Mendelsohn Singles Out Klenet During Guilty Plea
The illicit payments made to former legislator Mandy Dawson had been widely reported, but it is interesting that seedy lobbyist and political fundraiser Alan Mendelsohn, an eye doctor by trade, singled out Russell Klenet in federal court today.
When Mendelsohn pleaded guilty to a federal charge of corruption today, he said that Klenet, the lobbyist husband of Stacy Ritter, had "taught him how to accept unreported gifts for his lobbying efforts," according to a Sun-Sentinel report.
at practice isn't ethical or legal, is it?
That can't be good for Klenet, but boy, does he get around.
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Actually that revelation really isn't all that surprising either, considering Klenet's long history with Mendelsohn, a relationship that began when both worked for Mutual Benefits fraudster Joel Steinger, who is still living in his Fort Lauderdale mansion while he awaits trial on federal fraud and money-laundering charges himself.
Forgot about Steinger? He was all the rage before Scott Rothstein came and stole his thunder.
Here's a bit of the backstory: When Steinger, a felon with longstanding ties to organized crime, was being investigated by the state for his massive viatical fraud back in 2002, he sought influence with the Attorney General's Office. That involved getting the backing of Charlie Crist, who ran for and won election as attorney general in 2002.
Enter Mendelsohn, who as a close ally to Crist who was later appointed a member of his gubernatorial transition team. Who brought Mendelsohn to Steinger? Steinger's trusty Tallahassee lobbyist, Russell Klenet, that's who.
In a 2007 deposition I dug up last year, Klenet said of Mendelsohn: "He raises a tremendous amount of money for primarily Republican candidates for office in Florida, and he was very helpful [to Steinger]. We raised a lot of money; Mutual Benefits raised a lot of money through Dr. Mendelsohn."
Even as this was going on, Steinger and Klenet were pushing key legislation to protect Mutual Benefits from strict regulation from the state. At the time, Ritter was of course a state legislator, and Steinger, who was paying Klenet $20,000 a month, renovated the Parkland home of Klenet and Ritter to the tune of about $115,000.
Mendelsohn, according to the feds, was indeed very helpful to Steinger, raising some $500,000 for the Steinger bill. Among the contributors were pari-mutuel interests, longtime Klenet client Mark Ginsburg, and debt counselor Howard Dvorkin.
Ritter, along with almost every other legislator, voted for the Steinger bill, which was bitterly opposed at the time by then-Florida Chief Financial Officer Tom Gallagher, whose office was receiving hundreds of complaints about Steinger's fraud.
When the feds busted Steinger, the con man flipped on Mendelsohn, and the eye doctor then began cooperating with the feds. Mendelsohn, according to federal accounts, claimed that he had struck a corrupt deal with Crist on Steinger's behalf. But when he wore a wire in an attempt to get incriminating statements from Crist's right-hand man and current U.S. Sen. George LeMieux, LeMieux became suspicious and called another Steinger-tied Crist aide, who in turn contacted the FBI.
Oh yes, it's a complicated web of connections -- and it all led to a seizure of millions in the Mutual Benefits accounts that are now being ravaged by South Florida's finest lawyers while Steinger's victims get little to no justice.
Inside, read an account that ties in a whole lot of your other favorite politicians into this mess, including former state Sen. Steve Geller, who brought Klenet into the mix.
Here's the passage:
The closer the investigation got to him, the more money Steinger poured into the political process. It's seemingly impossible to tally all the Steinger-related political contributions, as they came from myriad companies and individuals.
His grand plan, according to sources, was to get enough powerful politicians, lawyers, and lobbyists on his team to help thwart the investigation and pass key legislation in Tallahassee that would protect the company from regulators.
Sen. [Steve] Geller helped choose the dream team that enabled Steinger to carry it out. It was Geller who recommended that Steinger hire the senator's close friend and former legislative aide, lobbyist Russ Klenet. Because Klenet was married to then-state Rep. Stacy Ritter, Steinger viewed the hire as a two-for-one, says a source close to Mutual Benefits. Steinger boasted that Ritter was in his corner and would back legislation proposed by the viatical company, says the source.
Soon, Steinger was paying Klenet $20,000 a month for his services. In 2003, Mutual Benefits paid more than $100,000 to remodel the Parkland home owned by Klenet and Ritter, who is now mayor of Broward County. It included the purchase of a grand piano now displayed in the couple's living room.
