now paying the
employees directly — in cash.
Deputy Chief Antonio Sanchez, who supervised the probe, remembers when his
officer came in to the office to talk about the findings.
“He said to me, ‘Chief, you are not going to believe what we have. This is like
nothing I have ever seen,’ ” Sanchez said. “It was big.”
At least 20 homes were found taking part, and many more were suspected. But
before police could probe deeper, the case was shut down. Police were told by a
new city manager, Kelvin Baker, the investigation would be handled internally at
City Hall, Sanchez recalled.
“He said he was under a lot of political pressure,” said Sanchez, who later
resigned.
Meanwhile, city commissioners agreed to pay for a forensic audit of the water
program — a study to pinpoint customers getting water illegally — but they
shelved the plans.
By the end of 2012, Leonard and his city manager, Bryan Finnie, were forced to
resign after commissioners decided to hire a new manager. Leonard said he was
warned by Terence Pinder, then a former commissioner.
“Terence just told me the people weren’t happy,” Leonard said. “I blew the
whistle on water and sewer. They didn’t want me around.”
Kelvin Baker, the city manager who succeeded Finnie, did not respond to
interview requests by the Herald.
Sanchez and his officer took the case to the Miami-Dade public corruption unit.
But within weeks, the county closed the case after Opa-locka officials failed to
turn over the billing records — evidence that was critical to the investigation,
reports stated.
In the ensuing years, the abuses continued to spread in a program that was
bleeding an average of $1 million annually.
This time, the scheme wasn’t carried out by meter readers, but the most
influential administrators and politicians in the city.
In case after case, three key leaders emerged to use their power to force
business owners to pay bribes in order to get licenses and water connections,
records show.
Luis Santiago, a newly elected city commissioner, David Chiverton, then an
assistant city manager, and Gregory Harris, a public works supervisor,
threatened to shut down businesses and turn off their water if they didn’t pay
hundreds of dollars at a time — even enlisting code enforcement officers to
pressure them, court records show.
But it wasn’t until a few business owners stepped forward that the FBI began to
penetrate the inner workings of the water department. Frank Zambrana, a
47-year-old storage equipment operator who feared losing his business, agreed to
go undercover in a probe that would reveal how far the scheme had spread.
Wearing a video recording device, Zambrana paid $300 in cash to Harris to get
his water service turned back on in 2015. What struck the frustrated
businessman, however, was the notebook carried by Harris that showed dozens of
customers making under-the-table payments for water.
“There were a bunch of names, phone numbers and monthly payments,” Zambrana told
the Herald. “My bill was $50 a month, and I could use as much water as I
wanted.”
In another case, business owner Francisco Pujol carried a secret recording
device when he paid Santiago $300 in cash for a water connection earlier this
year. Santiago, who is expected to be charged, did not respond to interview
requests.
The shakedowns were so brazen that one businessman stormed into City Hall
earlier this year to complain that a meter reader had demanded cash to settle a
late water bill at the owner’s laundromat, said Carswell, the former budget
director.
The owner said he secretly videotaped the shakedown on his cell phone. Chiverton
and current City Manager Yvette Harrell were told about the complaint, and
referred it to Harris for investigation.
“It didn’t go anywhere,” Carswell said.
While the FBI targeted the suspicious payments, no one at City Hall was trying
to stop the other abuse of the water program — the erasing of delinquent bills.
Leonard, the former assistant city manager, said unless the city conducts an
investigation of every property, there is no way of knowing how many customers
received special treatment by having their debts wiped off the books.
Raising even more questions is a recent county study that shows hundreds of
occupied homes and businesses in Opa-locka don’t even appear on the city’s
monthly billing records. Of the 663 properties in the study, Herald reporters
visited two dozen and found that half are hooked into water lines.
Leonard said the homes and businesses getting water are “not a mistake,” but are
part of a larger “systemic problem” that has deprived the city of critical
revenue at a time it needs it the most.
Carswell said he recommended in April that the city conduct an audit on every
property in the city to root out corrupt activity and to make sure the city was
accurately gauging water use.
Leonard said the breakdowns can be traced partly to chronic mismanagement — and
corruption. The few times that administrators tried to deal with problem, they
were ousted from their jobs.
“There is an expectation that government is going to protect you,” Leonard said.
“That’s really the sad thing.
“Think of all the people at City Hall who knew this was happening and what they
could have done five years ago to stop it. You wouldn’t be in the position you
are today,” he said. “It’s beyond just the abuse of the position. It’s the abuse
of the trust. Their first priority was not to protect the residents and the
customers. It was to make money.”
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