All the Governor's Men

Though Bush appointed all seven NBHD commissioners who voted for the building plan and has strong political ties to some district officials and lobbyists, he's managed so far to keep clear of the scandal, which last year led to the embezzlement conviction of former district CFO Patricia Mahaney. Sources close to the probe say that is about to change: A little-noticed veto by the governor played a crucial role in the medical office building saga, paving the way for Forman's deal.

To understand the connection, one must follow not only the money but the legislation. And all roads in this imbroglio lead to William Scherer, who, as the district's general counsel, oversees $5.5 million in NBHD legal work, $3 million of which goes to his law firm, Conrad and Scherer.

Scherer is not only the chief power at the district, where he controls several contracts and counsels board members on their votes, but he's also a close friend and business partner of Forman and his wealthy and influential father, Hamilton Forman, who lorded over the district for three decades as NBHD chairman. It was the man called "Ham" who took Scherer under his wing when the lawyer first moved to South Florida in 1972 from his native Indiana. The senior Forman gave Scherer entrée into the heavy-hitting world of Broward County development and landed him his position at the district in 1988.

Scherer is also one of Bush's chief political supporters. He's personally raised hundreds of thousands of dollars for both the governor and his brother, the president, and worked on campaigns for both Bushes. Scherer even serves as a Jeb Bush appointee on the state Judicial Nominating Commission.

A gregarious man prone to audacious statement, Scherer is a triple threat -- a lawyer, lobbyist, and developer, who controls more than $10 million in land held in trusts. But when questioned about the veto after last week's board meeting, he was silent, refusing to make any comment on the matter.

Like the district, he's part public, part private, all political. The NBHD prides itself on running like a corporation, downplaying its reliance on the $174 million in property taxes and more than $200 million in Medicaid and Medicare dollars it will collect this year. But it's more a classic political machine. New Times investigated three district deals -- the Forman agreement and two lucrative doctors' contracts -- that provide a close view of district business, which is rife with inflated compensation, possible violation of federal laws, and rampant cronyism.

First, the deal that involved the governor's veto pen:

Back in 1999, the district decided to put a new medical office building on SE Third Avenue, just east of Broward General Medical Center, its flagship Fort Lauderdale hospital. The only problem: The location was occupied by 14 homes and businesses. So the district set out to acquire them and by early 2000 had bought seven. The remaining landowners, however, held out for exorbitant prices -- at least $2 million more than NBHD was willing to pay. Facing a stalemate, administrators turned to Tallahassee.

Enter Scherer, who began a legislative effort to win "quick-take" rights for the district, wherein it could gain ownership of the properties and let a jury decide a fair price later. NBHD lobbyist Ron Book also played a key role in the legislation but says he obtained his orders from Scherer's office.

"Bill spoke to the governor about the quick-take," explains Nico Winningham, who was then the real estate manager for the district. "All along, he was the tie to Jeb."

The ensuing bill sailed unanimously through the House and overwhelmingly passed the Senate. Then came Bush's surprise veto on June 7, 2000. "The governor told Bill before the veto that it was going to happen," says Winningham, who was laid off with 42 other district employees in November 2002 and now works for a real estate company owned by the son of U.S. Rep. Clay Shaw (R-Fort Lauderdale). "I heard that Bill said afterward that he wasn't going to expend any more of his political capital on the matter."

Bush explained in a 2000 letter to then-Secretary of State Katherine Harris that his veto came in defense of private property rights and argued that the district could use regular eminent domain to obtain the properties. He said expanding the district's power to take the properties wasn't in the "spirit of fair play."

So the district, after expending months and more than $2 million on Third Avenue, turned west, to Andrews Avenue, the second-ranked location. As Winningham puts it, "The veto was huge -- it changed the site rankings."

And that paved the way for Austin Forman, whose family supports Bush and has contributed at least $15,000 to the GOP and the governor's campaigns. According to FBI reports, Forman's real estate partner, William Murphy, had behind-the-scenes talks with then-district CFO Mahaney about putting the medical office building on Andrews Avenue. After the veto, Forman and Murphy optioned the land and orchestrated a deal with NBHD that will pay them and downtown developer Terry Stiles $170 million over 55 years to construct the building. That represents roughly a $100 million profit for the trio. The Bush-appointed board approved the deal without taking bids in 2002.

"It was an unusual move by the governor," says Fort Lauderdale attorney Bruce Lyons, who is representing a grand jury witness he declines to identify. "Why would the governor veto that, especially when you look at the value of a small amount of homeowners versus the quality of medicine and health care in Broward County? It is definitely unusual."

And Scherer's involvement raises more critical questions: Why would he step outside his usual duties as the district's lawyer to do a job that should have been handled solely by NBHD lobbyists? And having done that, why would the general counsel, who has the governor's ear, shepherd a bill through the legislature that Bush was going to veto? Was the governor really making a rare and uncharacteristic stand for the little guy against his rich and powerful supporters at the district? Or did someone engineer a late-stage veto to facilitate Forman's deal?

It also isn't clear whether James Blosser's governmental consulting firm had a role in the veto. Blosser is a business associate of Scherer's and a top-tier supporter of the governor and the president. The district pays his firm, Poole, McKinley, and Blosser, $72,000 a year to lobby the governor and legislature in Tallahassee. According to one high-level source who asked that his name not be used, Bush made his veto based on a recommendation from Brian Yablonski, who was then the governor's deputy chief of staff. Yablonski, who didn't return calls for comment, now works as a partner in Blosser's firm, as does the governor's former spokesman, Justin Sayfie.

The recently convened grand jury may have to use all of its considerable powers to answer questions about the veto. Bush's press office didn't return repeated phone calls.

The office building deal is only the beginning. Next stop in understanding the district is Sein Lwin, a surgeon who is close to the general counsel. Very close, in fact -- he lives next door to Scherer's newly renovated, palatial home in the exclusive Fort Lauderdale neighborhood of Rio Vista.

Lwin is where politics, money, and medicine meet -- and taxpayers and patients seem to be forgotten.

Upon first meeting Sein Lwin (pronounced "sin le-WIN"), it's hard to imagine that the slight, five-foot-six, orthopedic surgeon could be a significant political force. The 64-year-old native of Burma has a white doctor's coat and a friendly smile and speaks English with a thick accent. He's personable, though hardly charismatic.

But his unassuming manner shouldn't fool anyone; Lwin is indisputably a political animal. He controls a veritable monopoly on orthopedic care in Broward General's emergency room. The district pays $1.7 million a year to Lwin's firm, North Broward Orthopedic Associates, to provide that care.

To win the contract, Lwin needed the right contacts. He has long been a fixture at political fundraisers and regularly attends monthly district board meetings. "Lwin begins to inculcate commissioners even before the governor appoints them," says Dr. Deepak Kapila, a former partner of Lwin's who is now vice chief of surgery at Broward General. "He develops the contacts at a very early stage."