Court records reveal that Klenet, who led Steinger's legislative agenda, became a close friend of Steinger's. He was a regular fixture at Steinger's $6 million Las Olas-area home on the New River and said in a deposition that he and his lobbying assistant, Aaron Scavron, referred to him as "uncle." He swam in Steinger's pool with his children. Ritter and Klenet even had Steinger over for a New Year's Eve party at their home.
Geller, Klenet, and Ritter were just a few of the willing pawns Steinger used in his attempt to pass legislation and win favor with the state agencies on his tail. In addition to contributions to parties and committees that totaled more than $1.5 million, sources connected to Mutual Benefits contributed tens of thousands of dollars to individual politicians, including Sen. Dave Aronberg.
Aronberg, who was running for the state Senate at the time, says he first met Steinger in 2002 through a friend, Ron Klein, who was a Democratic state senator at the time and has since been elected to Congress.
He says Klein drove him to Steinger's mansion on the New River in rather mysterious fashion, just telling him there was someone he should meet. There, Steinger's wife at the time fed them lunch. "It was a very big house, I remember that," says Aronberg, a Democrat from Greenacres. "I pretty much kept my head down and ate. It was delicious. No money changed hands or anything. It was my first time meeting Joel Steinger, and as I look back, I think, 'Wow,' especially after what I've learned about him since."
Later that year, Aronberg accepted $500 for his campaign from a company owned by a Mutual Benefits sales agent named John Trombino as well at least another $1,000 from two of Steinger's attorneys, John M. Hogan and Jeffrey Orseck. Aronberg says that he, like Geller, didn't know about Steinger's past or that he was under state investigation.
This happened despite the fact that Aronberg, a lawyer, had previously worked at the Attorney General's Office during the time the Steinger investigation took place. He says he wasn't privy to the investigation, never checked Steinger's background, and had no idea he was associating with a convicted felon.
"People don't realize that we have so little time," says Aronberg, who plans to run for attorney general in 2010. "It would be impossible to do a background check on everyone who gives a campaign contribution. And we have a thousand bills to keep up with."
Aronberg was far from alone. Some other prominent politicians who received contributions from Steinger-related sources: George W. Bush, Adam Hasner, Franklin Sands, Eleanor Sobel, Mandy Dawson, Gwen Margolis, Jeff Atwater, and many others.
It was Klenet who provided Steinger with lists of legislators to give money to, according to SEC records. But Klenet wasn't alone either; Steinger also hired plenty of reinforcements in the lobbying realm, including Antonacci, Big Tobacco rep Larry Williams, and onetime Republican Party Chairman Wil McKinley.
All of the money and hires provided Steinger much good will in Tallahassee. But he had one very strong enemy: Florida's chief financial officer, Tom Gallagher, who vowed to crack down on Mutual Benefits because of all the complaints about the company. When Steinger's legislative forces backed a bill during the 2004 session that would keep the company under the regulatory umbrella of the relatively toothless Department of Insurance, Gallagher urged legislators to vote against it.
The entire Steinger political machine mobilized behind the measure. Aronberg says that Geller openly touted it and that Klenet's assistant at the time, Scavron, lobbied him to support it.
The measure was tucked in a massive financial services bill that was passed on April 28, 2004. The amendment was written by Republican state Sen. Bill Posey of Melbourne, who has since been elected to Congress. Although Posey has no known direct ties to Steinger, he received several thousand dollars in campaign contributions from Alan Mendelsohn, the Hollywood ophthalmologist and Republican fundraiser who served as treasurer for the Florida Medical Association PAC. Posey did not respond to a call for comment.
Mendelsohn's role in Mutual Benefits' legislative effort is still mysterious. Klenet testified in a deposition that Steinger hired Mendelsohn and that the eye doctor was "very helpful" in raising campaign contributions for Mutual Benefits, especially among Republicans. Mendelsohn, who raised big money for governors Jeb Bush and Charlie Crist, recently resigned his position at the medical PAC and remains under investigation for his role in the Mutual Benefits scandal.
The bill passed with only a couple of contrary votes. According to a source close to Steinger, Klenet called his boss with the good news. A jubilant Steinger thanked Klenet and also asked that he thank his wife, Ritter. She supported the amendment, as did Geller, Bogdanoff, Aronberg, and all the other Tallahassee pols Steinger showered with money.
The passage of the amendment was a big victory for Steinger. But a major problem remained: Those plodding but pesky investigators were still on his tail.
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