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In 1994, Marilyn J. Parker paid Coral Gables, Fla., lawyer-lobbyist Roman M. Lannes 15 percent of the initial $600,000 no-bid government contract he helped secure for her company, Engineering and Construction Services of Miami. The contract was to provide computer simulation programs for the renovation of Miami International Airport. Years later, this method of paying Lannes, known as a success fee contract, drew the ire of U.S. District Judge Adalberto Jordan. This past April, during the bribery and tax-evasion sentencing hearing of former airport construction chief Ricardo Mendez, Judge Jordan mocked Parker’s contention that she had no idea Lannes was referring to bribery when Lannes said he needed the sizable fee “to take care of some people.” Jordan sentenced Mendez to four years in prison for accepting $340,000 in kickbacks. Parker, whose company eventually did $1.5 million of work under the extended contract, struck a deal to serve as a government witness during the trial. She pleaded guilty to bribery-related charges and was sentenced to three years probation. Lannes died in 1999. Prompted by this and other political corruption cases, the Miami-Dade County Commission in May prohibited county contractors from paying lobbyists success fees — and barred lobbyists from accepting such fees based on their winning a government contract or approval. Such contingency fee contracts long have been common. The commission’s action is the latest in a recent crackdown on lobbyist behavior by local governments in South Florida. It’s a sign that elected officials are growing increasingly sensitive about accusations of succumbing to the influence of lobbyists — who typically are major campaign fund-raisers for the politicians they lobby. A number of government bodies, including the Florida Legislature, the Palm Beach County Commission and the Miami Beach City Commission, already have enacted measures to prohibit or restrict lobbyists — including both lawyers and nonlawyers — from accepting fees which are contingent on lobbying success. The Miami-Dade County School Board gave preliminary approval last month to a success fee ban; the board will take a final vote next month. A member of the Broward County Commission in Fort Lauderdale said he plans to propose such a ban. Typically, success fee bans are proposed in conjunction with proposals for greater disclosure of lobbying activities and fees. A success fee is some form of compensation contingent on passage, defeat or modification of government rules or decisions. This ranges from a change in an ordinance or zoning classification to influencing a government contract award. Proponents of banning success fees for lobbyists contend that such payment arrangements increase the costs to taxpayers for government contracts and services, and heighten the risk of corruption by creating powerful financial incentives for lobbyists to bribe elected officials. Success fee arrangements, some say, put ethical stress on elected officials, who may find it hard to say no to a lobbyist who has raised campaign contributions for them or to whom they otherwise feel they owe a favor. Success fees “create behavior in the targets and elected officials which is almost desperate,” said Ben Graber, a Broward County Commission member and medical doctor who formerly served as deputy majority leader in the Florida House. “You tell [a lobbyist] that he’ll get $25,000 if he gets you a contract and nothing if he doesn’t, and he’ll do everything possible to get you the contract, including operating in the gray area of the law.” But a number of experts say that while such bans sound like effective good-government reforms, they are difficult or impossible to enforce and may discriminate against smaller businesses and interest groups which can’t necessarily afford to hire top-notch lobbyists on an upfront fee or retainer basis. In addition, there are a variety of ways to structure payments to reward success without running afoul of state and local laws, they say. Lobbyists deny that success fees result in higher costs to taxpayers, particularly because government contracting increasingly is done through bidding rather than through the more subjective request for proposal process. They argue that awarding contracts through a bid process has a built-in protection, so it doesn’t matter how the lobbyist is paid. “If you’re the low bidder, you’re the low bidder,” said Coral Gables lawyer-lobbyist Courtney Cunningham. Florida’s state-level success fee ban “has interfered with the ability of a number of institutions to be properly represented before the Legislature and Executive branches,” said Fred W. Baggett, Tallahassee-based head of Greenberg Traurig’s national government practice group. Opponents of bans on success fees and tougher lobbyist disclosure rules are fighting back in court. Fort Lauderdale appellate attorney Bruce S. Rogow is representing