Broward Shell Game
For almost a year, the Broward State Attorney's Office investigated Broward County Supervisor of Elections Miriam Oliphant for violating the statutes that govern her office. Late last month, investigators concluded that there had been misconduct: not by Oliphant but by the Broward County Commission. Oliphant may have been guilty of being a lousy administrator, investigators said, but the commission blatantly disregarded a county ordinance designed to break the lock on public contracts by white contractors.
In administering a county deal to purchase and install touch-screen voting machines from Nebraska-based Election Systems & Software (ES&S) in the fall of 2001, county officials used a kind of sophisticated shell game to give the appearance of minority participation in the lucrative $17.2 million contract, according to state documents obtained by New Times. The commission funneled $750,000 to a "minority subcontractor," an Asian-owned medical supply company. The medical supply firm was to manufacture voting booths for the county but simply passed money along to a nonminority firm that did the actual work.
So is the Broward County Attorney's Office looking into the violation? "I've not been directed to do anything like that," says Edward Dion, the county attorney. In fact, he said, he hasn't even read the state attorney's report.
"I think the whole incident should become a model for revamping the entire minority contracting process," contends Christopher Hood, a black businessman in Plantation who has hounded the commission for years to get serious about the program. "What happened here should be the example to pick apart the current procedures and processes to see that this never happens again. I think the commission should take this on as a priority."
Indeed, Ben Graber, the commissioner who two years ago made a stink about "brokering" -- the practice of simply funneling contracts through minority companies in return for a small cut of the money, which is specifically forbidden by a county affirmative-action ordinance -- has finally gotten the commission to schedule a review of the system in December. "Basically," Graber says, "we violated our own rules."
The tale begins with the confluence of two events: the 2000 election and a stinging critique of good-ol'-boy contracting.
Minority business owners like Hood have long goaded Broward officials to increase the percentage of minority-owned companies receiving county contracts. A study in the early 1990s found a strikingly low percentage of contracts going to minority companies. Despite an ordinance passed in 1993 by the County Commission that mandated goals for minority contracts, an inordinate share was still going to companies owned by white males, according to a 2001 study that looked at contracts awarded from 1990 to 1999. The study found, for example, that African-Americans made up almost 10 percent of architects and engineers qualified to handle county contracts, but they received only 1 percent of county dollars for those services. The rate was worse for Hispanics.
"The commissioners basically look the other way," Hood asserts.
With this backdrop, the commission began grappling with the aftermath of the contested presidential election of 2000. The Florida Legislature in early 2001 prohibited further use of the punch-card ballot machines, which had produced the infamous "dimpled" and "pregnant" chads. The Broward commission quickly began soliciting companies interested in replacing the county's obsolete punch-card machines. The county's Division of Equal Employment and Small Business Opportunity (EESBO) unit advised that the project's goal for participation by "small disadvantaged business enterprises" (SDBE), which are in essence minority-owned firms, was 10 percent.
In August, the commission selected ES&S, which would supply about 5,000 machines for $17.2 million. ES&S agreed to satisfy the 10 percent requirement through $1.7 million in subcontracts with four minority-owned companies. One of those companies, D.C. Miller and Associates, was slated to receive $908,000 for voting booths, voter outreach, and media coverage.
But county officials smelled something fishy. The company is owned by Dorsey Miller, who at the time was also the diversity chief at the Broward school district and a board member on the North Broward Hospital District. Miller's company clearly did not qualify for that cash. Robin Upshaw, who was on staff in the EESBO office, later told investigators that D.C. Miller "didn't cut the mustard" for the voting machine contract because the firm was not in the manufacturing business, nor did it have warehouse space.
The $750,000 slated for voting booths was withdrawn from D.C. Miller because "it seemed like it was going to be a pass through," Upshaw said in a deposition.
Upshaw discussed the matter with Oliphant and then informed Pete Corwin, assistant county administrator, that ES&S should handle the manufacturing of voting booths directly. Minority contracting would be best-suited for outreach and education, Oliphant and Upshaw agreed.
At that point, though, with the voting booth out of Miller's grasp, he helped connect ES&S with American Medical Depot (AMD) in Hialeah, a firm owned by two Asian brothers, Sukrit and Akhil Agrawal. AMD was certified as eligible in only four days, unlike the usual months-long process other companies had gone through in the past. The $750,000 for voting booths was quickly earmarked for AMD, even though it had nothing to do with election equipment.
County officials squirmed to justify the decision. Phyllis Korab, director of the county's equal opportunity office, explained the stretch to investigators this way: "A lot of people were having difficulty with that. [But] if the company has a capability of doing work, there's no reason why they can't expand. There's no reason why they can't have their application expanded to include that scope of work because we're in the business of trying to help minorities and women to participate in county contracts." Sure, and the neighborhood hot dog vendor might like to manufacture car mufflers some day, but you wouldn't hand him a dollar for a frank and a million bucks for a gross of glass packs.
The County Commission approved the $17.2 million contract with ES&S on December 11, which earmarked $878,000 for AMD. Faced with criticism from the media, Corwin defended AMD 's proposed work of inspecting, assembling, and testing the booths and voting machines. Corwin skirted the obvious fact that the medical company would simply pass $750,000 to a nonminority manufacturer. This appeared flagrant to Commissioner Graber, and he wrote to then-commission Chairwoman Lori Parrish, "This vendor is not [a minority company]. This essentially constitutes a pass-through of nearly $750,000, which is the same as brokering, a violation of our ordinance."
Hood, whom Oliphant had contracted as a consultant in the voting machine selection process, also lashed out at Parrish. "As you know," he wrote in an e-mail, "I have complained for years about this kind of thing in the minority program. This ripping off is going on all the time. What rubs me the wrong way is: when will it end? This lack of oversight is the very reason the program can never [work] as intended. What we need is oversight, tracking down of the payouts to make this program work." Parrish shrugged off the complaint. "We did the best we could," she replied.
A day later, Akhil Agrawal faxed a letter to Parrish that disputed accusations of brokering, noting that the company would buy the voting booths using its "own funds." That apparently satisfied county officials, although the pass-through was obvious.
Parrish now says that, to the best of her recollection, it was her understanding that American Medical Depot was actually going to manufacture voting booths.
But proof of brokering wasn't difficult to find. As part of the Oliphant investigation, assistant state attorney John Hanlon subpoenaed checks issued by ES&S, as well as checks cashed and issued by AMD. Each time ES&S sent a check to AMD, the Hialeah company would cut a check a day or two later for the same amount to Pivot International in Lenexa, Kansas, which builds voting booths. In the past, ES&S had always bought the booths directly from Pivot.
"What I'm asking you," Hanlon grilled Sukrit Agrawal earlier this year about the money transfers, "is how is that your own funds? Because ES&S gave it to you?"
"We consider a prepayment our own funds," he replied.
Hood calls the County Commission "co-conspirators" in the AMD pass-through. Of course, with so many officials and businesses culpable in the brokering scam, the broom of justice would need to sweep wide. Graber grudgingly admitted as much.
"Is it your feeling, yea or nay, that the county was defrauded as a result of this brokering deal?" Hanlon asked during a deposition earlier this year.
Graber first hedged. "It's my opinion that that money was not utilized the way it should have been," he said. "It appears to be our own staff that said it was all right. Could you say it's the company's fault? It was almost as if the company was forced to do it."
"To get the business?" Hanlon asked.
"To get the business," Graber replied. "Could you say they defrauded us? I think we made them do it."
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