Fifteen months after receiving seven allegations that then-Mayor Milissa Holland misused her office to favor her employer, Coastal Cloud, and violated the city charter by interfering with city employees’ functions, the Florida Commission on Ethics on Friday threw out six of the seven allegations, and found probable cause of an ethics violation regarding one of the charges–that Holland inappropriately used her city email account to send three “emails soliciting business for her employer.”
Holland, who acknowledged in June 2020 doing so, said she did so inadvertently, comingling city and business email accounts, and apologized for the mistake.
Melody Hadley, the Ethics Commission advocate, or lawyer–she is the equivalent of a prosecutor in the case, the nine-member commission, chaired by Joanne Leznoff, is in the role of a judge–had actually recommended a probable cause finding of an ethics violation on two of the seven counts. The advocate concluded that Holland’s employment with Coastal Cloud would “create a continuing or frequently recurring conflict between her private interests and the performance of her public duties or that would impede the full and faithful discharge of her public duties.” The Ethics Commission, however, rejected the recommendation.
In essence, a more-than-year-long drumbeat of sound and fury over allegations of corruption, cover-ups, cabals and criminal acts, a drumbeat that influenced two elections, a city manager’s career and the mayor’s own, among others, tarnishing the reputation of a leading private company in the county, comes down to this: a finding that Holland sent three emails from her official account–emails that led nowhere–and that could not be corroborated with any evidence of a pattern, underscoring her claim of inadvertance.
“I’m grateful that the commission came to the same conclusion which I stated right from the beginning,” Holland said this morning, “which is that these allegations were without merit. And I’ve already acknowledged and addressed the two emails that were sent to the city of Orlando, months ago. I’ve done that, not only publicly to the media but throughout this ethics commission process, which I have been fully cooperative in.”
Holland stands to be fined by the commission. As ethics fines go, the amount is likely to be in the category of symbolic wrist-slaps–somewhere along the lines of a former sheriff’s $500 fine for accepting a gift membership at a local club or the fine over a mail flub by a school board member that had started as a $25 fine. Holland and the Ethics Commission will reach a settlement agreement over the actual amount.
The Ethics Commission’s ruling all but closes the book on the most grotesque episode of disproportionate scandal-mongering, potential defamation, and not a small measure of irresponsible journalism in Palm Coast government’s history. The cabal, it turns out, was not of Holland’s making, but her opponents’, though her lapse in judgment seeded what would otherwise have been a non-issue. As late as the last 48 hours the Lowe campaign was pushing the noxious narrative even though by then Maher had become aware that the commission’s findings would be muted.
“It’s no secret that this has been a very destructive conversation, not only to me personally but to the city as a whole,” Holland said. “It’s not representative of what is going on in City Hall in any way, shape or form. So it’s it’s been damaging in a variety of ways. It’s a city organization and I have great respect for that. I admire very much the people that work in and outside of that agency, every day, and it’s caused unnecessary undue stress on each and every one of their lives as well.”
The ethics complaint was filed by Jay Maher, an employee of the city for some 18 years who resigned last year after clashing with then-City Manager Matt Morton.
In the closed-door session of the Ethics Commission on Friday, which both Holland and Maher attended, Mark Herron, Holland’s attorney, argued against a fining in all the allegations, stressing the inadvertance of the email issue. Commissioners were not moved by the “inadvertance” argument, even if the misuse of the email account was, in fact, inadvertent. One commissioner noted that some public officials refuse to use their public email accounts for fear of transgressing the rules with just such misuses.
Audio: The Closed-Door Session on the Holland Case
“I do appreciate, understand and acknowledge that those signatures, you auto-sign them, so I get that,” Leznoff, the chairperson, said. “However, in the conjecture that it was inadvertent, I read the detail and content of those emails and found them just full of references to the respondent’s employment as mayor and referencing who she was meeting with in her public capacity and those types of things clearly demonstrated to me showing the recipient of the email that she was mayor, and that it was a very salient point in her communication. So it may have been inadvertent, but to me the content of the emails themselves indicate to me that it was not, that she very clearly wanted to bring home the point that she was mayor at the time.”
Leznoff got pushback from Commissioner Travis Cummings, a former Clay County commissioner, four-term House member and House Appropriations Chairman for two years–and insurance executive all those years. “In some instances in private work I may have referenced the fact that I was a state representative, I was a mayor, I was a city commissioner or whatever. I don’t want to get in that position where that’s what we’re finding, are people who are in elective office can’t even reference the fact that that’s what they do in their second job, third job.” He said the mistakes are notoriously more common when working off a phone. “I see that as inadvertance.” He was ready to throw out that allegation, too.
