The Stierheim Report

An old pro is recruited to undertake a very disagreeable mission: Dig into the stinking mess at Miami City Hall. Here's what he found.

On August 30, a career bureaucrat named Manohar Surana abruptly retired as finance director of the City of Miami. Two weeks later some of his co-workers joined him in retirement -- involuntarily. The federal government filed charges against City Manager Cesar Odio for allegedly seeking a kickback on a city insurance contract. Similar charges were filed against City Commissioner Miller Dawkins for profiting from a city computer contract. Two county officials have been linked to the ongoing probe, along with a prominent lobbyist and a former city manager.

Although the investigation continues, the impact of what the FBI calls Operation Greenpalm has already been devastating. Surana reportedly agreed to plead guilty to corruption charges. Dawkins pleaded guilty and was removed from office. Odio retired to concentrate on his legal defense.

The scandal was the best thing to happen to the City of Miami in a long time.

Foremost among the benefits was Odio's quickly being replaced by a man with superb managerial experience, unquestioned ethics, and a master's degree in governmental administration from the Wharton School. In Merrett Stierheim's brief tenure as interim manager, he has peeled back layers of deception to reveal a city government that has been grossly mismanaged. If he hadn't stepped into the breach, he so much as says, Miami might have gone bankrupt within the year.

Stierheim, who is 63 years old, first worked for Miami in 1959 as an assistant city manager. Since then the city has transformed itself from a sleepy retirement town to an international business and trade capital. Stierheim's career has paralleled the city's upward trajectory. He rose to county manager in 1976, and served there for ten years. Today he is president and CEO of the Greater Miami Convention and Visitors Bureau. He agreed to return to city government on a strictly temporary basis, with the objective of keeping a steady hand on the tiller until commissioners could hire a permanent manager. After accepting a two-week contract extension, his final day at city hall will be Friday, November 15.

A mere steady hand was not what Miami needed, as Stierheim soon discovered. The city's 1996-1997 budget -- already passed on one reading and scheduled for final approval -- was not neatly balanced as Surana and Odio had reported. In fact it was at least $68 million in the red. Among many troubling revelations, Stierheim found that taxpayer money had been routinely spirited from one account to another to pay off current bills or to retire old debts.

His efforts to solve the crisis have generated controversy. He persuaded the commission to declare a fiscal emergency, which gave him the power to reopen the city's contracts with its four labor unions. In doing so, he aggravated union leaders, who had made significant concessions to Odio just a year earlier. When he blamed the crisis in part on bad management, some talk-show hosts on Spanish-language radio shot back that Stierheim was attacking not just Odio's management but the entire Cuban community. (Odio is a Cuban immigrant.)

Stierheim recently discussed that criticism and more in a wide-ranging interview. "I don't have time to do this, I really don't," he muttered while sitting down in one of two armchairs located in front of Cesar Odio's old desk. "But I promised, so let's get this done." Within minutes his impatience gave way to thoughtful engagement. Except for a brief interruption by Mayor Joe Carollo, who stopped in to confirm a later appointment, Stierheim spoke for a full hour.

Did you discover any other indications of the city squeezing vendors for bribes?

No. There were a couple of areas that didn't come to fruition that, if they had, would have been open to questions. I would have immediately turned them over to the appropriate authorities. I think there were very legitimate questions the mayor was raising when he asked for more of those expenditures from the $4500 discretionary fund. It was the first time I got into it, and I think there are some pretty serious questions. Those questions are still lingering.

In several instances, most notably the abuse of his discretionary fund, former city manager Cesar Odio claimed he was only following the orders of the commission. Indeed he had a reputation for indulging the commissioners, who were, after all, his bosses. The result of this -- the fiscal crisis -- raises the question of whether a manager form of government is practical in such a political city.

The city certainly can be managed by a mayor-commission-manager form of government. It is more challenging in Miami, obviously, because of the diversity and different constituency demands and so forth and so on. But the right professional manager, dealing with the elected officials that we have now, I think could function very well.

As chairman of the county's charter committee in the late Eighties, you supported the concept of a strong mayor. How does the county differ from the city?

I am not here telling you what form of government Miami should have. That's not my function. You asked me whether the manager plan could work here. My answer is without question: Yes. I don't want to be put in the position of recommending the form of government for Miami. I think the manager plan could work very well. Does that mean the strong-mayor form could not work? I didn't say that.

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