By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
By Deirdra Funcheon
By Kyle Swenson
Dorsey Miller, one of the most powerful black Republicans in Florida, often plays the role of civil rights champion. And, as the former diversity czar for Broward County schools and current commissioner for the North Broward Hospital District (NBHD), the nation's sixth-largest public health entity, he's usually in a position to be heard. Only sometimes it's a little surprising what he says.
Miller, a rather intense, balding, and bespectacled man who looks much younger than his 61 years, last month urged hospital district leaders to hire more minority companies to share in the public health system's $800 million-plus budget. "America for me is still not the America I dream of..." he declared at the dais in Broward General Medical Center's auditorium on May 25. "We still have a problem with Asian and black vendors getting their fair share of the business."
He uttered the word so fast and in the midst of such a rambling speech that it was easy to miss. Asian. Why would he single out Asians, who comprise only 2 percent of the Broward County population, own few local companies, and already do more than their fair share of business at the district?
One likely answer comes in the form of hard cash, according to interviews and records obtained by New Times. Miller receives a monthly stipend and occasional five-figure bonus checks from Miami-based American Medical Depot (AMD), which distributes supplies to the hospital district he governs. AMD, an Asian company, has paid a consulting firm owned by Miller at least $100,000 during the past few years and is contracted to send the commissioner monthly $3,500 checks until the end of 2007. All told, Miller expects to make at least a quarter million dollars from the deal.
In return, the commissioner plays rainmaker for AMD, drumming up new government contracts. And the firm's hospital district business has grown at an astounding rate since Miller was hired in October 2001. Before that time, AMD had done only nominal work for the district, less than $2,000 per year in gross receipts. In 2002, Miller, while serving as chairman of the district's Minority Business Enterprise (MBE) committee, helped shift millions to AMD. The payoff was immediate: The company snagged a contract worth $3.25 million in district business last year and is projected to bring in $5 million in 2004, making it one of NBHD's most active minority companies.
And what about those black-owned firms? Well, they haven't fared as well. In fact, all African-American companies combined now make less at the district than AMD. Asian firms do twice the district business of black companies. This is despite the fact that 20 percent of the Broward population is black -- almost ten times the Asian population.
When asked about AMD, Miller wouldn't discuss the issue at length but denied that the company paid him for helping it secure district contracts. Rather, he received the cash for helping AMD make connections with other county and state governments. "The money they paid me was for other things," Miller said.
If Miller did accept money to help a private firm win contracts at the district, he'd be in violation of Florida's unlawful-compensation law, a second-degree felony that forbids public officials from profiting from their governmental duties. The Broward State Attorney's Office, in fact, is currently conducting a criminal inquiry into Miller's relationship with AMD, New Timeshas learned. It's a spinoff of the much-publicized investigation involving former Supervisor of Elections Miriam Oliphant and Broward's controversial purchase of electronic voting machines, which also involved dubious deals between Miller and AMD.
Three highly placed district sources, who have intimate knowledge of NBHD business, allege that Miller engineered American Medical Depot's windfall. "Dorsey Miller backed American Medical Depot all along," says one district employee, who demanded anonymity for fear of losing his or her job.
But Miller's story is more than a case of a wrong-doing public official -- it's a portal into the greedy underside of the well-intentioned policy to increase minority participation in government business. And Miller could never have done it without his friend Gov. Jeb Bush, who appointed him to the board.
The connection between Miller and AMD provides yet more evidence that the district health empire, which is subsidized with $174 million in local property taxes, is critically mismanaged and routinely operates outside the bounds of ethics and the law. A top district official was convicted of embezzlement last year; a federal grand jury is investigating a building project sullied by grossly inflated pay and insider dealing; and during the past six months, New Timeshas exposed several sweetheart contracts, millions in waste, and serious conflicts of interest.
While blame for this pattern of abuse can be spread on district commissioners and staff, it is Jeb Bush, who appointed the board and has strong ties to district officials, who is ultimately accountable. Yet the governor has been publicly silent on the problems. In fact, his office recently praised the district as a model "responsible corporate citizen." To understand why the governor may want to avoid the growing scandal, consider that NBHD serves as his chief base of power in Broward County and that its ranks are packed with GOP fundraisers and lobbyists. Board members and some district officials have raised hundreds of thousands for the governor and his brother President Bush.
