By Michael E. Miller
By Allie Conti
By David Villano
By Jose D. Duran
By Michael E. Miller
By Allie Conti
By Kyle Swenson
By Luther Campbell
After spending the past year at war with the U.S. Attorney's Office, Howard Gary has agreed to a truce; he will remain the government's star witness in the bribery case against former Miami-Dade County Commissioner Jim Burke, California financier Calvin Grigsby, and Burke's former chief of staff Billy Hardemon.
Of course, having the volatile Gary as a cornerstone of the government's case may be one of the riskiest propositions since Humberto Hernandez asked Jose Quinon to look after his wife while he was in jail. When Gary was first caught in a 1996 kickbacks-for-contracts scandal within Miami's city government, he was more than willing to save himself by cooperating with investigators. He quickly steered them toward wrongdoing at county hall and worked undercover to help build a corruption case against Burke, Grigsby, and Hardemon.
Gary was given only vague assurances that his clandestine endeavors at the county would be taken into account when prosecutors finally decided whether to charge him for his City of Miami transgressions. The bond underwriter and former Miami city manager had no choice but to trust prosecutors.
As New Times reported in January, however, Gary eventually grew cocky and demanded that the U.S. Attorney's Office guarantee he would not be charged with a crime. Prosecutors refused, and last year Gary's attorney sent a letter notifying them his client would no longer cooperate.
This past summer the two sides struck a new deal -- sort of. Under a new agreement with prosecutors, a copy of which was obtained last week by New Times, Gary still has only vague assurances his cooperation will be taken into account when prosecutors decide whether to charge him. In a Justice Department memo outlining a portion of the agreement, the government acknowledges that "on June 5, 1998, at a meeting between Gary and his counsel, and representatives from this office, Thomas E. Scott, the United States Attorney for the Southern District of Florida, orally advised Gary that upon the completion of his cooperation with this office, he would assess the nature and extent of Gary's cooperation and make a determination as to the disposition of Gary's case, which could include a plea to a felony, a plea to a misdemeanor, or no charges being filed."
Sources familiar with both agreements say this represents a slight improvement for Gary; under the original he was almost certain to be criminally charged. Prosecutors would then "reward" his cooperation by limiting his exposure to jail time. Now Gary could emerge without a glove being laid on him.
Another major element in this new agreement is use immunity, which means none of the statements or information Gary provided can be used against him. This perk may be extremely important, as Gary has detailed for federal investigators a litany of his illicit encounters with local politicians. But these details contain some serious inconsistencies.
According to a Justice Department summary memorandum, Gary originally told federal agents in 1996 he had given Burke $6000 in cash. Burke supposedly needed the money to buy a house. "[Gary] further stated that, although it was characterized as a loan, there was neither a note nor a loan agreement executed," the memo explains. "Gary further stated that he had not been repaid and did not really expect to be repaid."
Two months ago, however, Gary changed his story and told authorities he had actually made numerous payoffs to Burke over the years: "During the course of debriefings on August 5, 7, and 19, 1998, Gary told FBI agents that he made cash payments to Burke on several occasions in the following amounts: $1000 to $2000 after Burke's election to the county commission in 1993; $5000 in connection with a Merrill Lynch WASA swap transaction; and $8000 after another bond deal." Burke's attorney Ed Shohat says he is aware of Gary's allegations and claims they will work in the defense's favor. He refused to elaborate.
But Gary's statements went beyond Burke. He said he made illegal contributions to former Miami-Dade County Commissioner Art Teele's 1996 campaign for county mayor. "Gary also stated that he was approached by Arthur Teele, who asked him to donate $10,000 to his 1996 campaign," the memo notes. "Gary said he gave $5000 in cash to another person at Teele's request. Gary said he knew that the amount requested and subsequently given exceeded the campaign contribution limits and should not have been accepted."
Teele denies asking Gary for any illegal campaign contributions. "That is a categorical lie," he asserts. He says he may have asked Gary to help him raise money during his campaign, but nothing more.
Gary also admitted he once paid former Miami City Commissioner Miller Dawkins under the table. "Sometime in 1985, after Gary left his position as city manager for the City of Miami, he was contacted by Commissioner Miller Dawkins, who referred a lobbyist/developer to Gary for potential business opportunities," the memo states. "As a result of the referral, Gary was retained on a zoning matter and received a $1000 retainer. Dawkins supported the zoning matter, after which Gary paid him $500." Dawkins is currently in federal prison after pleading guilty last year to accepting $100,000 in bribes to rig a city contract.
One of the more interesting aspects of Gary's statements to prosecutors was his claim that his relationship with former Dade County Commissioner Joe Gersten was always ethical and completely legal. New Times has learned that part of a defense strategy for Burke, Grigsby, and Hardemon could include the claim that Gary and Gersten controlled the county's bond business in the late Eighties and early Nineties. Under this scenario, Gersten allegedly forced companies to hire Gary's firm, and in turn Gary paid off Gersten.