Rothstein Dealings With Broward Health Raise Questions About Judicial Appointment

Attorneys at Scott Rothstein's firm landed a highly privileged meeting with the executive leadership of the North Broward Hospital District in September 2008, the month after Rothstein was appointed by his friend, Gov. Charlie Crist, to the nominating committee for Florida's 4th District Court of Appeals, according to documents that were part of an internal investigation at the district.

Also, at that meeting: Broward Health Chief Operating Officer Spencer Levine, who was seeking the judicial appointment by that very same committee on which Rothstein had a vote.

Conspicuous by his absence: Troy Kishbaugh, the acting general counsel, a position that based on the district's charter gave him sole responsibility for selecting outside attorneys, the status Rothstein's firm was seeking. The architect of the meeting: Commissioner Joseph Cobo, who is currently weathering a criminal investigation for corruption by the Broward State Attorney's Office.

Yup, this is going to get complicated. Let's get into it after the jump.

The documents are contained within the files amassed by Martin Goldberg, the former federal prosecutor who was hired by the hospital district to investigate allegations by Kishbaugh that Cobo was exploiting his power as a commissioner to advance private work at his physician consulting practice.

Before we get back into those documents, a bit of history: Several months before that meeting, then-general counsel Laura Seidman had reported to the district's compliance department her concerns about Cobo collaborating with Levine to allow Cobo influence on the district's management, despite that being expressly forbidden by the district's charter. In that April 2, 2008 memo Seidman wrote that "Spencer Levine is either complicit in Commissioner Cobo's self-interested way of discharging his duties or he is turning a blind eye toward the conduct." (The compliance department found Seidman's allegation to have no merit.)

Typically, an attorney trying to win Broward Health's participation in a lawsuit would contact the general counsel, which in September 2008 was Kishbaugh, who held that position in the interim after Seidman was pressured to resign that April.

But Rothstein Rosenfeldt Adler attorney Carlos Reyes had known Cobo for about 10 years, according to what Reyes told the investigator, Goldberg. So Reyes called Cobo -- not Kishbaugh -- and scheduled a lunch at Rothstein HQs Bova Prime to discuss the possibility of the public hospital district's joining a class action suit against bond issuers. The firm was looking for parties on behalf of firms in Tampa and in California who were bringing the suit.
 Reyes and Cobo are good friends -- both active Republicans who bump into each other on the fundraiser and gala circuit. They even swap clients between Reyes' law practice and Cobo's medical consulting firm, according to the account Reyes gave to Goldberg.

Not surprisingly, Cobo thought Reyes' idea for the district to join the class action suit was gangbusters. He then contacted district CEO Frank Nask and arranged the meeting in Nask's office.

The district charter allows for commissioners to contact the CEO individually about business matters, but not to seek to influence him beyond that. That's part of the reason that the investigator, Goldberg, found no evidence that Cobo had committed an ethical violation in this particular episode, as he had in others.

Still, it seems odd that Kishbaugh was not invited to the meeting, considering he was the district's authority on legal matters. From the notes of Goldberg's investigation:

Kishbaugh learned about Broward Health's meeting with RRA when Cobo walked over to Kishbaugh's office after the meeting with Nask and other management team members. Cobo introduced Kishbaugh to Carlos Reyes, Esq. and said that Broward Health is going to hire RRA to help recoup some money for Broward Health and that RRA will do it for free.

It's apparent that Kishbaugh felt that Cobo had gone over his head. And he paid particular attention to Levine's appearance in the group.

This is a good time to refresh our memory about another contextual matter -- Kishbaugh's history with Gray-Robinson, the huge and politically powerful Florida law firm where he worked before he joined Broward Health and where he is now. As we told you in this post, Commissioner Robert Bernstein -- who has clashed with Cobo during their years on the board -- is close friends with a Broward Health lobbyist, Jason Unger, who works at Gray-Robinson. Bernstein, it should be noted, supported Kishbaugh's bid for becoming the general counsel on a permanent basis. Finally, let's highlight an important detail in that post: that after Kishbaugh was in the general counsel's office, billings by the district to Gray-Robinson shot up dramatically, from $293,000 to $784,000.

So a cynic might say that both Levine and Kishbaugh had a horse in the race. Levine wanted a judgeship; Kishbaugh may have wanted to steer legal work to his friends at Gray-Robinson. That leads us to a meeting between the two, in which Kishbaugh expressed anxiety about Levine's judicial bid being scandalized.

From the notes of Goldberg's investigation:

Kishbaugh said he could do Levine a favor so no one could make an issue of the fact that Broward Health retained a firm who has an attorney (Rothstein) on the 4th (District Court of Appeals) Judicial Nominating Committee and Kishbaugh could remove RRA as the firm to handle the bond litigation so no one can later attack Levine about it.

Sounds a little like the wise guy who tells a local businessowner about the dangers of a fire, doesn't he? But Kishbaugh's proposition would create another dilemma: if Rothstein's firm didn't represent the hospital district they would need another law firm.

Kishbaugh went to Levine and said RRA is not qualified to do this type of work, that a firm like Gray-Robinson (Kishbaugh's old firm) would be qualified.

There you have it! Everybody wins, right? But Levine wasn't going to play ball. He told Goldberg he felt "used" by Kishbaugh and refused to let Gray-Robinson take RRA's case. He poo-poohed talk of scandal.

Levine said it was not his conflict and that it is up to RRA to disclose if they have a conflict.

If Kishbaugh was bluffing, then Levine called his bluff. Ultimately, Kishbaugh signed an agreement allowing Rothstein's firm to represent the district. But remember that Kishbaugh may have worried about upsetting Levine and Cobo -- who would soon be voting on the question of whether to hire Kishbaugh permanently. From Goldberg's notes:

When Kishbaugh signed the engagement letter (to RRA), there was no gun to his head; however, he felt that his job was at stake.

In his own interview with Goldberg, Kishbaugh denied suggesting that Gray-Robinson take over the bond suit. He also said he didn't know whether Levine had a "role" in the retention of Rothstein's firm -- just that Levine attended the meeting in which the verbal agreement was made.

In April, the 4th District Court of Appeals Judicial Nominating Commission panel, which included Rothstein, voted to appoint Levine as judge, where he remains today. The votes on that panel are confidential, so there's no way to know for sure whether Rothstein cast his ballot for Levine.

Levine told Goldberg that he had known Rothstein for about two years prior to his appointment and that he attended Republican fundraisers with Rothstein, including one at Rothstein's house or at the Jewish Federation. He claimed to never socialize with Rothstein alone. He said he was "insulted" by the idea that he helped Rothstein's firm get work at the district as a way to curry favor for his judicial appointment.

Reyes told Goldberg that there was no quid pro quo between his firm and Levine's judicial nomination.

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