Miami lobbyist Rodney Barreto in a First Amendment lawsuit challenging the constitutionality of Miami Beach’s lobbyist disclosure regulations. Rogow said the city’s ban on success fees — though not cited in the suit — “cuts against the grain of American capitalism” by impairing the freedom to contract out services as one wishes. Despite the mounting debate over success fees in some chambers of government, other elected officials seem unconcerned. “The last thing I am going to worry about is whether or not someone is going to make money or not make money,” said longtime Hollywood, Fla., Mayor Mara Giulianti. “I don’t want to know and it should not influence my decision at all.” The irony of bans on success fees is that they represent public officials’ lack of confidence in their own integrity, Rogow said: “Underneath this reaction to success fees, I think, is public officials’ fear of their own inability to say no. If public officials are honest, they should have no fear of success fees.” OK UNDER BAR RULES As with contingency fees for plaintiff lawyers in litigation, success fees have been around for a long time. It’s impossible to say for certain how commonly they are used in Florida lobbying, because rules around the state requiring lobbyists to disclose their fees and fee arrangements are rare. Lawyer-lobbyists say disclosing their fees would violate attorney-client confidentiality. But prominent lobbyists in Florida, both lawyers and nonlawyers, say success fee arrangements are not uncommon, though they are reluctant to specifically discuss their own practices. Lobbyists say they bill in different ways for different clients. Many charge hourly fees or flat retainers. But they sometimes bill a client a percentage of an awarded contract’s value. Another form of success fee is to charge a flat amount based on an estimate of the value of successful representation. A variation is accepting part ownership of a client’s business as payment for success in influencing a government procurement decision. Under the Rules Regulating the Florida Bar, success fees are considered an ethical form of payment for lawyer-lobbyists. In tort cases, an attorney may charge roughly 30 percent of an award, based on a scale included in the Bar rules. Under Rule 4-1.5 (a) of the Bar rules, attorneys are prohibited from charging “an illegal, prohibited or clearly excessive fee.” But Lili Quintiliani, assistant ethics counsel for the Florida Bar, said that for some types of work, attorneys may charge much more than 30 percent without risking an ethics violation. For lobbying services, she said, as long as a contingency fee isn’t “illegal, prohibited or clearly excessive,” there’s no fixed limit in Bar rules on what an attorney may charge. Quintiliani said she’s not aware of any Bar disciplinary action taken against a lawyer-lobbyist in Florida over the excessive size of a success fee. While lawyer-lobbyists must comply with Bar ethics rules — however loosely defined — lobbyists who are not lawyers have no such disciplinary framework. That’s a concern voiced by many supporters of success fee bans. But Rogow said potential criminal prosecution effectively deters misconduct by nonlawyer lobbyists. Stanley B. Price, a partner at Bilzin Sumberg Baena Price & Axelrod in Miami who heads the governmental law practice there, contends that lawyers may be entitled to a higher percentage fee for a lobbying success than for a success in a tort case. That’s because a favorable rezoning decision, for example, can increase a client’s property value by a factor of 100, he said. While the size of success fees is seldom publicly reported, occasionally the details of big success fees emerge. And when they do, they tend to raise public concerns about what lobbyists are doing to justify such big fees. In 2001, lobbyist Eric Sisser and a team of consultants received a fee of about $1 million a year for the life of a four-year, nine-figure health insurance contract awarded by the Miami-Dade County School Board to HIP Health Plan of Florida. Earlier this year, in a contract lawsuit in Broward Circuit Court, it was disclosed that Gus Boulis, the late gambling, hotel and restaurant tycoon, had agreed to pay the Hollywood law firm Becker & Poliakoff and its shareholder Bernie Friedman a $50,000 lobbying success fee. The fee was for the firm’s success in winning approval from the Hollywood City Commission in 1997 for Boulis’ controversial deal to build the luxury Diamond on the Beach hotel on city-owned land. The disclosure of that success fee deal shocked some Hollywood officials and city attorneys because Becker & Poliakoff and Friedman also serve as the city’s official lobbyists in Tallahassee. Friedman has long served as a campaign consultant and fund-raiser for Mayor Giulianti and several other Hollywood city commissioners. In another recent Miami-Dade case, a public records lawsuit filed by the Miami Herald revealed that South Florida lobbyists