The fact that George W. Bush is running for reelection this year and that Florida is expected to again be heavily contested only complicates the governor's predicament. He needs the district juggernaut to come through for the president, even if it is riddled with opportunists who have violated the public trust while capitalizing on the Bushes' pro-business, antiregulatory approach to government.
Miller, who has generally steered clear of scandal in the past, is the newest embarrassment for the governor and, to a lesser extent, the president. The White House recently tapped Miller to help bring black votes to the president this November. And the commissioner did the same job for Jeb Bush back in 2002, serving as the African-American outreach coordinator for the governor's reelection campaign. At that time, Jeb Bush, who didn't return calls seeking comment for this article, termed Miller a "good friend" and "stalwart supporter."
Miller's associates at American Medical Depot are also in the Bush family's good graces. In 2002, the governor named AMD, which does millions in business for state prisons and hospitals, the "Minority Vendor of the Year" for Florida and praised the company as a shining example of the success of his controversial One Florida plan, which has effectively ended affirmative action in the state. "These are businesses that win because of price and quality," Bush declared. "They're not winning because we've created set-asides and quotas and preferential pricing, which are flawed approaches to embrace diversity."
The $20 million-a-year firm has been owned since 1993 by two brothers, Akhil and Sukrit Agrawal, who were born in New Delhi and moved to South Florida as adolescents. Their father, Piyush, is a former Miami-Dade County math supervisor and New Jersey schools superintendent, and has also played a strong role in developing the company. Piyush Agrawal is a board member and past-president of the Association of Indians in America (AIA), making him a powerful national representative of the Indian community.
In March 2001, Piyush was one of just a select few Indian representatives whom President Bush invited to the White House to discuss his tax cut plan. Later that year, the president appointed one of Piyush's close associates at AIA, Gopal Khanna, to a high post in the Peace Corps.
Later that year, the Agrawal family contributed $2,000 to Jeb Bush. Before that, family members had given exclusively to Democrats in statewide races. And today, the Agrawals are prized supporters of both the governor and the president.
To understand their influence, one need only revisit a September 9, 2003, presidential fundraiser at Hyatt Pier 66 in Fort Lauderdale. Piyush and Akhil attended a private VIP reception before the affair, where the AMD patriarch personally urged the president to celebrate Diwali, a Hindu festival. Six weeks later, on October 23, the White House celebrated Diwali for the first time, with the Agrawals in attendance and Bush senior adviser Karl Rove lighting a ceremonial lamp to kick off the event.
Miller and the Agrawals have friends in very high places, but their most valuable Republican ally right now might be the man who organized the Pier 66 fundraiser, William Scherer, the district's general counsel and one of the Bush brothers' top operatives in South Florida. Scherer has represented Miller in the AMD investigation, meeting with prosecutor John Hanlon, who is handling the case, and sending at least one letter -- which blatantly misstates the facts in favor of Miller -- in an attempt to exonerate the commissioner [see "A Misleading Missive," at end].
Scherer also happens to be a top political contributor to Broward State Attorney Michael Satz. In fact, he and his business partners have contributed about $15,000, amounting to nearly 5 percent of all contributions Satz has received since 1995. That relationship may bode well for Miller. The state attorney's record too should give the commissioner some solace -- Satz has successfully prosecuted only a handful of Broward government officials during 27 years in office.
The evidence that New Timeshas gathered from district sources, county records, interviews, and the state attorney's own investigation, however, may be too much for Satz to ignore. And it all begins with the delivery of toilet paper to Broward County hospitals about a decade ago.
Cracking the District
After 13 years working as an administrator for Broward schools, Dorsey Miller hit a crisis in 1993. School Board members roundly criticized a program he ran that was designed to improve test scores for disadvantaged students. With $35 million spent on the program, the board termed it a failure and cut funding.
But Miller, who kept his $96,000-a-year School Board job, had other professional interests. At that time, he was starting his own company, D.C. Miller & Associates. With just a 1988 van and his political connections, he planned to become a distributor of custodial products to local governments. Miller set out to win minority certification for his firm so he could snare public contracts allotted to those companies.
