Our Mayor, the Lobbyist

The timing of the SAIL application is also highly suspicious. Pinnacle didn't list the extra $1.2 million in additional bond money it was about to receive from the county. This was crucial, since the state determines who gets SAIL money according to need and how much bond money they are already getting. The state places applicants in an "A" category, which almost assures they will be awarded the money, or a "B" category, where their chances are greatly diminished. According to the state formula, Pinnacle Village qualified as an A because the additional bond money wasn't included. Had it been listed, Pinnacle Village would have been relegated to the B list, jeopar-dizing the funds. Since then, HFA has notified the state of the additional financing, but the company's A ranking hasn't changed. "Our rules don't say anything about bonds coming in after the fact, but maybe there should be something in there about it," says state regulator Chris Buswell, the FHFC's credit administrator. "Maybe there is a hole that needs to be plugged there."

After reviewing the numbers, Barot, the rival developer, concludes: "This is unethical, in my opinion," he says. "Two different sets of numbers are submitted at about the same time, and they totally change."

When asked about the applications, Wohl declined to comment. "These are very sophisticated financing schemes," he said. "I'm not going to answer ... I don't want to talk about numbers."

But Pinnacle vice president David Deutch, the company's numbers guru, denied that his company deceived the state in the SAIL application, adding that his firm "would never trick, mislead, or do anything disingenuous." He says the $16.6 million development cost didn't include estimated construction increases because the contract hadn't been completed. And he contends the company only applied for the SAIL loan to provide "gap financing" should some part of the deal fall through.

Deutch acknowledges that the company, at one time, was holding back tax credits from the deal, but he points out that it has since decided to sell all of them and put the proceeds toward the project. According to numerous experts and state regulators, the idea of a developer keeping tax credits is highly unusual, especially since the Internal Revenue Service dictates that developers are only allowed to receive as many credits as are "necessary" to make the project feasible. Keeping credits, after all, would seem to enrich the developer rather than the development.

The Pinnacle vice president points out that the state hasn't yet allocated the SAIL money or the tax credits, and, even if his company had put false information in any state application, regulators would discover it. "If we were to put something ridiculous in an application, like it's only going to cost $20, the state has an underwriting process to ensure we don't get anything we don't need," Deutch says.

Any company found to have misled the Florida HFC, however, is subject not only to perjury laws, but also to being barred from receiving state money for two years. "We ensure that a deal doesn't get more public resources than it absolutely needs," says FHFC deputy director Steve Auger. "Our process is set up to make sure that developers do not get more money than is needed to do the deal."

Lieberman says she knew nothing about the two million dollar SAIL loan application, the apparent overfunding of the project with public money, the tax credits, or the contradictory information provided to the state and county. "I have not seen these documents, and I have no knowledge of them," the mayor said.

While a politician always takes risks in taking a paycheck from a developer, her explanation seems reasonable, since her work for the company is centered on helping it develop new business rather than formulating deals. But there remain serious questions about Lieberman's employment with Pinnacle. By recusing herself from Pinnacle-related matters while on the dais, Lieberman has meticulously avoided illegal voting conflicts. And she cites her self-styled 40-abstention rule to exonerate herself from having frequently occurring conflicts. But that is news to Williams, the ethics commission's executive director. And it evokes a laugh from Eric Rad, the treasurer for the government watchdog group Common Cause. "Where did she come up with that one?" says Rad, who lives in Plantation. "It seems like to me that one [abstention] is enough. It certainly doesn't seem right."

The mayor also insists that Pinnacle, though some of its projects may be audited and inspected by Broward County, isn't technically "regulated" by her governmental agency. In full Michelson mode, she argues that the Pinnacle Housing Group, which hired her, is distinct, in the eyes of the law, from the limited partnerships it forms to operate each of its projects, even though they are run by the same people and involve projects for which she lobbied. "If you look at case law and see where they've defined 'regulate,' [Pinnacle] doesn't fall under that category," she says. "Pinnacle builds throughout the State of Florida. It has its occupational license in Miami-Dade."

Such legal technicalities are argued ad infinitum at the ethics commission, which, it is true, often sides with politicians. And Graber says there are few who know the law as well as Lieberman. "She had a lot of cases against her when she was mayor of Lauderhill, and I believe she won every one of them," he says. "That probably made her an expert."