Deep Inside the Scandal

Howard Gary discusses OPERATION GREENPALM, the ambitious corruption investigation rattled by mismanagement and blown apart by astonishing leaks of secret information

Howard Gary couldn't believe what was happening. Here it was the second day of July, the middle of a glorious summer, a summer in which he was supposed to have landed a series of lucrative bond deals. But instead of savoring the day, he found himself surrounded by federal agents at the FBI's North Dade headquarters. It wasn't so much their company that Gary thought unnerving but their highly inquisitive nature coupled with an omniscient understanding of recent, and supposedly secret, events.

They wanted to know if Gary was familiar with a computer company called Unisys. In fact, they asked, wasn't it true that Gary had approached Unisys a year earlier with a proposal that the firm hire him as a consultant and pay him $2 million, in return for which he and the City of Miami's budget and finance director Manohar Surana would steer to the firm more than $20 million in city contracts? Wasn't it also true that after the company rejected Gary's demand Surana told Unisys officials that if they wanted those contracts they had better find a way to come up with some sort of kickback? And wasn't it also part of the plan that Gary, Surana, and Miami City Commissioner Miller Dawkins would work together to transfer the money to the United States from foreign bank accounts?

Gary appeared stunned. For ten years the former Miami city manager had worked diligently to develop Howard Gary and Company, his municipal bond firm, which also acted as the city's financial adviser. He had invested his life savings to start the business, as well as the savings of family and friends. He had prospered. He considered himself a role model for blacks. Suddenly all of that was about to be destroyed.

As Gary struggled to comprehend the enormity of what was occurring, the agents explained that they believed he had committed a serious crime, but they would be willing to listen to his explanation. Quickly he denied that the Unisys scheme was his idea. According to sources familiar with the fateful meeting, Gary asserted that he was forced to participate in the Unisys scheme by Surana, who was in a powerful position, able to influence whether Gary remained Miami's financial adviser and whether he would continue to be involved in the city's bond deals.

He told investigators that he had set the figure at two million dollars because he knew Unisys would never agree to pay such a ridiculously large amount of money. And indeed, the company rejected Gary's demand. As he related to investigators, he was thrilled. At that point he believed he was finished with the Surana-led extortion attempt. But almost a year later, in April 1996, Surana and Dawkins contacted Gary again and told him they had managed to fashion their own deal with Unisys. Now they wanted Gary's help in secretly moving the money from India to the United States.

Gary consented, though he won't explain why. He was unaware, of course, that he was being set up. After Surana made his own demand for at least $100,000, Unisys officials decided they should contact the Miami Police Department, which then brought in the FBI. During a yearlong operation, federal agents gathered evidence first against Surana, then against Dawkins.

On March 4, 1996, the FBI confronted Surana, who agreed to cooperate and wear a hidden microphone. Ten days later the FBI watched as he handed Dawkins $25,000 in cash in the parking lot of a Denny's restaurant. With more Unisys money to follow, Dawkins and Surana sought out Gary in April. If Gary had rebuffed them, he would almost certainly be free and clear today. But instead he acquiesced. As far as the eavesdropping FBI agents were concerned, they had bagged themselves another bad guy.

As he sat at FBI headquarters in early July, however, Gary refused to think of himself as a bad guy. If the feds really wanted to go after corruption, he said, why didn't they do something about County Commissioner James Burke, chairman of the commission's powerful finance committee? Gary asserted that Burke was demanding a $100,000 kickback as a reward for Gary's firm being involved in a multimillion-dollar deal to refinance bonds at the county's recycling plant.

As soon as Gary spoke those words, a new probe was launched, and he agreed to cooperate. Since walking out of the FBI building four months ago, Gary has emerged as the central figure in the federal government's ongoing investigation of Burke, the commissioner's former chief of staff Billy Hardemon, and San Francisco-based bond trader Calvin Grigsby. Working undercover, Gary helped the FBI capture Burke and Grigsby on videotape allegedly discussing hundreds of thousands of dollars in kickbacks.

Last week, in his first interview since becoming a government informant, Gary talked about his relationship to Burke, his cooperation with authorities, and his future. "I made a mistake and I do apologize to the community," he said, referring to his involvement in the Unisys extortion plot. "And now, by cooperating with the government, I am trying to make up for my mistake and set things right."

By all outward appearances Operation Greenpalm -- the code name for the FBI investigation -- has been a tremendous success. Already Miller Dawkins has pleaded guilty to accepting a bribe in connection with the Unisys deal. He was removed from office by the governor and now awaits sentencing by a federal judge.

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