Leznoff said a “temptation” to misuse one’s office should not be synonymous with an actual misuse, as appeared to be the case, in his view. He described such allegations as a “slippery slope” that would keep a lot of individuals from serving. He then spoke favorably of his past experience with Holland when she was a county commissioner. “Ms. Holland was a commissioner with Flagler County,” he said, “obviously it doesn’t affect my vote in terms of this but it does allow me to relate with how she conducted herself.”
The commission voted unanimously for a finding of probable cause only on the email matter.
Maher had been the city’s internal investigator of waste, fraud and abuse cases and managed the city’s whistleblower hotline. Maher leaked his complaint to allies, who used it as the basis for what became a six-month smear campaign against Holland in the midst of her re-election run for mayor.
One candidate who announced a run against her, Michael Schottey, who had served as Morton’s chief spokesman for six months before their falling out, opened his campaign for mayor using the allegations as his basis. But he embellished them with false claims that Holland was under criminal investigation by the Florida Department of Law Enforcement, the State Attorney’s Office. She was under investigation by neither. Since FBI agents had interviewed him and others at the city, he claimed, without evidence, that she was also under federal criminal investigation. The FBI does not confirm or deny such claims, nor do those interviewed know. Nevertheless, the claim was asserted as true.
Using that approach as their template, other candidates for Palm Coast City Council, including Alan Lowe, running for mayor, and Ed Danko and Victor Barbosa, running for city council seats, adopted the Schottey template and amplified it with a Holland-is-corrupt mantra that took on a life of its own–again without evidence but on the strength of repeated lies and prophesies of impending arrests that would walk Holland and Morton out in handcuffs. The only source of evidence for any of it was Maher’s ethics complaint, though the Ethics Commission does not ever contend with criminal violations, nor do its advocates (or attorneys) ever reveal the outcome of an investigation before its disposition by the commission.
Anything that has to do with an ethics complaint’s outcome, in other words, is speculation, hearsay, fabrication or lies until the commission acts on it. (In its announcement of Friday’s actions, the Ethics Commission today revealed that recently filed complaints against Danko and Barbosa were dismissed for lack of legal sufficiency, a conclusion that does not reflect on the accuracy of the allegations–only on whether the commission has jurisdiction.)
That took place only last Friday, in the closed door session of the Ethics Commission itself. But for six months before Holland’s re-election in November, and for months since, playing into the mayoral campaign in the special election decided Tuesday, with the election of David Alfin, the speculation, the hearsay, the fabrications and the lies again envenomed a disproportionate amount of the rhetoric surrounding Holland’s resignation and the subsequent mayoral campaign and again played a central role in the Lowe campaign, itself masterminded by Ed Danko, the city council member. Along the way, Barbosa revived the rhetoric of “corruption” in attacks against the city manager, who also resigned.
The Maher complaint consisted of seven allegations. The allegations were that Holland:
- Had a conflict of interest in having Coastal Cloud do business with the city. (Allegation dismissed.)
- Used her public position to benefit Coastal Cloud in using city emails. (Probable cause found.)
- Used her public position to benefit her company by sending emails to fellow-council members. (Dismissed.)
- Used her position to influence a city technological report. (Dismissed.)
- Violated the ethics code by having Coastal Cloud be among the sponsors of the city’s Hackathon in January 2020. (Dismissed.)
- Created a continuing conflict by working for Coastal Cloud while serving as mayor. (Dismissed.)
- Used her position to write–or compel staff to write–college letters of recommendation for the children of Coastal Cloud owners. (Dismissed.)
The source of perceived conflict goes back to what even then was a possible lapse in judgment on Holland’s part in early 2017, abetted by her colleagues on the commission: accepting a voluntary, no-cost contract with Coastal Cloud to build an interactive web-based customer service platform for the city and its residents–what became known from the user’s end as Palm Coast Connect. Holland maintains she was not at the origin of the contract.