such as Rodney Barreto, Eli Feinberg and Miami attorney Chris Korge — who helped secure a major Miami International Airport contract for Dade Aviation Consultants — were receiving thousands of dollars a month from Dade Aviation for “services rendered” for the life of the contract. “I don’t have a problem with a contingency fee that is reasonably related to the value of service provided,” said Steel Hector & Davis partner Alvin Davis, who represented the Herald. But “those lobbyists are plugged into that contract every year for as long as the contract exists.” SHARING RISK Florida law firms that offer lobbying services say that because of state rules, they don’t accept success fees for lobbying the state government. But some say they do use success fee agreements in jurisdictions where such deals are permitted, with clients who desire this type of arrangement. “It’s for a client who is not willing to pay out full fees if they’re unsuccessful,” said Bilzin Sumberg’s Price. “They want you to get into the boat and take some of the risk with them, and, if they’re successful, they’re going to pay you in excess of what your hourly fees were going to be.” Price said his firm doesn’t accept success fee deals because Florida case law discourages it. Greenberg Traurig’s Baggett, whose group handles Greenberg’s federal, state and local government lobbying around the country, said his firm often lobbies on a success fee basis in jurisdictions where the practice is permitted. The size of a reasonable success fee, he said, must be based on the value of the success to the client. “What’s it worth to you if my best efforts are successful?” he asked. Becker & Poliakoff sometimes does lobbying for clients under success fee contracts, said Alan S. Becker, a founding shareholder at the firm. While success fees are not that common, he said, they are a useful option, particularly for small clients. “The giant companies don’t like paying success fees,” he said. “They have trouble with the concept. They’re just not used to it.” Becker scoffs at efforts to ban success fees, noting that contingency fees are not generally considered corrupting for plaintiff lawyers in personal injury cases. “What’s the distinction?” he asked. At Steel Hector, the general policy is not to use success fees, Davis said. If one of the firm’s lawyers felt that circumstances warranted an exception, he or she would have to get approval from the firm’s governing board. Davis, who’s on the board, said he can’t recall the board ever granting such permission. At other prominent firms, it’s up to the individual lawyer-lobbyist. Susan Delegal, a partner in land-use and real estate law at Holland & Knight in Fort Lauderdale, said she bills on an hourly basis and chooses to stay clear of success fee deals. “I would prefer just to charge based on what I’m doing for my services, as opposed to leaving any client or government entity to conclude there’s something beyond that, from an appearance standpoint,” she said. AGAINST PUBLIC POLICY Despite the Bar’s acceptance of success fees for lawyer-lobbyists, the state’s 3rd District Court of Appeal in Miami has ruled that such contracts for lobbyists — both lawyers and nonlawyers — are unenforceable. In the early 1990s, the city of Hialeah Gardens hired John L. Adams & Co. to lobby state agencies for funding for a road-widening project. Adams’ contract called for him to be paid on an hourly basis for his time; he also was to receive 2 percent of the project funding awarded to the city, due upon notice of funding approval. But the project ultimately was carried out directly by the Florida Department of Transportation rather than by the city, which received no grants for the work. The city paid Adams’ hourly fee but not the success fee. Adams filed a breach of contract suit in Miami-Dade Circuit Court, claiming that the city owed him $28,000 in success fees; a judge found in his favor. In 1992, in City of Hialeah Gardens v. John L. Adams & Co., the 3rd DCA reversed the trial court. It held that contingency contracts calling for lobbyists to seek government agency favors were contrary to public policy and therefore unenforceable in any dispute between the client and lobbyist. In Adams, the 3rd DCA cited a 1946 Florida Supreme Court case, Wechsler v. Novak, which declared that success fees for lobbyists are contrary to public policy. “Many courts hold such agreements invalid on the theory of their tendency to introduce corrupt means in the influencing of public officials, and especially is it true in those cases where compensation is contingent on success,” the Supreme Court said. Saying that success fee contracts are unenforceable is different from saying they’re illegal. But some elected officials have pushed to outlaw them. In 1993, the Florida Legislature prohibited lobbyists from accepting success fees related to state legislative or executive matters, with the exception of claims bills; violations are