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Probers may at last look into $20 million penalty

STORY BY LISA ZAHNER, (Week of February 28, 2013)

With the city set to fork over $20 million to exit its wholesale power contract with Orlando Utilities Commission as part of the sale of Vero Electric to Florida Power and Light, questions are re-emerging about the way the OUC contract was negotiated out of the public eye and whether crimes may have been committed in the process.

When the Vero Beach City Council voted Dec. 4 to put the sale of the electric utility to voters in a referendum, the agenda that evening was so packed that a possible criminal investigation over $20 million pretty much got buried.

Former Councilman Brian Heady has pressed ad nauseum for someone to own up to putting the $20 million penalty in the contract.  But this time around, former Councilman Charlie Wilson demanded some answers. Now it’s time to see whether the current City Council has the fortitude to find out, once and for all, what happened.

Wilson’s statements are on page nine of the 34 pages of minutes of the Dec. 4 meeting:

“He (Wilson) asked this Council at a future meeting to ask the City Attorney to bring forward an official request to the Florida Department Law Enforcement (FDLE) asking them to look into this matter. Unless they (Council) want to hide something, then full transparency would be a report requested by this Council to FDLE as to the situation having to do with the bid, signing and the penalty having to do with the contract that they are in currently.”

Wilson’s request was heard, and Vice Mayor Tracy Carroll got the ball rolling. According to the minutes, “Mrs. Carroll asked Mr. Coment if he could provide Council with a document that is required for an FDLE exploration into this issue. She was not one-hundred percent sure what this body produces and what they do for the City. She just wants to see a general outline of what it takes for the FDLE to look into a matter.”

City Attorney Wayne Coment agreed to do so. The minutes do not state that any council member objected to going down the path toward opening an investigation. Mayor Craig Fletcher thanked Wilson for his statements.

Wilson said he intends to ask for a status report on what Coment found out from the FDLE at the March 19 city council meeting.

“The city attorney’s office has been very busy with the electric contract and referendum. The second meeting in March would mean the city attorney had three months to respond to council’s request,” Wilson said. “I think that is plenty of time.”

Why would an investigation into the OUC contract be a legal and political hot potato for the city? Several reasons, based just upon what is already in the public record. The following was extensively reported in Vero Beach 32963 in 2009 and 2010:

The bid and contract negotiation documents were sealed for two years from the public, based upon the claim that they contained “trade secrets.” Consultant Sue Hersey maintained all records in her home-based office in Boston, even having bid packets shipped directly to her from bidders to circumvent Florida’s open records laws.

Neither the public nor the City Council was told that FPL was one of the three qualified bidders for the city’s electric power contract when bidders were evaluated. That information was discovered two years later when bid evaluation documents were accidentally sent by e-mail by then City Attorney Charles Vitunac to utility activist Stephen Faherty.

Vitunac and former Utility Director R.B. Sloan traveled to Boston to meet with Hersey and the Boston attorneys working on the deal to review documents so the bid documents and work papers would not be at Vero Beach City Hall, where they would become public record.

City Council members have admitted that they were not given a copy of the OUC contract prior to voting on the 20-year, $2 billion deal with OUC. Instead, they were each briefly “shown” a copy and given a Powerpoint presentation by Hersey.

The original contract which the City Council voted on was not retained by the city clerk and made part of the public record of the April 2008 meeting as required by Florida’s public records laws. The contract the council members were “shown” and voted on was not returned to Vero Beach until Heady in 2010 ordered Hersey to bring the original documents from Boston.

Heady and others still question whether the documents delivered are the originals. Since the city clerk did not keep a copy in 2008, the public may never know. City Clerk Tammy Vock maintains that she is only responsible for keeping records that are given to her.

As part of a grand jury probe into possible bid-rigging, former City Manager Jim Gabbard told an investigator from State Attorney Bruce Colton’s office that there were no changes made to the OUC contract.

In fact, it was determined that there were no less than 115 changes made to the contract after it was voted on by the council, and then-Mayor Tom White signed a new signature page that was placed on the changed contract.

Wilson has stated publicly that while he was on the City Council, he was told by OUC executive Jan Aspuru that OUC did not request the penalty be put into the contract. Aspuru later denied making that statement, but the fact that OUC recently inked a similar wholesale power deal with the City of Lake Worth without such penalties tends to support Wilson’s argument.

“I think it’s time we learned what really happened. Was it legal incompetence and malpractice by Mr. Vitunac and others or something even more sinister?” Wilson said, adding that taxpayers deserve an answer. “Enquiring minds want to know before the statute of limitations runs out.”

Heady said the city must demand an investigation regardless of whether the statute of limitations for criminal prosecution has expired because the taxpayers could have some civil recourse against individuals should wrongdoing be proven.

“If it can be shown that Sue Hersey and Maeve Purcell, the Boston attorney, violated the law, or that they put the $20 million penalty in the contract, the city might be able to make a claim on their malpractice insurance,” Heady said. “That could be millions of dollars, and although it’s not the whole $20 million, it’s something.

“And with the documents being kept in Boston, and Vitunac and R.B. (Sloan) flying to Boston, and Sue Hersey bringing documents back and forth across state lines, who knows, RICO (Racketeer Influenced and Corrupt Organizations Act) could even come into play,” Heady said. “We have the records that they went to Boston right there in Sue Hersey’s invoices.”

Heady said he thinks his 2010 federal lawsuit against the City of Vero Beach regarding the OUC deal could work in the city’s favor by “resetting the clock” on the statute of limitations for some of the matters. During those proceedings, Heady had requested to depose the parties involved, but the city stonewalled his requests, counting on the suit being dismissed – which it eventually was.

Vice Mayor Carroll, who gave Coment the task of contacting FDLE, declined comment.  Wilson said it would take the vote of three members of the council, and a formal written request to FDLE, for an investigation to be opened – that a private citizen like himself could not request such a probe.