The first entity to certify D.C. Miller & Associates was his employer, the School Board. And, according to Miller's application to the district, the only government job his company held in 1993 was a $3,500 supply contract with Broward schools. This apparent conflict of interest wasn't publicized at the time, but it serves as an early sign that Miller knew well how to mix his public position with his private business.
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.
Just two months after joining the district board, Miller made his mission clear: to increase NBHD business with minority firms. During a monthly board meeting on February 28, 2001, he announced that a decline in such contracts at the district was a "disturbing trend."
"There are 1,525 minority businesses [certified with the district], and I'd like to know how many of those are actually doing business," he told Gainey.
A month later, on March 27, 2001, Akhil Agrawal and his father, Piyush, met with district officials in hopes of winning some business for AMD, including the trash can liner work that Miller had abandoned. But the Agrawals were again met with a stone wall.
AMD turned to Miller to help the firm win business. In his deposition, Akhil Agrawal described the negotiations: "[Miller] said, 'Look, I don't want to do anything that would ever appear as being improper in any way. I can't represent you in North Broward. I'm going to make sure that the administration knows and it's on the record that you're a client of mine... I don't want to talk to you about the North Broward stuff. We can't discuss it."
On October 1, 2001, the deal was struck: AMD agreed to pay D.C. Miller & Associates $1,000 a month, plus bonuses for any contracts the commissioner helped the company win. In a recent telephone interview, Akhil Agrawal told New Timesthat the contract "specifically" forbids Miller from assisting the company in its district business. However, the agreement, which was obtained from the State Attorney's Office, doesn't include such a stipulation.
Agrawal's brother, Sukrit, indicated in a 2003 deposition that he hoped Miller would indeed use his influence at the district to help AMD get through the door:
Hanlon: Was part and parcel of your thinking that having [Miller] on retainer... would of course increase your chances of getting business from the hospital district?
Agrawal: I think the hospital district... we had been working on them for several years. As far as, you know, Miller's influence in that, at the time we engaged him, we did not expect him to become chairman or have a whole level of any influence really of any significance, you know.
Hanlon:Was it your hope that he would have some impact on their decision-making?
Agrawal: ... you always hope for something.
Those hopes soon turned into gold for AMD.
The first chunk of business Miller brought to AMD came not from the district but from the Broward County Commission contract for electronic voting machines. A Nebraska-based company, Election Systems & Software (ES&S), won the $17.2 million job in November 2001 and, under county mandate, had to award at least 10 percent of the contract to minority companies. ES&S hired the well-connected Miller to coordinate that part of the job.
Miller first gave himself the lion's share of the ES&S business. On December 3, 2001, he filed papers with the county indicating that his firm would receive $900,000 from ES&S to provide voting booths and do voter outreach. But when county staffers looked into Miller's company, they discovered he didn't have any warehouse space or means to transport the booths. So they forbade Miller from doing the work because it appeared that it would be a pass-through, which isn't allowed under county ordinances. Miller then simply enlisted his associates at AMD.
Hanlon's investigation determined that the voting booth work was unnecessary and was included in the deal only to artificially fulfill the minority requirement. But since the ordinance had no teeth, no one was ever punished. Instead, Miller and AMD were handsomely rewarded.
ES&S ultimately paid D.C. Miller about $225,000 for "voter outreach," according to county records, while AMD pulled in nearly $1 million. In July 2002, AMD sent Miller his first bonus check, for $27,535. In his deposition, Sukrit Agrawal claimed that check was for Miller's help in winning the voting booth contract. The firm also gave Miller another $10,000 that spring, which Agrawal said was for helping AMD win a $1.8 million-per-year job with the Florida Department of Corrections. But even Agrawal seemed skeptical of the role Miller actually played in the state contract. "It was an open bid... and we just happened to win," he told Hanlon. "We were lower by almost 40 percent than anybody. So would we have gotten it without [Miller]? Probably."
Akhil Agrawal and Miller deny that the commissioner used his influence on AMD's behalf at the hospital district. But Agrawal admitted to Hanlon that, after one board meeting, Miller introduced him to district CEO Wil Trower. "I guess it was at the end of the meeting when they were doing the finger food," Agrawal recalled. "[Miller] did come up [to Trower], and he said, 'I want you meet Akhil. They are American Medical Depot. They're a client of mine, but obviously not for the North Broward Hospital District.' So I know that Wil Trower knew the relationship from that."
