By Terrence McCoy
By Allie Conti
By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
When a visitor arrives, West Palm Beach City Commissioner Jeff Koons drops the newspaper he's been reading, stands up, and shakes hands like a politician on the campaign trail, even though he was reelected just a few months ago. He suddenly announces: "We have an errand to run."
Hurrying toward the elevator on the fifth floor of West Palm Beach City Hall, he's headed to one of his favorite places in the city: the Ann Norton Sculpture Garden, of which he's a board member. In the hallway he runs into a bearded man, whom he treats like an old friend. He's Don Cochran, the city's infrastructure operations manager.
Koons says just one word, "Cordova," emphasizing each syllable. He's referring to a street in a quaint neighborhood in the southeast section of the city. Koons tells Cochran that he recently saw a road crew in the neighborhood, repairing the many dips in the road. They fixed the smaller ones, he says, but they missed the bigger ones.
"We've got good 'traffic calming' on Cordova," Koons jokes as they step into the elevator. The technical term to which he refers applies to cars that must slow for traffic bumps in parking lots. In other words, Koons' joke is also a hint, one Cochran has picked up on. He tells Koons that he'll see to his request.
Koons has good reason to be concerned about Cordova Street. It's where his girlfriend, Sherry Lee, lives.
This little demonstration of Koons' backroom talents is apropos for today's visit this May afternoon. Last November he and his wife, Mary Louise, divorced after 23 years of marriage. But the divorce, and the fact that Koons is doing a favor for his girlfriend, pale in comparison to what he admitted, under oath, during the divorce proceedings. Koons says he'll talk about all that, but first he must get to the sculpture garden, where he recently planted some small palm trees. They need to be watered.
Koons has plenty of explaining to do. During the divorce proceedings, his father, Bud, eliminated his son's $500,000 job as vice president of field operations for the Pepsi-Cola Bottling Company of Fort Lauderdale-Palm Beach. The Riviera Beach-based bottler is owned by the elder Koons' $165 million company, Central Investment Corporation (CIC), for which Jeff Koons worked for 28 years. Bud Koons would not speak to New Times for this article, and his son claims that he is simply on a "leave of absence."
Whatever his status with the company now, Koons admitted, in deposition and during the divorce trial, that he has used his $16,000-a-year job as a city commissioner to reap financial benefits for Pepsi. He explained that he's done dozens of political favors on the company's behalf.
Case in point: In early January 1997, Philip Arvidson, his boss at the bottler, left him a voice mail message asking for help in securing funding for a $60 million convention center to be built in West Palm Beach. In deposition Koons said that Arvidson told him Pepsi customers in the hotel-and-motel industry were worried because, after months of discussion, government funding for the center still wasn't available. The center, which has yet to be approved, is considered an integral part of an ongoing redevelopment program in West Palm Beach. If it's built, the argument goes, it's sure to attract tourists, who will pack existing hotels and create a demand for more. More hotels means more contracts for Pepsi. And who better to help secure public funding for the center than a city commissioner who happens to work for Pepsi?
Koons went to work for Arvidson by putting together a team of lobbyists, city staff, and county officials who headed to Tallahassee in May 1997. They lobbied the state legislature for an additional penny tax on hotels to help pay for the center. The proposal didn't fly that year, and Koons' position at Pepsi was eliminated by his father a month later. But, in the fall of 1997, Koons traveled once again to Tallahassee.
One of the state representatives with whom he met was Sharon Merchant (R-North Palm Beach), who says she assumed Koons was lobbying on behalf of West Palm Beach. He never mentioned his relationship with Pepsi, which continues to make him money -- in the form of a trust fund set up by Bud Koons. With Merchant's help the state legislature passed a bill in April that would fund the center with an existing tax.
There are political hurdles on the city and county levels to be overcome before the center is approved, but Koons accomplished exactly what his former boss at Pepsi requested. In deposition Koons referred to a letter sent to him after the bill was passed: "The manager of the Sheraton Hotel said, 'I really appreciate everything that your company has done and everything you've done individually on this.'"
Koons even explained how his efforts would help Pepsi down the road. "The other side benefit [of helping the hotel owners]," he noted, "is that, potentially, when they're looking for the companies that would be available [for] selling the beverages -- that if it comes to 'even steven' -- they're going to go with Pepsi, because they know in the long range that's a company that basically helped secure the convention center."
