Authorities call for tougher campaign finance laws following Rivera probe

Article Courtesy of The Miami Herald

By Scott Hiaasen and Patricia Mazzei

Published April 21, 2012


State authorities investigating Rep. David Rivera’s campaign finances called on the Florida Legislature to stiffen the laws they say frustrated their 18-month investigation of the congressman. 


Miami-Dade prosecutors on Wednesday formally closed their investigation of Congressman David Rivera without filing criminal charges, and called on state lawmakers to stiffen the campaign-finance laws that they say frustrated their 18-month investigation.

Working with the Florida Department of Law Enforcement, prosecutors examined Rivera's spending from campaign accounts during his years as a state lawmaker and concluded that Rivera "essentially live[d] off" campaign contributions for several years, according to a memo released late Wednesday. But state laws on campaign and legislative spending made prosecution impossible, the State Attorney's Office concluded.

For example, the FDLE found that Rivera, a Miami Republican, charged travel expenses to both his campaign accounts and his legislative office account -- resulting in $29,500 in double-billing from 2006 to 2010, the records show. But prosecutors said they could not charge Rivera with felony theft, because state law says any charges based on false travel vouchers must only be misdemeanors -- and must be prosecuted within two years of the offense. 

Through his campaign, Rivera issued a statement calling the prosecution memo "outrageous and libelous." He said the report fails to mention "detailed evidence refuting all of their false allegations" that Rivera provided to investigators.

"In the end, however, one fact remains. Congressman Rivera has been exonerated," the statement said.

Much of the investigation focused on expenses charged to Rivera's campaign accounts, including dry cleaning services, pet services, dental care, and "travel expenses for his girlfriend," according to a July 2011 FDLE report. The FDLE believed Rivera spent as much as $65,000 in campaign funds on "non-campaign related credit card charges" from 2006 to 2010, records show.

But Rivera argued that his entire life is devoted to politics -- making almost every expense a political expense that can be reimbursed with campaign funds, according to the prosecutors' memo. Indeed, Rivera argued that he was still owed thousands of dollars in campaign funds for gas and wear and tear on his car from driving to political events.

Before he was elected to Congress in 2010, Rivera served four two-year terms in the state House of Representatives.

"Essentially, the subject's position is that he was for a period of almost a decade, continuously and simultaneously engaging in official business [and] campaigning for public office," prosecutors Jose Arrojo and Howard Rosen wrote. "His entire life's focus was on political activities."

In a meeting with prosecutors, Rivera also said it was not improper to use campaign funds to pay for expenses for female travel companions because "as a single man running as a political conservative, it was necessary for him to appear at campaign related events with a female escort," the memo says.

In a second statement issued late Wednesday, Rivera's campaign said: "Among the many fabrications in their report, Congressman Rivera never stated his campaign travel included female companions due to his status as a 'single man running as a political conservative.' Congressman Rivera plans on conferring with attorneys to consider the possibility of legal action against the State Attorney for this and other libelous statements."

Prosecutors wrote that they do not agree with Rivera's interpretation of the campaign law, but they felt "forced to acknowledge" that the law is so vaguely written that it allows for broad interpretation.
"It would greatly aid prosecutors in these types of inquiries and provide clearer guidance to candidates if the law was revised," the prosecutors wrote. "As part of this inquiry we have been confronted with the fact that an elected official over a period of many years may essentially live off of a combination of contributions ... while avoiding penal sanction."

Frustrated by the campaign laws, the prosecutors considered charging Rivera with racketeering, but the lawyers "were unable to find any support under Florida law for this theory of prosecution."

During his years in Tallahassee, Rivera had "hundreds of thousands" of dollars in campaign funds at his disposal, investigators found. In addition to contributions to his state House campaigns, Rivera also raised thousands of dollars toward his election as a state committeeman, an obscure post within the state Republican Party. State law allows candidate for party elections to raise and spend unlimited amounts of campaign money, without public disclosure.

Investigators found that Rivera maintained three different campaign accounts from 2004 to 2010, and used money from those accounts to reimburse payments on four credit cards he used.

Prosecutors also investigated whether Rivera filed misleading financial disclosure statements while in the Florida Legislature, by failing to disclose some $510,000 paid by a Miami dog track that hired Rivera as a consultant for a political campaign to win voter approval for slot machines at parimutuels. The money was paid not to Rivera, but to Millennium Marketing, a company managed by Rivera's mother and her business partner, records show.

Investigators traced at least $137,000 of that money from the company back to Rivera. But Rivera's mother, Daisy Magarino, and her partner, Ileana Medina, told prosecutors that the payments to Rivera were loans, not income. When Rivera needed money, "they lent it to him," Medina told prosecutors.

Magarino and Medina provided copies of promissory notes intended to confirm the loans -- but they could not produce originals. However, prosecutors said they could not disprove the characterization of the payments as loans. 

The dog-track payments remain the subject of a separate investigation by the FBI and the IRS.

U.S. Rep. David Rivera won't face criminal charges in state investigation


David Rivera: Allegations of Official Misconduct, Unlawful Compensation, Fraud & Theft