A newly formed group that calls itself the Flagler Palm Coast Watchdogs last week filed a lawsuit against the Flagler County Commission, seeking to halt work on the old Memorial Hospital property in Bunnell slated to be the sheriff’s new headquarters. The suit raises questions about the propriety of the county’s $1.23 million purchase of the property last August.
In particular, the lawsuit alleges that Commissioner Barbara Revels never disclosed her business relationship with Bruce Page, the CEO of Intracoastal Bank, before pushing for the purchase of the old building, which Page and two other men owned, and voting on the purchase rather than recusing herself. Revels, according to her own annual financial disclosures, owned stock in Intracoastal Bank worth $100,000, and is a close friend of Page’s. Revels also has a six-figure loan with Intracoastal.
Florida law requires elected officials to abstain from voting on any measure that would yield them a “special private gain or loss” or yield a business associate a similar gain or loss. The law defines a business associate as “any person or entity engaged in or carrying on a business enterprise with the officer as a partner, joint venturer, co-owner of property, or corporate shareholder (where the shares of the corporation are not listed on any national or regional stock exchange).”
The purchase of the old Memorial Hospital was controversial because it was hurried, the negotiations that led to it were conducted in secret, with each county commissioner knowing about it well before the matter was disclosed at an open commission meeting, the price taxpayers paid for it was three times the assessed value of the property, and double its market value. The owners of the property, particularly Page and Michael Chiumento III, the lawyer, have close ties to local government officials. They had tried and failed for a decade to sell the building, until the deal with the county.
An ethics complaint was also filed against Revels at the Florida Commission on Ethics last month, making claims similar to those raised by the lawsuit.
“There’s no damages other than injunctive relief,” Josh Knight, the Palm Coast attorney representing the Watchdogs group, said Friday. “The sole purpose of forming the Flagler-Palm Coast Watchdogs, and you’ll see this in our complaint, is they’re dedicated to ensuring fiscal responsibility and the total transparency of the activities of our local governments, as well as their strict conformance with Florida statutes consistent with Florida government in the sunshine doctrine. We’re not trying to create problems here. There’s a genuine issues at the heart of this matter, the least of which being Ms. Revels’s failure to provide us with a Form 8 conflict of interest. She is a shareholder with the bank that Mr. Page and Mr. Chiumento are shareholders in. They’re the ones who profited from this deal.”
Revels was on vacation in the Bahamas this week and could not be reached. But Al Hadeed, the county attorney—who got the lawsuit on June 25, when it was electronically filed, as he is named on the documents—said the lawsuit had no validity.
“They are related by virtue of being shareholders of the same bank,” Hadeed said of Page and Revels, “but she’s not a bank officer, she doesn’t sit on the board of directors, she doesn’t have any decision making authority within the bank. She’s a shareholder and an account holder, and the bank was not involved in this transaction. Bruce Page was in his individual capacity.”
Revels, Hadeed added, had disclosed her relationship to Page since her financial disclosure form was on record. But the voting-conflict disclosure form is a separate requirement.
“Commissioner Revels’s relationship with Mr. Page was known to these individuals that have complained about this vote,” Hadeed said. “They knew it at the time and they were voicing their reservations concerning that relationship, and ultimately it’s not for me or the County Commission or the judge to determine whether the failure of Commissioner Revels to file a disclosure form amounts to a violation” of state ethics laws. “That’s going to be decided by a different agency,” meaning the Florida Commission on Ethics.
The ethics commission neither confirms nor denies the receipt of ethics complaints, and does not disclose whether one is being investigated until it reaches a decision on whether probable cause exists for further action. So far, there is no indication that the ethics complaint is being investigated, as neither the county nor the individual who filed it have been contacted by investigators.
“I don’t know that you can read anything from the silence,” Hadeed said. “I’m not trying to infer anything from the silence, other than the fact that we have no official or preliminary determination of any kind.”
Both the lawsuit and the ethics complaint were filed by men closely associated with the Ronald Reagan Assemblies of Flagler County, a right-wing group to the right of the traditional Republican Party that aggressively but not always accurately aims to subvert local government in the name of fiscal responsibility. Ray Stevens, twice a former Republican candidate for sheriff, filed the ethics complaint. (July 2 update: Stevens said he was contacted by the ethics commission to provide additional information.)
Dan Bozza, a retired, bookish individual who says he spent a career “in finance” at the Chicago Stock Exchange, is the only named officer of the Flagler Palm Coast Watchdogs. Bozza was the write-in candidate in the Republican primary race that ensured the election of County Commissioner Charlie Ericksen two years ago, unseating the more moderate Alan Peterson. There were no other candidates in that race, and by law Independents and Democrats would have had a right to vote in it, even though two Republicans were running, since its result were to decide the final outcome. By fielding himself as a write-in, Bozza, providing an alleged third choice on the ballot, and to pointed criticism from some local GOP leaders, “closed” the primary so that only Republicans could vote—thus ensuring that Peterson could not benefit from more moderate votes. Peterson lost.