As soon as Koons has watered the palm trees, and after he's waxed poetic about the sculpture garden, he agrees to return to city hall to finally talk, on the record, about his divorce and the fallout. He settles into a chair in the commissioners' conference room and smiles when he's asked whether he considers his convention-center lobbying efforts a conflict of interest.
"I feel confident that I haven't done anything with a conflict of interest," he says. "But if the side benefits [of my actions] went to Pepsi, that's fine."
Koons' testimony under oath reveals the following. His full-time job at the Pepsi-Cola bottler consisted of using political connections to benefit Pepsi. Those connections were fostered by Bud Koons, who groomed his son to become a lobbyist for Pepsi and various soft-drink interests in Tallahassee and Washington, D.C. In 1989, when Koons became a city commissioner, Pepsi gained direct access to some of Palm Beach County's most influential political players. Although the recent divorce has strained the father-son relationship, Jeff Koons continues to work on the company's behalf.
Reminded of his testimony, Koons -- wearing sneakers, work pants, and a white polo shirt emblazoned with his name and political title -- doodles on a piece of paper. It's not surprising. He may be 50 years old, and his brown hair may be thinning and showing signs of gray, but otherwise Koons exudes a youthful demeanor.
As he continues to draw, he repeats that he's done nothing wrong, that his actions have helped both his constituents and Pepsi. He then slides his drawing, featuring four dark circles, across the table. "See these circles?" he asks, rhetorically. "Sometimes in politics you have to go where it overlaps."
While the circles in Koons' drawing don't literally overlap, his public and private interests certainly do. The help he gave Spanky's Sports Bar is a good example. Aside from alcoholic beverages, the popular West Palm Beach tavern serves only Pepsi products. In early 1997 owner Tony Simons wanted to have a wall-size mural painted on a side of the building that is visible from Clematis Street, a major road running through the heart of the city's bar-and-restaurant district. City code, however, prohibits billboard-size advertising on buildings. Simons mentioned the problem to Pepsi.
"That was a big Pepsi account," Koons said in deposition. "They called me to see if I could work on it."
Well-versed in the nuances of city code, Koons called Bill Fountain, who, as executive director of the West Palm Beach Downtown Development Authority, was representing Spanky's at the time. Koons suggested that Simons refer to the mural as "art," as opposed to advertising, so that it wouldn't be subject to the zoning regulation. Simons did just that, and the mural's design was rubber-stamped by the city's volunteer-run Art in Public Places Committee.
What the committee considers "art" is titled "Spanky's Wall of Fame," which features pastel-colored renderings of many sports heroes, including Dan Marino and Hank Aaron. Dwarfing these figures, however, is a fifteen-foot-tall Pepsi bottle with a label that reads: "Sparkling Pepsi." Should anyone walking down Clematis miss the bottle, a blond, blue-eyed surfer riding a huge wave holds a five-foot can of Pepsi in his outstretched hand.
But Koons, who sits on the boards of the sculpture garden, the Armory Art Center, and the Norton Museum of Art, isn't as eager to settle the debate. When asked whether the mural is or isn't art, he smiles sheepishly, shakes his head, and says: "I would've helped [Spanky's] on a Coke bottle. It didn't really matter."
In deposition, however, Koons indicated that the mural was more than just free advertising for Pepsi. He said that Simons was so pleased with the outcome that, whenever a new restaurant moves into the area, he'll suggest that they too sign a contract with Pepsi.
"There is probably ten new restaurants in downtown West Palm Beach, and the large percentage of them have Pepsi-Cola," Koons said. "And they know that with Pepsi-Cola they were getting a company that was involved in the community, and gave really good service, and could help them with any particular issues that they had."
As bold as he was under oath, Koons won't admit today to helping Pepsi at all. In fact, over the course of three interviews with New Times, he offered at least as many versions of the Spanky's story. As far as Simons is concerned, however, one thing is for sure: "He's a great guy. He was instrumental in helping us get that Pepsi mural."