“Remember, I was not the one who brought Coastal Cloud in, Jim Landon was the originator of the innovation partnership agreement,” Holland said of the former city manager, whom the council fired in the summer of 2018. “And that was not only fully vetted and created through Bill Reischmann’s office, but this was addressed and discussed through many different council workshops and public hearings before ultimately the relationship was codified, and it was done in a way that would avoid any conflicts of interest.” Holland acknowledges she had the opportunity to say no to bringing Coastal Cloud in, but that “from the beginning it was very clear, was very transparent. I did not participate in any of the meetings in regards to Coastal Cloud, I was not sitting at the table, I was not privy to the email conversations back and forth between the City and Coastal Cloud, so I think everything was handled according to the rule of law, and again, any allegations brought forth by this individual have been deemed to be found with zero merit.”
Holland had become employed at Coastal Cloud in 2016, overseeing the company’s public sector contracts (she no longer does so, now overseeing more health care related contracts). Though it was at no direct cost, and although Holland abstained from any votes or discussions related to the contract–she was absent from the meeting when the agreement was voted on–the relationship between the city and the company inherently entailed a tangle of roles that, however steered from actual conflicts, were rife with perceptions of improprieties.
On the other hand, Holland and the council were making a concerted push to “Buy Local, Shop Local,” a campaign focused on promoting local business to benefit Palm Coast as a whole. Coastal Cloud has been a celebrated company that relocated to the county in 2013 and in a matter of a few years became one of the county’s leading private-sector employers, also employing a slew of high school interns, donating time and resources to the school district and underwriting other community initiatives. (Herron, Holland’s lawyer, described the company as “a lightning rod in this community” when he presented the defense of the case in the closed-door session Friday.) Partnership agreements between companies and governments aren’t unique, though pro-bono ones, like Coastal Cloud’s, tend to be more so. AdventHealth Palm Coast just entered into a lucrative partnership agreement with the school district. It would have been difficult to imagine that the district would have turned down the agreement with the county’s leading employer (after the district) even if one of its board members had somehow been tied to the health care giant. (None is.)
In a political environment where perception is the Achille’s heel even of the incorruptible, perceptions quickly coopted reality. Holland, whose strong personality, high-achieving compulsion and Clintonian political skills have been tripping up detractors since her days on the County Commission in 2006, became mired in a narrative neither she nor Coastal Cloud could control, no matter how hard–and at times inappropriately–they tried. For all the scurrilous claims, the fabrications and the lies that would nearly entomb Holland and the company in the months afterward, it is also unquestioned that both had unwittingly enabled the cabal by the original misjudgment, however innocent the intent and generous the goal. Every single one of the claims against Holland scabbed from her relationship with Coastal Cloud.
Yet for all the perceived claims of corruption, the actual claims themselves, as listed above, proved more petty than scandalous but for the steroidal effect of social media conjecture: the metamorphosis from gossip to allegations to exaggerated claims to lynch mob could be measured in the frequency of social media posts, often given a sheen of legitimacy by News-Journal reporting that, itself poorly sourced and often baseless, only echoed the social media chamber rather than offered original reporting based on documented fact.
At the start of it all was that Innovation Partnership Agreement between Palm Coast and Coastal Cloud. The company made no money directly. But it benefited from adding Palm Coast to its portfolio as one way to leverage its expertise with other potential governments. Since Palm Coast Connect was built on the powerful Salesforce platform. Coastal Cloud calls itself a “Platinum Partner” of Salesforce, but with no monetary benefit, according to Coastal Cloud co-Owner Tim Hale in an interview with the ethics commission investigator. The city meanwhile had to pay an annual licensing fee that started at $90,000 and has increased since.
Those interviewed by the investigator for the inquiry into the first allegation included Holland, Hale, City Attorney Bill Reischmann, former IT Director Don Kewley, Morton, former Compensation Analyst Laura Bukolt, Council member Nick Klufas, and former Council member Bob Cuff. Inexplicably, Landon the investigator did not interview Landon. The report doesn’t indicate whether Landon was contacted and declined.
“Mr. Hale confirmed,” according to the investigative report, “that in September 2018, Coastal Cloud entered into a pro bono contract with the City of Palm Coast. He said Coastal Cloud was approached by previous City Manager, Jim Landon, about creating more technology jobs in the City. Being unfamiliar with the City and County technology systems, Mr. Hale stated, it was an opportunity for Coastal Cloud co-owner Sarah Hale, and himself, to become familiar with
governmental systems. He said this opportunity allowed Coastal Cloud to gain knowledge and understanding of how local governments operate. Mr. Hale stated the City agreed to allow Coastal Cloud to observe their operations and processes by shadowing employees, and in return, Coastal Cloud donated their services and implemented a 311 customer based software system allowing the City to operate more efficiently.”
