In what may be the most significant corruption arrest in Broward to date, the State Attorney's Office has arrested School Board Member Stephanie Kraft, 54, and her husband Mitch, a former Tamarac city attorney, with unlawful compensation, bribery, and other charges.
The alleged payment for selling out her school board office: $10,000 from the dirty developers Bruce and Shawn Chait paid to Mitch Kraft, 58.
Here's the release from State Attorney's Office:
The Broward State Attorney's Office has obtained warrants for the arrest of Broward School Board member Stephanie Kraft and her husband Mitch Kraft on charges of Unlawful Compensation, Bribery, Official Misconduct and Conspiracy to Commit Unlawful Compensation and/or Bribery.
The charges come from illegal assistance the Krafts gave two South Florida developers, Bruce and Shawn Chait, owners of Prestige Homes, who hired Mitch Kraft to help them get schools-required development fees for one of their building projects effectively reduced by $500,000.
Broward State Attorney investigators found that Stephanie Kraft then pushed school staff to
put the reduced development fee that her husband helped arrange onto the school board's "consent" agenda. She walked from the school board dais when the vote to approve the reduced fee within the consent agenda was taken.
Broward Circuit Judge Jeffrey R. Levenson signed arrest warrants charging both Stephanie Kraft and Mitch Kraft on Friday, October 1. The Krafts were scheduled to surrender at the Broward County Jail on Monday. Bond for each was set at
$9,000 $6,500 for Stephanie Kraft and $5,500 for Mitch Kraft.
The charges of Bribery and Unlawful Compensation are both second-degree felonies with a maximum sentence of 15 years on each count. The charges of Official Misconduct and Conspiracy to Commit Unlawful Compensation etc. are each a third-degree felony with a maximum sentence of five years each.
The Daily Pulp was the first to expose the Kraft's involvement with the Chaits a year ago, including the "smoking gun" email Kraft sent to Garretson to carry out the favor for the Chaits.
At the same time, Mitch Kraft was also employed by School Board lobbyist Neil Sterling at the same time Stephanie Kraft helped steer a $1.5 billion contact to Vista Health, a Sterling client. It's not clear if that is now part of the criminal investigation, though it could potentially be more explosive than the Chait angle.
The arrest reports -- here's a link to the report for Stephanie Kraft -- detail how Mitch Kraft allegedly operated behind the scenes with the Chaits to help get the developers a $500,000 reduction in the fee owed to taxpayers for their golf course development in Tamarac. Stephanie Kraft then used her position as a school board member to get the item on the agenda and push it though. For the half-million dollar favor, the Chaits paid Mitch Kraft $10,000, according to prosecutors.
Bruce Chait testified that he knew Mitch Kraft from his days as the city attorney for Tamarac and, when he was seeking the school board reduction, remembered that Mitch Kraft had told him, "Anytime you need anything from the School Board, call me," according to the arrest report.
Chait arranged a meeting with Kraft on the school board fee issue.
"Mitch Kraft told Chait that he couldn't personally do it, that he would put Chait in touch with someone that could, and that he (Mitch Kraft) would handle the matter behind the scenes," SAO investigator Angelo Pazienza wrote in the report.
Kraft then allegedly contacted former School Board real estate director Chuck Fink, who then met with the Chaits and took the lead on getting the fees reduced. It was crucial that the mitigation fee be reduced prior the Chait's closing on the Tamarac property, making it critical that the fee be reduced during the July 24 school board meeting.
"In a meeting in Bruce Chait's office, Chait communicated this urgency to Mitch Kraft," Pazienza writes. "Kraft, in Chait's presence, immediately called his wife, BSCB member Stephanie Kraft, had a short conversation and then hung up, announciing to Chait words to the effect that 'You're on the [July 24, 2007 agenda]."
Following that, Stephanie Kraft began to badger School Board official Tom Coates and School Board building chief Mike Garretson about getting the item on the agenda, including sending this email to Garretson's office:
Message Jul 11, 2007 1:05 PM
From: Stephanie A. Kraft
To: Mike Garretson, Susan A. Teich
Cc: Kim R. Simmonds
Subject: agenda item for 7-24
What agenda item # will that item be that we spoke about yesterday regarding the development on the golf course?
Stephanie Arma Kraft, Esq.
School Board Member, District 4
Coates and Garretson have since died, making School Board secretary Bette Ray a key witness. Ray was filling in for Garretson's regular secretary at the time and testified that Kraft called Garretson to discuss getting the item on the agenda. "Ray knew that Stephanie Kraft was callling about Prestige Homes becuase it was known to staff that the Prestige Homes mitigation matter was a 'hot item' for Kraft," Pazienza wrote in his report.
While the case appears devastating in its precision and evidence, Stephanie Krafts' attorney, former RRA lawyer Ken Padowitz, is proclaiming their innocence in published reports. The most audacious quote considering the facts of the case comes from Mitch Kraft's attorney, Kevin Kulik, who told the Sun-Sentinel: "[State Attorney] Mike Satz's office has a sordid history when it comes to filing charges based upon unreliable snitch testimony made by people obviously trying to save their own skins."
CBS 4 has published Broward School Board Superintendent James Notter's response as well:
This morning, we learned of the arrest of School Board member, Stephanie Arma Kraft, Esq.
Regarding today's event, there is a legal process that now must run its course. The position of a School Board member is a constitutionally created office subject to any action the Governor may deem appropriate.
Over the past year, the School Board and the District have made significant changes in our processes and procedures to insure a higher level of integrity and transparency. The Commission on Education Excellence Through Integrity, Public Ethics and Transparency delivered 14 recommendations, of which the School Board has already taken action on 10.
Our Board and administration remain committed to keeping the focus on improving the academic achievements of our students in a safe and secure learning environment.
James F. Notter
Broward County Public Schools
This is the second time in about a year that Notter has had to address the arrest of a board member, after Beverly Gallagher was arrested in a federal sting operation. She is serving a three-year sentence in federal prison.
The Browart Teachers Union took the opportunity to call for Notter's head:
"The BTU applauds the Broward State Attorney's Office for working to rid our school system of a pervasive culture of corruption through today's arrest of School Board member Stephanie Kraft and her husband Mitch Kraft," the union wrote in a release. "Community members should seize this opportunity to make a real change in Broward schools by firing Superintendent Jim Notter and other top district officials who cannot escape indirect or direct responsibility for the corrupt environment that continues to paralyze our district."