Koons' other Pepsi deals aren't nearly as easy to spot. For example, when Palm Beach Atlantic College (PBAC) was planning to build a 16,000-square-foot athletic center in 1996, developers suggested using land adjacent to South Dixie Highway. But the Florida Department of Transportation (FDOT) had already earmarked the site for future road expansion, says Michael Allen, PBAC's chief financial officer. Under oath Koons admitted that he used his position as city commissioner to get the FDOT to grant the college special permission to use the land. He also admitted that PBAC is "one of Pepsi's biggest clients."
Today Koons denies that he helped the college because it's a Pepsi customer. Reminded of his testimony, he simply says: "I'm not familiar with my transcript in court, to be honest with you."
What Koons may or may not be familiar with are the city and state laws regarding unethical behavior. Florida law does not address conflict of interest specifically. It states, however, that any city official who votes on a matter that allows him to receive a special benefit to which no one else is privy is committing an illegal act. If a vote isn't required, an action is deemed illegal if it's committed with "corrupt intent," meaning the city official is aware the action is contrary to the public good.
Legally speaking, terms like "special benefit" and "corrupt intent" are wide-open to interpretation.
"[The state law] is a fuzzy line," says Timothy Lenz, an associate professor of political science and public law at Florida Atlantic University. "There has to be a quid pro quo. That means, literally, 'This for that.' You need to show that someone got something very specific in return for doing something else that was very specific."
The line's not as fuzzy on the local level. The Code of the City of West Palm Beach addresses the issue of "conflict of interest" specifically.
"A conflict of interest exists if the officer... has a substantial financial or personal interest in the outcome... of any matter under consideration before him." The law also states that a city commissioner is not allowed to have a financial interest in a business that would "tend to impair his independence of judgment and action in the performance of his official duties." Punishment for breaking the code is dismissal from office.
West Palm Beach city commissioners are leery of commenting on Koons' potential conflicts of interest. Zucaro said that, although it troubled him to hear that Koons had indicated conflicts of interest under oath, he didn't feel that his colleague's actions had crossed any legal line. Commissioner Joel Daves espoused the commission's prevailing philosophy regarding conflict of any nature.
"I think we believe these things are best left to the voting public to decide," he offered. "We have to face the consequences of what we do."
Friends, family and businesspeople far removed from Koons' political dealings are less ambivalent on the subject. One long-time family friend, a businesswoman who asked not to be identified, claimed that, as a city commissioner, Koons indeed puts Pepsi's interests first.
"Jeff's a real sweet guy," she says. "But some of the things he does put a lot of money in his pocket."
All this talk about conflict of interest sent Koons running to West Palm Beach City Attorney Pat Brown, who reviewed the state statute with him. Brown would not speak on record, but Koons assured New Times that, in his case, no conflict of interest exists. He then asked for one more opportunity to talk in person, to explain his actions and go over the state law, which, as he interprets it, allows him to act in the interest of Palm Beach County's entire business community, Pepsi included.
Meeting with New Times once again, he explains that, as a city commissioner, he sits on several countywide government agencies. Many of those agencies have a vested interest in the convention center, which, if it is built, will attract more hotels to West Palm Beach and provide the city with more jobs. If such economic development is helped by his connection to Pepsi, so be it.
Q: So, what you're saying is that all of Palm Beach County's businesses benefit by the fact that Pepsi wanted to pay you $500,000 a year?
A: Yes, to do serious public work. And my personal opinion is that I did a really good job. I think I'm really good at what I do, and society benefited dramatically from it.
Q: And Pepsi?
A: Yeah, Pepsi as a member of society down here directly benefited from what I do. Sure. They would. I mean, I think our quality of life here in Palm Beach County, since I've been working on this for ten years, has dramatically improved. You know, and maybe we sold some extra Pepsi. Our company here in Palm Beach County is the dominant soft drink here. I'd love to believe I've been working here for 25 years and that's one of the reasons it got that way.
Q: Having said all that, don't you think your work as a city commissioner may have helped Pepsi to become the dominant soft drink in the area?
A: Well, I think people, maybe people were proud of what Jeff Koons was doing and maybe they went out and bought an extra case of Pepsi. Or maybe I gave away enough soft drinks that people got hooked on it. But the nexus is tough to meet on the potential conflict of interest on this stuff that I do. That's all I'm saying.