considered first-degree criminal misdemeanors. Before that, the Legislature imposed a statewide ban on success fees for government procurement of architectural engineering, landscape architectural or surveying and mapping services. The 1993 measure was prompted by a series of scandals, including the Hialeah Gardens case, which involved one public agency using taxpayers’ money to hire a lobbyist to pry loose funding from another public agency, said Nancy Linnan, co-chair of Carlton Fields’ statewide government law and consulting group in Tallahassee. The Florida Commission on Ethics is charged with enforcing the executive branch success fee ban. But Christopher Anderson, staff attorney at the Ethics Commission, Robert Sparks, director of external affairs in the Florida attorney general’s office, and Ken Plante, president of the Florida Association of Professional Lobbyists, all say they can recall no cases in which lobbyists have been accused of or disciplined for success fee violations. Plante said the success fee ban largely has been a nonissue. Though some lobbyists say they’ve lost clients because of the ban, there are easy ways to legally circumvent it. “You and I could probably come up with a dozen ways you could get around the thing,” he said. In May of last year, the Miami Beach City Commission, whose chambers often are brimming with lobbyists, banned success fees for lobbyists. Mayor David Dermer said the measure was not prompted by any particular incident but rather was part of an ongoing effort to strengthen ethics rules. In recent years, Miami Beach also has required disclosure of lobbyist fees and made it illegal for lobbyists to give or solicit money for political campaigns. Dermer said the ethics rules have been effective. One result has been to reduce the amount of money raised by candidates for the upcoming city commission election. “Is it a cure-all? No,” he said. “But it’s a lot better than throwing your hands up in the air and saying you can’t do anything as a local government.” But the Miami Beach lobbyist disclosure rules are being challenged by attorney Bruce Rogow on behalf of lobbyist Rodney Barreto in a First Amendment lawsuit against the city. “It’s not the government’s business to know how much is being paid to lobbyists or lawyer-lobbyists,” Rogow said. “It’s especially difficult to lawyer-lobbyists, because of lawyer-client privilege.” The Palm Beach County Commission addressed the issue long before Miami Beach did. More than a decade ago, it prohibited success fees for lobbying on contracts awarded through the request for proposal process. The ban does not cover lobbying related to contracts put out for bid. The county’s success fee ban was invoked earlier this year. Centex-Rooney Construction — the losing bidder on a $40 million county contract to build a county government annex near West Palm Beach – complained that winning bidder Catalfumo Construction had given its lobbyists contracts that appeared to pay bonuses if Catalfumo won the job. But County Administrator Bob Weisman said the county investigated and found no illegal success fee arrangement. Other than that case, there have been no reported problems involving success fees for lobbyists, said Irwin Jacobowitz, the county director of contract development and control. Still, in May, the Palm Beach County Commission imposed additional controls on lobbyists. It required lobbyists to register with the county and banned improper communications by lobbyists with county commissioners and county staff. ‘ETHICS MIGHT SLIDE’ In Miami-Dade County, complaints about the pervasive role of lobbyists in government contracting and campaign fund-raising, particularly the Mendez-airport case, created momentum for the May enactment of the ordinance banning lobbyist success fees. The measure, sponsored by Commissioner Katy Sorenson, barred businesses and individuals from paying their lobbyists success fees, and barred lobbyists from accepting such fee deals for influencing county staffers and politicians. The county can punish violators by barring them from lobbying; a first offense would result in a 90-day suspension. The Miami-Dade state attorney has concurrent jurisdiction with the county, and can file criminal charges. In that case, a violation would be a first-degree misdemeanor, punishable by a maximum of 30 days in jail and a $500 fine. Sorenson’s original proposal called for greater disclosure by clients of all fees paid to lobbyists in pursuit of county contracts. To win commission approval for the success fee ban, however, Sorenson dropped the fee disclosure requirement, which was hotly opposed by lobbyists. Still, she hails the ordinance as an important step in boosting public confidence in county government. “Whenever you have somebody who’s going to get a real jackpot in exchange for winning a vote,” she said, “the ethics might slide.” Robert Meyers, the executive director of the Miami-Dade Commission on Ethics and Public Trust, calls Miami-Dade’s ban on success fees “a good first step” toward lobbyist reform. But he laments the failure of Sorenson’s fee disclosure proposal, which he considers critical to knowing the full role of lobbyists. “Without fee disclosure, we’re going to have a difficult time telling whether companies are paying success or contingency fees,” he said. “The only way will be to audit expense reports filed by contractors after a county contract is awarded. In Broward County, success fees for lobbyists became a hot issue in March, when the state attorney’s office revealed that it was investigating nearly $500,000 in payments made to lobbyists for their successful efforts to land Omaha, Neb.