While serving as a state representative in 2004, Broward County Mayor Stacy Ritter voted on legislation that benefited the fraudulent company that paid her husband $20,000 a month, renovated her Parkland home at a cost of $100,000, docked her family's boat, and provided a house in Maine for vacations.
Records show that Ritter voted yes on a bill in April 2004 that limited the state's regulatory control of husband Russ Klenet's employer, Mutual Benefits Corp., and other viatical companies. In fact, it was Mutual Benefits, whose considerable efforts in Tallahassee were led by Klenet, that was behind the amendment, according to a St. Petersburg Times story published at the time.
Mutual Benefits has since been exposed by the federal government as a billion-dollar Ponzi scheme.
Ritter was one of Barack Obama's closest supporters during the presidential campaign and recently was interviewed for a job at the White House. When I contacted the mayor on her cell phone this evening, she declined comment and hung up the phone.
Here's how the St. Petersburg Times described the amendment back on April 28, 2004:
The little-debated proposal was tucked into a mammoth financial services bill at the behest of lobbyists working for Mutual Benefits Corp., a Fort Lauderdale firm that has come under regulatory scrutiny in Florida and elsewhere ... The change ... could undermine inquiries under review by Florida's banking and securities regulator, Don Saxon, and chief financial officer Tom Gallagher.
Saxon said Tuesday a complaint prompted the agency to examine the records of First Liberty Group, a Clearwater company that sells Mutual Benefits' products. ... Three months ago, Colorado's securities regulator accused Mutual Benefits of misleading investors.
... Gallagher said the change would erode consumer protections in an industry rife with abuse. "We have had hundreds of people ripped off by viatical companies that go bankrupt," Gallagher said. "Over the last six years, $660-million has been lost by investors."
You see? This was an extraordinary amendment, worked on by Klenet, that was specifically designed to shield Mutual Benefits from regulatory scrutiny. And it was done in a devious way, tacked onto a bill that included actual consumer protections. Even Gallagher was torn about the bill after it passed the House 111-1 (with seven members not voting). He strongly opposed the Mutual Benefits amendment but had championed other consumer protections in the bill.
Ritter was one of those 111 who voted for the bill, according to the state database. I'll let state and federal authorities decide if any laws -- "honest services" anyone?-- were broken, but she obviously should have recused herself from the vote.
Why would the legislature approve such a thing? Well, cold hard cash didn't hurt. The company gave about $75,000 in campaign contributions to state-related campaigns, including $1,000 apiece to their favorites in Broward County, Ellyn Bogdanoff and Steve Geller. Geller is a guy who was so close to Mutual Benefits that he recommended the company hire Klenet -- and even set up a lunch meeting at a Hollywood restaurant between the lobbyist and Mutual Benefits owner Joel Steinger.
Geller told me he thought Mutual Benefits was the "good guy."
"Do I feel duped?" he said. "Partially."
Maybe, but he should have known better. When Geller met with Klenet and Steinger, the latter was already a convicted felon with a history of regulatory actions against him and several states had already received well-publicized complaints about Mutual Benefits fraudulent business practices.
Geller also voted yes on the 2004 bill. In short, his involvement in all of this stinks.
The big money, though, came in Bogdanoff's race against Oliver Parker. Mutual Benefits pumped half a million dollars into attack ads on Parker through a federal non-profit called Alliance for Florida's Future. It's an obscene amount of money. And yes, Bogdanoff voted in favor of the 2004 bill as well.
I don't know what's worse. The fact that Mutual Benefits could buy political races and votes and basically hijack the legislative process or that they did it with money they ripped off from innocent investors.