Such connections are the lifeblood of businesses like AMD. When Hanlon asked Sukrit Agrawal what Miller had done for the company to earn his salary, the director of operations said, "Well, introductions to people is really the biggest issue."
Perhaps Miller introduced Agrawal to Gov. Bush as well. In August 2002, when the governor awarded AMD with the "Minority Vendor of the Year" honors in Tampa, his office issued a press release in which Bush and Akhil Agrawal expressed their admiration for each other. "[AMD's] commitment to customers and their industry partners to provide quality service is commendable," the governor declared. Agrawal, for his part, praised the One Florida plan and Bush for putting the "spotlight" on minority businesses.
American Medical Depot's first significant NBHD job came in March of that year, when the MBE committee voted to award AMD a $60,000 job to distribute catheters and other products. Miller recused himself from the vote "for personal reasons," according to meeting minutes, which don't indicate that he revealed his business relationship with AMD. At the time, the commissioner also didn't file a conflict-of-interest form, which is required by state law.
Whether Miller was involved in steering that award to AMD is unclear, but it's quite evident that he played a major role in what became known among district administrators as the "$6 million conversion." The idea, which sources say originated with Miller, was to transfer $6 million worth of supply business to minority companies, with the lion's share slated to go to none other than American Medical Depot.
During the June MBE meeting, Miller discussed the conversion plan. An excerpt from the meeting minutes: "Commissioner Miller asked... if it was realistic to have the $6 million converted to minority vendors within one month... Miller asked for clarification of the $6 million list... Miller would like the conversion of the $6 million dollars to minority vendors expedited to the soonest possible completion date."
On September 19, 2002, the MBE committee -- composed of Miller, Trower, Gainey, and two other district officials -- approved the $6 million conversion. Miller recused himself, but again, there is no indication he disclosed his relationship with AMD. The recusal paved the way for Trower to conduct the vote. "Dorsey pretty much ramrodded that $6 million through, and no one was going to stand up to him, least of all Wil Trower, who exists to please the commissioners," one of the three district sources says.
Again, Miller didn't file the required conflict-of-interest form after the meeting. But the deal wasn't sealed -- the board of commissioners still had to approve the committee's actions. That came at a November 26 meeting -- and Miller voted to approve the MBE committee report and minutes, which obviously constitutes a vote for the shift in business that went to AMD.
Five days after Miller voted to close the deal, the company raised his monthly pay from $1,000 to $3,500 a month. Akhil Agrawal contends that the commissioner helped American Medical Depot land business outside the district but refused to give an example. "He has brought significant other contracts to AMD, but I don't want to get into that, because it's a business relationship," he told New Times.
That new contract was signed just as the Agrawal family began reaping huge rewards from NBHD. While the firm had done no business with the district in the first eight months of 2002, it garnered more than $300,000 in the last four months of that year. The following year, the company conducted $3.25 million in business, and this year, it has consistently been doing a healthy $350,000 to $400,000 a month.
While AMD has arrived at the district, black-owned companies are still waiting. According to NBHD records, African-American firms are earning just 1.37 percent of district business while Asians are now pulling in 2.88 percent of the hospital system's pie.
A Responsible Corporate Citizen?
It's so bad that the district procurement staff solicited bids on about $22 million worth of supply business that included all of AMD's $4 million-plus of current work. AMD bid for the project, but staff chose Cardinal Health, which beat the Agrawal family's offer by nearly $300,000 per year. That decision means AMD could lose almost all the business that Miller helped it get.
But the new contract is in limbo, district sources say, because Miller and other district officials -- including Trower and general counsel Scherer -- are protecting AMD. To be sure, Scherer's office has been involved in the delay: Earl Hall, a lawyer in Scherer's firm assigned to the MBE committee, met with district staffers and warned them that the contract, as it stood, would never be approved by the commission, sources said.
Hall acknowledges that he met with district staffers regarding AMD but denies he ever said such a thing. He insists he was there only to follow up on a complaint that Akhil Agrawal had made in a letter to Gainey about the bid process. "I investigated a complaint; I wasn't there to push for American Medical Depot," says Hall, adding that he determined that Agrawal's allegations were unfounded.
