By Michael E. Miller
By Allie Conti
By Keegan Hamilton and Francisco Alvarado
By Jake Rossen
By Allie Conti
By Kyle Swenson
By Chris Joseph
By Michael E. Miller
In 1994, Miller tried to do business with North Broward Hospital District, a heavily political place where numerous minority entrepreneurs have complained it's nearly impossible to win contracts. Several businessmen say that if L.D. Gainey, the long-time director of NBHD's Office of Supplier Diversity, isn't on your side, you're frozen out. "Gainey is one of those gatekeepers, and when I tried to get in to see him, I never could," recalls Frank Maden, an African-American who owns a Fort Lauderdale computer firm. "We finally did sit down, but nothing came of it, nothing at all. We'd do breakfasts, lunches, and dinners, and I'd fill out paperwork after paperwork, but nothing would happen. For years, nothing happened. It was more like a dog-and-pony show."
Chris Hood, a black businessman in Fort Lauderdale who has long feuded with Miller, puts it more bluntly: "If you're not in Gainey's corner, he'll make sure you don't get business. You have to be on his team. He misuses that power he's got."
Gainey, who has been the diversity czar at the district for more than a decade, denies that he plays favorites. "I support all minority companies," he says. "That's my job."
In Miller's case, Gainey certainly was supportive. The two men were long-time friends and fellow Morehouse College fraternity brothers who for decades have been distinguished as leaders of the black community in South Florida. Miller quickly snared a sizable share of the custodial supply business at the district.
But his work for NBHD -- which was in the half-million-dollar range or more annually -- was fraught with problems. In fact, Miller wasn't a distributor at all: He had no fleet of trucks and only a 1,500-square-foot "warehouse" in Lauderhill that he used primarily as an office. Miller served, essentially, as a broker who collected a fee for coordinating deliveries between the district and bona fide distributors. In the industry, the practice is called "drop-shipping," and for obvious reasons, it is considered wasteful and inefficient. Worse, it subverted the minority contracting process, since a nonminority firm actually did the work. In government parlance, such fronts are known as "pass-throughs."
"The district would basically fax him an order, and he would fax it to a legitimate distributor and mark it up for a fee," one top district source says. "He was getting quick pay, and sometimes he wouldn't pay the vendor who was shipping. It was a total storefront pass-through, and that was fairly common knowledge."
In 1996, allegations surfaced that Miller's business was a sham, according to NBHD records, but he survived an internal investigation. On February 5, 1998, Miller wrote an angry letter to a district official defending the practice of drop-shipping. "Recently, attempts have been made to discontinue our services to the district and, again, I find my reputation and integrity under attack," he wrote, adding, "I am perplexed that [NBHD], which has declared its commitment to enhancing minority businesses, would attempt to destroy a minority company that has served it well!"
The performance problems, however, persisted. D.C. Miller's file in the district's Office of Supplier Diversity is rife with documentation of late deliveries and short orders of products, including trash can liners. District procurement manager Mickey Victores complained to Gainey about the problem in a February 1999 memo: "I appreciate the sensitivity of the issue, but you must be aware of the problems we are having getting can liners from D.C. Miller. The shortage has created the need for us to procure liners from an alternative vendor and has compromised the organization's confidence."
In June 1999, the district took out new bids on the distribution of trash can liners. Both D.C. Miller and American Medical Depot competed for the contract. Though AMD had the lower price, the contract stayed with the politically connected Miller, who by that time had a friend in the governor's office: Jeb Bush.
Losing a contract with the low bid apparently made a strong impression on AMD's Akhil Agrawal. In a June 2003 deposition with prosecutor Hanlon, Agrawal said his company had tried for five years to win hospital district business with little to no success. "One of the companies that was doing a fair amount of business... was D.C. Miller and Associates," he continued. "And so I had first heard his name there. And I wanted to meet him, because he was more successful than I was at making progress there."
Agrawal made it clear in the deposition that his relationship with Miller was all about influence at the district: "I look for people that are able to get us to the table to have a conversation, to make the presentation with a little bit of credibility but don't have necessarily the backroom to deliver on their own."
In June 2000, Miller and Agrawal started a company called Integrity Supply. But in December of that year, Gov. Bush appointed Miller to the board, forcing him to relinquish his district business. Integrity Supply was dissolved, but it was a wonderful tradeoff for Miller. He went from a controversial and poorly performing contractor to holding sway over the entire hospital system.