Ironically, a conflict of interest is what landed Koons on the city commission in the first place. In early 1989 Commissioner Nancy Graham (who is now mayor) resigned from the commission because the law firm with which she was an attorney, Moyle and Flanigan, had several clients that did business with the city. When Graham recognized the potential for conflict, she asked the city attorney for an opinion. She was told she'd have to recuse herself from voting every time one of her firm's clients came before the commission.
Koons says he doesn't agree with the opinion and adds: "She shouldn't have asked for it."
As it turns out, another commissioner, Pat Pepper Schwab, moved into a residence in Graham's district just after the resignation. So Schwab was given Graham's seat, which left open a slot in Schwab's old district, number five, where Koons was a resident. Elections were only six months away, so the commission decided to appoint an interim commissioner. Koons, who was president of the South Flagler Neighborhood Association at the time, saw his chance. He added his name to a list of ten other residents vying for the appointment, hoping that his work as a lobbyist for Pepsi in Tallahassee and Washington would count as solid political experience.
Indeed, the commission took note. Before voting on the appointment, Schwab asked Koons if he thought his Pepsi job would be in conflict with a city commissioner position. No, Koons insisted, noting that the city itself had no contract with Pepsi. In September 1989 Koons was appointed to the commission, and six months later he won the election.
The commissioner's job was the perfect position for both Koons and his father. For years Bud Koons had helped his son expand his circle of influence for the benefit of his company, the Cincinnati-based Central Investment Corporation. In 1990 he promoted his son to vice president of field operations, a job with a six-figure salary and enough flexibility to allow Koons to commit himself to public service.
With time on his hands, Koons got involved with numerous government and quasi-government agencies. One such agency, which would serve Pepsi well, was the Metropolitan Planning Organization (MPO), a countywide government body that sets priorities for the funding of state and federal roads.
In 1985, as part of a five-year plan, the board targeted an interchange at Interstate 95 and Gateway Boulevard in Boynton Beach as a priority for state funding. But in November 1989, just after Koons joined the MPO as one of his city's two representatives, the FDOT notified the board that the state would not be able to fund the new exit ramp. Along with more than a dozen other MPO members, Koons vigorously lobbied the FDOT to find funds to pay for the road, according to Randy Whitfield, the MPO's director.
Less than a year later, the FDOT told the MPO that it had reappropriated existing funds to pay for new projects. When Koons moved to have the $21 million interchange included, the board unanimously agreed, and construction on the ramp began.
During his divorce trial, Koons admitted that his job with Pepsi is what motivated him to push the interchange issue so hard. One of the biggest proponents of the exit ramp, he said, was Publix, a then-expanding supermarket chain that wanted to build its first Palm Beach County distribution center in an industrial park about a mile from the proposed interchange. Publix, Koons noted, was one of Pepsi's biggest clients.
"It saved Publix millions of dollars," Koons said in deposition. "They very much appreciated it, too."
Even if his colleagues, business associates, and friends are aware of Koons' somewhat shady dealings, no one really seems to mind. The fact is nearly everyone, supporters and detractors included, likes Jeff Koons.
"Even when he doesn't agree with you, he has the ability to be quite charming and quite politic," offers Dorothy Gulden, a West Palm Beach activist and real estate broker, who testified to the value of the Koons family home at the divorce trial.
Koons fancies himself a man of the people, of the rags-to-riches variety. When he describes his rise from Pepsi truck driver to vice president, he admits, only as an afterthought, that he rose relatively quickly in a family business.
That business was started in the '30s when Koons' paternal grandfather, John, started a walk-up hamburger restaurant in Cincinnati called the Burger Brewing Company. The financially successful company was later bought out by Pepsi-Cola. After John Koons died, his son, Bud, used the family's cash and stock to start the Central Investment Corporation. In 1996 that company earned roughly $165 million.
Jeff Koons is the oldest of four children, and he began working in the family business in 1970, almost immediately after he graduated from Miami University in Oxford, Ohio, with a bachelor's degree in business. Although Bud Koons didn't purchase the Riviera Beach plant until 1973, he owned another plant in Fort Lauderdale at the time. He gave Jeff a job as a truck driver.