-based Election Systems & Software, a $17.2 million contract to supply the county with 5,200 iVotronic touch-screen voting machines. Those were the machines that were involved in last year’s election fiascos in both Broward and Miami-Dade counties. According to the South Florida Sun-Sentinel, the lobbyists receiving those payments included Russ Klenet of Fort Lauderdale, who snagged a $25,000 success fee, the Tallahassee lobbying firm Andrews Plus, which received a $90,000 success fee, and former Florida Secretary of State Sandra Mortham, who received a $172,000 success fee. ES&S chief operating officer Mike Limas explained the payments to the lobbyists by saying, “This was a new system and we needed professionals to explain it statewide.” But Broward County Commissioner Ben Graber sees it differently. He attributes the county’s debacle in acquiring the iVotronic machines at least partly to the success fees. “The behavior I saw during that situation reached a low in terms of pressure on people to make votes and cut corners and do things,” he said. The county currently has no regulations governing lobbying success fees. About a year and a half ago, the County Commission tightened disclosure requirements for lobbyists. But Graber said that’s not enough. He plans to propose an outright ban, citing the pernicious effects he saw while serving in the Legislature of strong financial incentives on lobbyists to win favors for their clients. “I’ve heard discussion by officials that, ‘We need to help this lobbyist out on this issue because he’s having financial trouble and this issue is a big one for him,’ ” Graber said. He particularly recalls the behavior of a lobbyist he worked with who was trying to get a claims bill passed so his client could collect an $8 million medical malpractice verdict against the public Broward General Medical Center in Fort Lauderdale. The lobbyist had a success fee deal to receive 10 percent of the full verdict, the collection of which depended on the Legislature passing the claims bill. The lobbyist’s behavior was “like a piranha,” Graber said. But Graber shouldn’t count on support from his fellow commissioners if and when he proposes his success fee ban. “I’m not so sure you can regulate all those things,” said longtime Broward Commissioner Lori Nance Parrish, who, like other members of the commission, receives heavy campaign fund-raising help from lobbyists. “I think it’s up to each individual’s integrity.” On the other hand, Broward Commissioner Ilene Lieberman, a lawyer who’s done lobbying and who’s married to a lawyer-lobbyist, unsuccessfully proposed a success fee ban a year and a half ago. Interestingly enough, one of those who opposed Lieberman’s measure was Graber. Graber now explains that he was new to the County Commission at the time and wasn’t yet convinced that a ban was needed at the local level. Now, he said, he is convinced. Last month, Miami-Dade County School Board Member Marta Perez, who’s running for county mayor, succeeded in convincing the board to give preliminary approval to a success fee ban for lobbyists. This past spring, she successfully sponsored regulations to make lobbyists’ activities more transparent through registration and disclosure requirements. Perez said her plan was to propose tighter rules for lobbyists one step at a time. By a vote of 5-4, the board passed on first reading her proposal to prohibit paying lobbyists success fees for winning school contracts. It also would require companies that lobby the school board or school administration to disclose how much they pay their lobbyists. The measure is scheduled to come up for a final vote next month. Some members, including Agustin Barrera, Solomon Stinson and Chairman Michael Krop, had reservations about requiring fees to be disclosed. “I’m not concerned with how much money a lobbyist makes,” Stinson said. But Perla Tabares Hantman sided with Perez, saying that, along with the perception of undue influence, success fees end up hurting taxpayers through higher contract costs. “Do we really believe that this is not being passed to us?” Hantman asked. Perez, who joined the School Board in 1998, said her fellow board members have found themselves so beleaguered by scandals that her proposed reforms