As the delay continues, AMD keeps raking in business at taxpayers' expense. And even as the purchasing department fell into conflict over the Miller/AMD connection and black businesses floundered, the district was given a diversity award during the last monthly board meeting. Premier Inc., a huge medical supply buying group that the district patronizes, presented the award in honor of the district's work in hiring minority companies.
The value of the prize is dubious; Premier has had its share of ignominy. In 2002, members of the Senate Judiciary Committee harshly criticized it for conflicts of interest and insider deals that had been exposed in a series of New York Timesarticles. And because NBHD almost exclusively uses supply firms that are aligned with Premier, the corporation surely had a financial motive to throw the district a prize.
But the governor's office seemed blissfully unaware of the nature of the award -- and couldn't have issued more effusive praise to the district for it. At the meeting, Gainey proudly read a letter from Windell Paige, a Bush appointee who runs the state's Office of Supplier Diversity and, according to the state website, "directs the 'Equity in Contracting' side of the Florida One Initiative." In the letter, written on behalf of the governor and read by Gainey at the board meeting, Paige issued a "hearty congratulations" to NBHD for its "special recognition" and deemed the district "one of Florida's most enlightened and responsible corporate citizens." Asserting that "success begins at the top," Paige wrote that Trower and all the board members deserve special thanks for their work, which "needs to be duplicated throughout the State of Florida."
Putting aside the grand jury investigation and other dire problems, it's possible Bush didn't know about Miller's ties to AMD, since they haven't been made public until now. But the letter indicates just how determined the governor is to gloss over any violations of public trust that occur in his fiefdom.
And the recitation of the letter was certainly a high point for Miller, who stood up and posed for pictures with the award and later spoke about creating a "level playing field" before urging the district to give more business to Asian companies.
A Misleading Missive
A state investigation of Dorsey Miller's financial connection to American Medical Depot has plodded on for months, but the North Broward Hospital District commissioner has yet to speak with prosecutors. Instead, William Scherer, the district's attorney, has run interference for his Republican ally. And the lawyer's efforts might deserve a separate scrutiny from investigators.
A letter Scherer wrote to lead investigator John Hanlon is riddled with falsehoods that appear to be designed to exonerate the commissioner, who has received more than $100,000 in payment from AMD while helping it win business with the district.
Scherer -- who is widely considered to be the most powerful official at the district -- met with Hanlon last summer and, on August 21, 2003, wrote the assistant state attorney a letter claiming that he had examined all "available records" regarding Miller and AMD and found that the commissioner was in "substantial compliance with the applicable Florida ethical laws.
"Dr. Miller abstained from participation and voting when required... [and] executed appropriate conflict forms pursuant to a request by this firm," Scherer wrote.
Apparently, Scherer, who refused to comment for this article, failed to notice that Miller voted in November 2002 to approve a shift of millions in district business to AMD. Considering the general counsel's vast knowledge of district business, it's unlikely he would make such a mistake, which conveniently benefits Miller's defense. And that means Scherer may have a problem. It's a second-degree misdemeanor in Florida to "knowingly make a false statement in writing with the intent to mislead a public servant."
The general counsel was correct, however, in stating that Miller filed a form acknowledging a conflict of interest. But Scherer should have known it was far from "appropriate," as he stated in his letter. Miller didn't file the form at the time of the March 2002 meeting. Instead, he filled it out more than a year later, on June 26, 2003, after both he and Scherer learned of the criminal investigation.
This ploy is made more curious by the fact that Florida ethics laws require such forms to be filed within 15 days of the recusal. Furthermore, those conflict forms are relevant only to the state Code of Ethics, which has nothing to do with the criminal corruption laws that Hanlon is supposed to enforce.
The Scherer letter continues: "American Medical Depot maintained a long-standing business relationship with the North Broward Hospital District. The business relationship between the [district] and American Medical Depot was established before Mr. Miller was appointed to the [board]."
This statement too is blatantly false and misleading. Before Miller's appointment, AMD had no contract with the district and wasn't a prime vendor. Instead, it occasionally provided emergency backup supplies to the district that amounted to less than $2,000 a year. After AMD hired Miller, the relationship changed drastically. In late November, AMD signed a contract with NBHD worth millions of dollars and is now one of its most active minority businesses.
-- Bob Norman