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Sharpstein also danced around the embarrassing revelations. Contrary to his private remarks made during the sidebar conference, he now claimed not to know what type of "program" Richey and prosecutors were talking about. "Maybe they were talking about anger control," Sharpstein said jokingly.
(Gersten's chief of staff, Mike Powers, said the commissioner would consider offering comment for this story only on condition that New Times reveal the identity of any unnamed sources. New Times rejected the offeer. "I'm at a loss to understand what the State Attorney wants from me."
A Joe Gersten, 1/14/93, shortly after the hearing before Judge Dean regardless of the fact that few people who know Joe Gersten would believe he is truly baffled by prosecutors' interest in his activities, a veiled reference to that interest cropped up during the Janurary 14 hearing in Judge Dean's courtroom.
Assistant State Attorney Gregorie testified that during the May 21 meeting with Gersten lawyer William Richey, prosecutors told him that as part of any plea bargain, investigators would want Gersten to provide a sworn statement regarding not just the crackhouse allegations but also "as to a number of other incidents that we thought needed to be cleared up."
Defense attorney Sharpstein also hinted at this during the private conference with Judge Dean. "We brought [Richey] in here with the understanding of what was said at that meeting, and there were certain parameters we had hoped wouldn't come out," Sharpstein said. " ...There are other areas that came out about desires the State Attorney had for Mr. Gersten cooperating and all of this."
"We won't get into it," prosecutor Shiffrin reassured him.
The topic that Gersten's attorney was afraid would become public: an investigation into county bond dealing.
New Times has confirmed that not long after the May 21, 1992 meeting, a second meeting took place among Gregorie, Havens, and Richey A this time in State Attorney Janet Reno's office. During that June 8 conclave, according to sources familiar with the details, Reno repeated that if Gersten wanted to make a deal regarding the crackhouse case, he would have to provide a complete and truthful statement about what happened. But in addition, Reno told Richey that Gersten would be questioned, under oath, about allegations of corrupt county bond dealing. (Three months after this meeting, Gregorie was temporarily assigned to the U.S. Attorney's Office, where he has been working with the federal grand jury investigating airport operations and county bond deals.)
Bonds worth tens of millions of dollars are offered for sale by Dade County in order to finance major civic projects, most involving construction such as the Metrorail or airport parking structures. To accomplish such sales, the county hires financial advisors, attorneys, and underwriters to market the bonds, then repays the purchasers, with interest, over an extended period of time. Gersten's appointment as chairman of the Metro Commission's finance committee put him in a position to exert substantial influence over this process.
On February 22, 1989, just a few weeks after taking charge of the committee, Gersten voted to include his best friend in the first three bond deals that came before his finance committee. Charles Citrin, a lobbyist who worked for PaineWebber, was Gersten's chief fundraiser in his successful 1988 county commission campaign, responsible for collecting thousands of dollars in contributions for Gersten from Wall Street bankers and investment firms.
The two men have been friends since high school, and Gersten is godfather to one of Citrin's daughters. But Gersten and Citrin have denied that their friendship played any role in PaineWebber's sudden good fortune.
The underwriting firm had done no bond business with the county in the years preceding Gersten's election to the commission. But shortly after Gersten took a seat on the board, PaineWebber hired Citrin to lobby before the county. The results were highly profitable. In 1989 PaineWebber earned more than one million dollars in fees for its bond work A more than double the amount earned by any other firm that year.
This past summer New Times contacted Citrin to ask him about his relationship with Gersten and whether he was aware of state and federal investigations into the county's bond-dealing practices. Citrin seemed stunned. "I have no knowledge of it. None. It comes as a surprise," he said at the time. "I never characterized Joe as my best friend. The [Miami Herald] characterized him as my best friend. We've had some recent personal disagreements but I don't want to go into any of the details. It has nothing to do with the bond business."
Gersten argues he has opened county bond dealing to include more underwriters than ever before, including minority-owned firms. His long-time friend, lobbyist Stuart Rose, says the federal scrutiny could ultimately vindicate Gersten. "They are going to see a bond business that has been expanded tenfold since he's taken over," Rose contends.
Increasing the number of participants in bond deals, however, can be deceptive. A more revealing picture is provided by inspecting the revenue those firms earned. The county could have tripled the number of firms participating, for example, but each of those newly included companies could be earning only a fraction of the total fees and profits, while a select few firms continue to dominate A perhaps as a result of preferential treatment.