After about a year, Koons took off with a college friend for a year-long vacation in Mexico. He returned to his truck-driving job in Fort Lauderdale in 1973 and soon met Mary Louise Moore, a sculptor and painter from New Jersey. They met at her sister's wedding (the groom also worked for Pepsi) and got married in 1974. Within a year Koons was applying to graduate schools for business. But during a visit to Cincinnati, the couple was called into Bud Koons' office.
"He takes us in," Mary Louise Koons recalls, "and he says, 'You don't need a master's degree. This is going to be where you'll work. But first you need to do field work.'"
Still based in Florida, Jeff Koons was put in charge of some of Pepsi's biggest accounts in the supermarket industry. By the early '80s, the Koons family included three daughters -- Caroline, Kathleen, and Maura -- and Koons was lobbying top government officials for changes in state and federal recycling and bottling laws. Koons was almost always on the road, lobbying in Tallahassee and Washington and spending vacations in places like Aspen, where he hobnobbed with business and political bigwigs.
His ex-wife claims that family life was an unending series of charity balls and political fundraisers. For four summers in the early '80s, the Koonses vacationed in Cape Cod, Massachusetts, where they stayed in the company-owned condominium. Every morning Koons played golf with people like U.S. Rep. Dan Rostenkowski and U.S. Speaker of the House Tip O'Neill.
But Koons was also having problems with alcohol and debt, according to court documents. Koons says that in 1987 he spent a year in group therapy to solve his alcohol problem, which is now under control. But throughout the '80s, the Koonses spent well beyond their means, despite an average income of close to $500,000 a year.
To help out his son, Bud Koons gave the family gifts of company stock, loans, and checks for thousands of dollars. In 1992, according to court records, he forced his then-45-year-old son to seek therapy. "They owed everybody in town," his father said in deposition. "They owed every bill in town."
Mary Louise Koons says that the entire family was in therapy at that point, which made it difficult to live up to the kind of family image Bud Koons demanded. While she and her daughters agreed to discuss the family's problems honestly, she claims that Bud and Jeff Koons never did face up to what was going on. So in October 1996, tired of the lifestyle and the lying, she filed for divorce.
Koons himself will only admit to "irreconcilable differences."
But Mary Louise says, "The bottom line, I suppose, is that we all know that we were a family in need of therapy, to which the girls and I were straightforward about for many years."
A few days after she filed for divorce, Pepsi-Cola told Koons that his salary would be cut in half. Eight months later, on June 2, 1997 -- Koons' 49th birthday -- he was told that his father had eliminated his job at Pepsi. Koons was just nine days away from sitting down for a deposition interview for his divorce trial.
"He will not be back," Bud Koons said during the trial. He then turned to the court reporter and added: "Put that in capital letters."
He also testified that he was tired of supporting his son, who was utterly incompetent and not worth the high salary he earned as a Pepsi executive.
Mary Louise Koons believes that the father-son split is a sham, a way to hide Jeff Koons' assets. She's appealing the divorce settlement -- which supplies her with $60,000 a year, plus child support -- saying it isn't enough to cover the medical bills she has to pay as a result of suffering from lupus, a disease that weakens the immune system, causing rashes, fatigue, and pain in the joints.
"Suddenly, in my divorce, Jeff Koons no longer has a job with Pepsi-Cola," Mary Louise Koons, age 47, says. "I find that hard to believe, because all the concessions in West Palm Beach these days are nothing but Pepsi-Cola."
The city commissioner claims that nobody's faking anything and that he still pays his ex-wife's health-care bills, including one for $500 two weeks ago. But although Koons and his father claim they haven't spoken to each other since December 1996, Koons' father chipped in $500 to his son's reelection campaign this past March. Arvidson, the Pepsi bottler's president, donated another $100.
Throughout the campaign Koons also told reporters that he was still a Pepsi executive. His opponent in the close race was Vivian Brooks, age 40, who ran on a pro-neighborhood platform and claimed that Koons spreads himself too thin, creating conflicts of interest as a result.
Koons told New Times that he works for Pepsi "5 percent of the time" and the city "95 percent." When pressed on the issue of whether or not he's still employed by Pepsi, he said he was on an "extended leave of absence."
"Well," he says, "I'm available if they need me for something."