Klufas and Cuff told the investigator they’d studied the Coastal Cloud contract, with Cuff–an attorney–specifically investigating administrative details and questioning staff to ensure that no money would change hands between the city and the company. Cuff told the investigator he was not aware of Holland promoting Coastal Cloud. The relationship between Palm Coast and Salesforce was separate.
The city executed its agreement with Coastal Cloud in September 2018. Hale told the investigator that “this allowed the Company to market and attract other forms of government in various business settings. In turm, he explained, this allowed Coastal Cloud to advance in creating more jobs in Palm Coast, which was the ultimate goal.” By 2020, Coastal Cloud had pulled out of the agreement, having trained city staff to run the system. Coastal Cloud has not been involved with the city since.
Based on all those findings, the allegation of a conflict of interest between Holland and Coastal Cloud’s involvement was dismissed.
The emails using Holland’s signature as mayor were another matter. She’d sent three. On Jan. 29, 2018, she sent one to Sherry Gutch, the Business Development Division Manager for the City of Orlando, that was more of a get-me-in-touch sort of query: Holland wanted to know who to reach at IT. Three days later she wrote Rosa Akhtarkhavari, Orlando’s IT director, requesting a meeting, and wrote that “Along with being Mayor, I am also the Director of Business Development for Coastal Cloud, a company that is Headquartered in my City.” Holland “wanted to reach out to you to set up a call to discuss what we do from a technology perspective and our services that offer the goals and objectives set forth to create efficiencies and a more robust citizen engagement platform.” In other words, replicate the Palm Coast Connect platform. The third email was just a forward of the second, which had gone to the wrong person.
“One might be a mistake. Three starts to become intentional,” the ethics commission advocate argued before the commission Friday, though in fact all three were related to the same thread, and two of them had been addressed to the wrong person.
The contact never went anywhere: Akhtarkhavari told the investigator she ignored it as just another sales pitch, and the director of innovation told Holland he was not interested. What meeting Gutch had set up with Holland involved a Conference of Mayors matter, which directly related to Holland’s work with Palm Coast. Gutch “does not recall the [Holland] discussing Salesforce nor Coastal Cloud during the meeting,” she told the investigator.
Holland herself told the investigator that “this was only a few emails out of thousands of City-related emails she has sent using her City email account,” according to the investigative report. Holland “explained her signature in the email automatically populated and she denied physically typing her information as Mayor, prior to sending the email.”
There was the claim that Holland and Hale directed the administration to ignore the so-called “Gartner Study,” an analysis by Gartner Resources–but whose powerpoint presentation was ostensibly the work of city staff–about various approaches to creating a customer-service platform. The study, according to the powerpoint, listed various options. (The city never produced an original Gartner report when requested.)
Regarding the Hackathon, a weekend technology competition hosted by the city in early 2020, Wynn Newingham, its organizer and then-chief of innovation for the city (she resigned before the event took place), told the investigator that Morton ordered her to “Get the Hackathon done the way the Mayor wants it,” through a Salesforce platform, with Holland described as deeply immersed in vetting the plans. Holland said she was immersed in caring for her ailing daughter and not involved.
Schottey, who was still employed at the time and had a lead role in the Hackathon, told the investigator Holland was “not involved in the six months of planning for the Hackathon, but he felt like the event became a ‘Mayor Holland Event,’ because two days before the event, [Holland] rearranged the speaking order, to make Mr. Hale and herself appear more important,” while requesting that Coastal Cloud personnel be treated like VIPs, with more exposure than other sponsors got. (Such maneuvering, positioning and toadying is not uncommon at all levels of government and business interactions.)
“Advocating that your employer get better sponsorship for those things do not necessarily mean that they are in conflict with the public’s interest, do they?” Ethics Commissioner Antonio Carvajal asked the advocate. “What was the public interest that was compromised?” The advocate said it was “not fair to the other sponsors.” Carvajal wasn’t convinced. “That doesn’t automatically create a recurring conflict,” he said, making an analogy with public servants who have other jobs. Hadley did not contest the point. That carried the day against adopting the advocate’s recommendation on a second probable cause finding.
As for the letters of recommendation written on behalf of the Hale children, the investigation found that such letters have been nearly routine, whether bearing Holland’s signature or that of Jon Netts and Jim Canfield, the former mayors (Netts wrote one for the daughter of the FlaglerLive editor in 2012). The letters, staffers told the investigator, are routinely drafted by city staff.