are receiving a more favorable reception than in the past. She said the public is tired of questionable deals being pushed through by high-paid lobbyists. She cites Eric Sisser’s big success fee for winning the health insurance contract for HIP Health Plan as a reason that disclosure and success fee bans should be enacted. “Why do we care how much [lobbyists] are being paid?” she asks. “A million dollars is a hefty fee to pay just to have somebody’s influence. You know that’s being passed on to the public.” Sisser did not return calls for comment. LEGAL EVASION Even if everyone agreed that banning success fees for lobbyists is good public policy, one of the biggest questions is whether such prohibitions can actually be enforced. There’s nothing to stop a client from designing a payment scheme for a lobbyist that evades the ban but still financially rewards the lobbyist for success. For example, after the Florida Legislature banned success fees, clients and lobbyists started signing long-term retainer contracts, said Ron Book, a lawyer-lobbyist based near Miami in Aventura who’s considered one of the state’s most influential. Under that model, after the lobbyist wins a government approval or contract for a client, the client rewards the lobbyist by agreeing to pay for consulting services on the contract. Book expresses ambivalence about the state-level success fee ban. On the one hand, he said, “bad guys are always going to circumvent that law.” On the other hand, he said, there are legal ways to sidestep the law. For example, he said, a lobbyist can sign an agreement with a client that if the representation is successful, the client will hire the lobbyist in the future. “If you’re satisfied with your representation, you keep it,” Book said. “That’s the legitimate way to get around it.” He declined to say how he handles the issue, though he does say that “most” of his clients are long-term clients. Miguel De Grandy, a prominent Miami-based lobbyist and former state legislator, offers more specific instructions on how to get around the ban. Some lobbyists tell their clients, “I’m going to try to pass this regulatory provision or law for you,” he said. “If I pass it, you are going to need advice on interpretation of that statute, how it applies to you, you’re going to need potential advice in representation at the agency level, when they pass a rule to implement the statute. All that may entail a year or two of work.” “So you’re going to give me X amount upfront for my legislative work. But if we win, you’re going to hire me for the next year or two for X amount per month to help you through those issues.” That passes muster under state law, De Grandy said, because it’s not a success fee but rather an agreement to pay for future work. A veteran Tallahassee lawyer-lobbyist who did not want to be identified said another common way around the success fee ban is to have the client sign a monthly retainer contract which the client can cancel at will. “Session ends, desired bill doesn’t pass, client stops paying. Nothing illegal about that,” this lawyer-lobbyist said. But the Ethics Commission’s Robert Meyers argues that the practical difficulty of enforcing success fee bans is no reason not to pass them. “If it’s a good policy, you continue to pursue it and hopefully you’ll be able to get at those people trying to circumvent the law.” He said that ordinances can be fine-tuned over time to address the enforcement challenges. Bruce Rogow calls success fees a “classic American way of doing business. It encourages effort. You reward somebody for a job well done. If you call it a bonus or a success fee, there’s nothing inherently bad about it.” But Meyers said there’s a big difference between paying a contingency fee to a lawyer to sway a judge or jury in a personal injury case and paying such a fee to a lobbyist for successfully influencing a city or county commission to grant a contract or approval. Contingency fees in civil cases are acceptable because they enable people of lesser financial means to exercise their right of access to the justice system, Meyers said. “Do you have a right to a government contract?” he asks. “I’m not sure you do.” Success fees, he contends, are a losing proposition for the public. “There has to be some standard that said, ‘This is what a reasonable fee would be,’ ” he said. “ Absent that standard, it’s all or nothing for lobbyists who work on a success fee basis, and that’s a formula for influence-peddling and corruption.” Still, no one argues that success fee bans alone are going to eliminate the risks of ethics violations and corruption inherent in the interplay between lobbyists and lawmakers. “Every aspect of trying to regulate good faith behavior is filled with loopholes and unintended consequences,” said Leonard Berger, an assistant county attorney for Palm Beach County. ” ‘Be good’ is really not a simple command.”

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