Whether or not Koons is on Pepsi's payroll, he still makes money off the company. Koons said in testimony that he and his three siblings will eventually inherit almost every share of the multimillion-dollar CIC. And until then court documents show that Koons receives a check for roughly $24,000 each quarter, from dividends paid through more than 5000 shares of stock held in a trust fund.
Depending on which attorney you ask, the trust fund is valued at either $2.5 million or $11.2 million. Koons' attorney claims the trust is simply part of his estate, meaning that it cannot be touched by Jeff Koons' heirs until he dies. But Mary Louise Koons' attorney claims that Jeff Koons has already tapped into the trust to pay off his debts.
Koons says that isn't the case. In fact, he claims that, because he can't break into the trust, he's pretty much broke. "He doesn't have a quarter to buy a pop at the company," he father said in deposition.
The Koons' $850,000 home on the Intracoastal is in foreclosure, and Mary Louise Koons is living in a friend's house in southern West Palm Beach. Koons rents a house in his district. He has also looked for other jobs where he might be able to use his lobbying and public-policy skills. He interviewed with Daryl Glenney, the public relations expert who managed Nancy Graham's mayoral campaigns, and with his friend Don Mathis, whom he knows from the Economic Council of Palm Beach County, an exclusive private organization of some of the wealthiest businesspeople in Palm Beach and Broward counties. Mathis, a partner in the influential West Palm Beach public relations firm Sartory, Mathis and Beedle, said he has a standing offer for Koons to work with him on projects. Koons says he has not yet worked with either firm because "the right opportunity hasn't presented itself."
Koons compares the work he may do for those firms with what he's done for Pepsi. All three jobs consist mainly of "getting things under control, knowing what the outcomes are going to be, and then, you know, moving public policy to affect the right decisions for the client," he says.
Affecting public policy is something Koons may be doing for quite a while. Ever since the days of playing golf with Tip O'Neill, he's been intimately involved with the political process on the highest levels.
Koons claims that he has no interest in being the mayor of West Palm Beach, but his name inevitably comes up as a contender for 1999. Many feel that he'll inevitably shoot for a state-level office, perhaps the one that will be vacated by State Rep. Ed Healey (D-Palm Springs) when his term limit runs out in the year 2000.
"He's a serious candidate," says Greg Nicosia, the Palm Beach County Democratic Party chairman. "He has many business contacts and good name-recognition. He's a hard campaigner, and I'm sure he has a good record to stand on."
Without ruling out the possibility, Koons wouldn't comment on plans to run for a state office. Besides, he says, he still has big plans for West Palm Beach. "Right now," he asserted one afternoon, "I want to make West Palm Beach the best place in America for kids to grow up."
The plan will more than likely include Pepsi. During one of his interviews with New Times, Koons makes yet another sketch. He scribbles a rectangle on the page, saying that it represents the Pepsi bottling plant in Riviera Beach. Above it he draws a single line, which represents a proposed road called the Northlake Reliever, a short stretch of east-west thoroughfare that, if built, will connect Military Trail with Congress Avenue in Riviera Beach. The road, Koons explains, will make it easier for Pepsi trucks to move between the plant and I-95.
"The project had been stalled for years," he says. "I thought I would go to people and say, 'Look, this has to be done.'"
Some city officials in Riviera Beach, Lake Park, and Palm Beach Gardens worry that the road might increase traffic, rather than alleviate it, according to Palm Beach County Engineer George Webb. But Koons says that, as MPO chairperson, he's already done a lot of behind-the-scenes lobbying. He's met with city commissioners from Riviera Beach and Palm Beach Gardens and with William Wagner, the mayor of Lake Park. He's told them all the same thing: The road is in your best interest.
"You have to kind of push stuff," Koons explains.
What's ironic is that the MPO isn't even officially involved with the planned construction of the county-funded road. It only concerns itself with state and federally funded roads. Why, then, is a city commissioner in West Palm Beach so concerned about a tiny stretch of asphalt located several miles north of the city limits?
Koons explained in his deposition: "That road has been in limbo a little bit, so we were trying to facilitate that. And Pepsi is one of the prime beneficiaries, because all the vehicles won't get caught in traffic. It will save them ten, $15,000 a year. At least.