In an interview Friday, Bozza would not say who else is involved in the Watchdogs group, only that the group—if it is, in fact, more than one person—is seeking a non-profit designation from the IRS. Bozza said he set up the Watchdogs “to “give a lot of angry people a way to channel their anger” by donating to the Watchdogs, which in turn will file more lawsuits against local government. The twin missions of the group, in other words, is to raise money and fund lawsuits, Bozza said, because “it’s only because of lack of funding that prevents citizens from their right to justice. Justice is expensive.”
The lawsuit, however, appears less than precise in what it’s seeking, beyond an injunction to stop work on the old hospital. The suit states that Revels, as a co-shareholder in Intracoastal Bank, “had an affirmative duty to disclose her business relationship with Mr. Page and/or Intracoastal Bank prior to voting on the purchase” of the old hospital. And it refers to Commissioner Frank Meeker’s reluctant decision to vote for the hospital buy. But the suit does not seek to reverse the purchase. It claims that the Watchdogs—Bozza is not personally named—would suffer irreparable damages if any additional money is spent on the old hospital property. But the plaintiffs may have trouble convincing the court of how they would be suffering, if the Watchdogs is presented as a nameless front without a stable of actual taxpayers behind it: courts generally don’t take kindly to fronts, preferring to deal with flesh-and-blood individuals.
“We just want more clarification and assurances that this was done in the best interest or residents and taxpayers of Flagler County,” Knight, the attorney for the Watchdogs, said. “I don’t believe that it was. I’ve spoken to several sheriff’s deputies, they feel that it’s a joke of a deal. This is going to be the future site of the sheriff’s department, they’re aware of the property, they think it’s a joke. They think it’s compromised from a security standpoint, from a strategic standpoint, not to mention the pervasive environmental issues plaguing that property.” (Sheriff’s deputies’ claims are not part of the lawsuit.)
Knight on Friday said he was surprised that Hadeed had already read the lawsuit, even though it had not been docketed yet by the Clerk of Court. “How’s that possible? I didn’t send him a copy,” Knight said.
But he had. Hadeed received an electronic “Notice of Service of Court Document” of the filing on June 25 at 12:27 p.m., according to an email he received, because his email is among those included in the filing list. A minute earlier, he received another email from the Florida Courts E-Filing Portal, advising him that “you have received this email because you have been added to the Florida Courts E-Filing Portal eService List by… Joshua David Knight.” In other words, Knight’s e-filing ensured that Hadeed would immediately receive the documents. All such court documents must now be filed electronically.
That enabled Hadeed immediately to get to work on getting the case dismissed. That’s routine whenever a lawsuit is filed. But Hadeed said that even though he was having difficulties framing his motion, because of the vagueness of the complaint, he would be filing it Tuesday.
“It’s very difficult for me to understand the cause of action that is being asked,” Hadeed said. “There’s an allegation about a failure to disclose a relationship on the part of one commissioner, and there’s an allegation of a commissioner who provided an explanation of his vote, which, by the way, only has partial quotes in the complaint. And from those two allegations, they believe under the ethics law that they’re entitled to get an injunction. Now, I strongly disagree and I will make that argument to the court. I don’t think there’s any merit to the suit, absolutely no merit.”
Hadeed said the timing of the suit may have to do with election season, though Revels is not running for office this year. Meeker is, and though he is a Republican, the Ronald Reagan group has been his bane, going as far as trying to oust him from the Republican Executive Committee, and he’s not hidden his antipathy for it in return. Meeker faces in the Republican primary the same challenger he faced two years ago: Dennis McDonald, another Ronald Reagan Assembly favorite and a multi-warheaded thorn in the side of city and county governments.
Knight was the attorney representing McDonald in McDonald’s attempt to stop Palm Coast from rebuilding the Palm Harbor shopping center (though Palm Coast is not involved in that project, except as a regulatory agency) and possibly widening Palm Coast Parkway, because the construction entailed removing some trees. Palm Coast counter-argued that the suit was riddled with factual errors and false assumptions, had no merit, and managed to get it dismissed. The city sought to get it dismissed with prejudice, meaning that Knight would then be barred from bringing such action again against the city. Knight declined. The city then sought to get Knight and McDonald to pay $18,000 in attorney and legal fees.
That action is pending a hearing on Aug. 21 before Circuit Judge Dennis Craig, who is the likely judge who will hear the lawsuit Knight filed on behalf of the Watchdogs.
As with the lawsuit against Palm Coast, however, the lawsuit by the Watchdogs may run into monetary issues: if the judge were to grant an injunction, normally the party seeking the injunction would be required in such cases to put up a bond—either a surety bond or a personal bond—to cover the sums of the contracts being stopped. Those sums, in the old hospital case, will be very large. The Watchdog group appears to have no funds at the moment, and would have trouble finding an insurance company that would back a surety bond, leaving the bond to be covered by individuals’ dollars, though members of the Ronald Reagan group are not known for having frequented too many poorhouses.
“My goal,” Knight said, “is to immediately start depositions, and I’m confident I’ll obtain enough testimony to justify the claims that we’ve set forth in our complaint. And look were not trying to cause undue trouble here, we want to make sure that the best decision was made for everybody, and it seems like a recurring theme here that the needs of the few outweigh the needs of the many. It just doesn’t add up on paper.”