By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
By Pepe Billete
By Ryan Yousefi
By Kyle Swenson
Although the corruption charges against James Burke, Calvin Grigsby, and Billy Hardemon had been expected for nearly a year, the days and weeks leading up to the federal indictment played out behind the scenes like a high-stakes poker game. The principal source of tension: Howard Gary. The former Miami city manager turned government informant has proven to be a royal pain in the ass for the U.S. Attorney's Office.
Gary began cooperating with authorities in 1996, after being caught in a kickbacks-for-contracts scandal within Miami's city government. Claiming to be a victim himself, he quickly pointed investigators toward wrongdoing at county hall involving his specialty, municipal bonds; and he helped them build a corruption case against Burke, Grigsby, and Hardemon. When he was hauled in by the FBI for questioning, Gary was given only vague assurances that his undercover work would be taken into account when it came time to charge him for his City of Miami transgressions. At the time, Gary had no choice but to trust prosecutors.
That trust has vanished.
In recent months Gary's interactions with prosecutors and FBI agents have become increasingly combative, according to sources involved in the case, and he has vowed to stop cooperating with authorities -- including refusing to testify at trial -- unless he receives a written pledge from the U.S. Attorney's Office that he will not face criminal prosecution. If Gary is convicted of a felony, not only will he face the prospect of prison, but his bond business will likely be ruined. Gary has already become a pariah within Miami's black community for having set up Burke, Grigsby, and Hardemon (all of whom are black), and he believes that losing his business would be an unfair added price to pay.
Prosecutors, however, refuse to grant Gary immunity. They even took the unusual step of drafting two versions of the indictment against Burke, Grigsby, and Hardemon -- one in which Gary would be included as a government witness and one in which he would not, according to sources. Both versions of the indictment were debated among prosecutors right up to the moment the grand jury hearing the case convened for the final time, on January 8. At the last minute they decided to proceed with the version in which Gary is listed as a cooperating witness.
Prosecutors are hoping to work out their differences with Gary. If they are unable to do so, they remain confident they can win their case without his help. In some ways their case may actually grow stronger if they distance themselves from Gary, whose credibility is likely to come under blistering attack from defense attorneys.
Gary, for instance, will be questioned at length by the defense team regarding his allegedly illegal activities in the City of Miami, including his efforts to help then-Commissioner Miller Dawkins hide the money he received in kickbacks. There was also the incident this past August when Gary was arrested for shoplifting a $68 shirt from Lord & Taylor. Those charges were eventually dropped by state prosecutors after Gary completed a pretrial diversion program.
With or without Gary's cooperation, the government's key piece of evidence will remain a videotape on which Gary, acting under the direction of the FBI, meets with Burke and Grigsby in a San Francisco hotel room. The three men allegedly discuss a plan to pay Burke $400,000 in kickbacks in return for his help in steering bond business to both Gary and Grigsby. That tape is expected to be extremely damaging.
To counter its impact, defense attorneys will try to smear Gary and argue that he entrapped Burke, Grigsby, and Hardemon in order to barter his way out of his own indictment in the City of Miami corruption scandal. Which is precisely why prosecutors have so far refused to promise Gary that he won't be charged in the Miami case. Once they grant him immunity, they fear, defense attorneys can capitalize on that fact before a jury, and his effectiveness as a witness would be seriously eroded.
But now another possibility could emerge. If Gary makes good on his threat and refuses to cooperate with prosecutors, he may still be called to testify -- as a defense witness. Without immunity and facing prosecution, Gary almost certainly would assert his Fifth Amendment right against self-incrimination and refuse to answer questions. The spectacle of Gary taking the Fifth could be richly exploited by defense attorneys.
If Gary holds to his word, prosecutors will soon have to decide whether to grant him immunity or call his bluff and indict him.
Another source of suspense for prosecutors leading up to the indictment was a provocative bit of information they received from Burke's attorney, Ed Shohat. In early December it was widely reported by the media that the grand jury would deliver its indictment against Burke and the others on Thursday, December 18.
All the public saw on that day, however, was a brief story in the Miami Herald under the headline "Source: Burke Gets Holiday Break." The story read in part: "Sources familiar with the investigation said federal prosecutors decided to delay the indictment until after the holidays at the request of one of the attorneys involved in the case."
The report made it appear that prosecutors, filled with the spirit of the season, decided to allow Burke and the others the opportunity to roast their chestnuts as free men rather than as a trio of accused felons out on bail.
Two sources -- one on the prosecution side and the other involved with the defense -- now contend the delay was prompted by Ed Shohat, who indicated to prosecutors that the county commissioner might agree to plead guilty for his role in the bribery scheme and become a government witness against Grigsby and Hardemon. By cooperating, Burke would hope to receive a lighter sentence. The delay in issuing the indictment, the sources say, was intended to give Burke a chance to discuss the matter with his extended family, who would be gathering in Georgia for the holidays.
Prosecutors were even led to believe that Burke would use part of the time to fly to Seattle, where a brother lives, so he could not only consult with him but also look over the city as a possible place to relocate after serving his time in prison.
Burke's willingness to consider accepting responsibility for his actions was supposedly sparked by an early December meeting he and Shohat had with prosecutors in which Burke, for the first time, viewed portions of that videotape in which Burke is allegedly caught discussing kickbacks with Grigsby and Gary. Burke reportedly found the tape devastating, and when Shohat requested holding off the indictment so his client could do a little soul searching, prosecutors were obliging.
In early January, however, Shohat informed the U.S. Attorney's Office that Burke would not become a witness for the prosecution. Federal authorities then moved ahead with their plans and the trio was indicted on January 8. Grigsby pleaded not guilty and was released on a one-million-dollar bond. Burke and Hardemon are expected to plead not guilty at their arraignment in February. They were released on bonds of $500,000.
"I am going to expressly deny that either James Burke, or me acting on his behalf, made any type of a proffer to the United States Attorney's Office," Shohat said recently. "That did not happen. It's a fantasy."
The revealing word in Shohat's denial is proffer, which is a legal term used to describe what a defendant could offer prosecutors as part of a deal. It seems clear now the discussion never reached that stage. Pressed as to whether he had asked for a delay so Burke could meet with his family and consider pleading guilty, Shohat demurred: "I am not going to comment on any discussions I may or may not have had with the United States Attorney's Office."
Was Burke ever truly serious about pleading guilty? Probably not. According to various sources, the current view within the U.S. Attorney's Office is that this was merely a ploy by Shohat to stall the indictment as long as possible.
After Gary's antics and the beguiling tease provided by Burke's attorney, this latest phase of Operation Greenpalm has provided yet another odd twist. The case was assigned to U.S. District Court Judge Ursula Ungaro-Benages. The assignment to this particular judge was completely random, but parties on both sides of the case are wondering about its impact. Ungaro-Benages is married to Michael Benages, a county lobbyist and local political insider. Would this fact favor the prosecution or the defense? Could it raise a possible conflict?
No one seems to know, but it's a strange start indeed to a case that promises only more of the same.