A Deal to Dial For

A tenacious entrepreneur and county commissioners are hung up on the repercussions of a prepaid phone card bid

When it comes to protecting his business interests at Miami International Airport, local entrepreneur Pedro Pelaez counters threats with the ferocity of a Lennox Lewis left hook. In 2001 Pelaez lost a bout with the Miami-Dade Aviation Department when his now-defunct company, Quick Packing, Inc., failed to gain a lucrative multimillion-dollar airport contract to wrap luggage in theft-deterrent cellophane, though he'd offered the county more money than the winning bidder, Secure Wrap of Miami. Before conceding defeat Pelaez relentlessly pummeled aviation department bureaucrats and Secure Wrap's principals with allegations of impropriety and unfair play. As a result of his tenacity, Miami-Dade Mayor Alex Penelas and county commissioners allowed Pelaez to go a full twelve rounds even though the county's bid process had technically knocked him out in the third.

Today Pelaez is the featured fighter in another match involving a complicated, lucrative business at Miami International Airport. This time the pugnacious 55-year-old Cuban-American businessman is battling to hold on to his prepaid phone card empire at the airport. "The aviation department wants to screw me again just like they did [in 2001]," he growls. "They don't like me because they know I don't play games. When I fight, they know I prepare for all-out war."

Pelaez's company, Communitel, Inc., came in third place behind rivals Latin American Enterprises, Inc. and WTN, Inc. in a bid to win a new, singular prepaid phone card vending contract from the county. These three companies have also sold prepaid phone cards at the airport since 1995 under temporary one-year test permits issued by the aviation department. During that span, the vendors have flourished under three different county aviation directors. Now just one will get the opportunity to remain in business at the airport. After a scathing 2001 report by the Miami-Dade Inspector General's Office concluded the aviation department did not accept bids for a phone card vendor as required by county procedures, Miami-Dade Aviation Director Angela Gittens recommended only one company get a new contract to sell phone cards in the airport terminal. And that company is not Communitel. (Gittens makes award recommendations to County Manager George Burgess, who then relays his own opinion to the county commission, which has final approval over county contracts.)

Phone card machines, currently operated by three 
different companies at Miami International Airport, 
dispense plastic rectangles used for long-distance 
Jonathan Postal
Phone card machines, currently operated by three different companies at Miami International Airport, dispense plastic rectangles used for long-distance calls

Since it was first advertised via public notice in several business periodicals in June 2002, the aviation department's bid to select a sole prepaid phone card vendor has served as a bruising exercise in how companies and lobbyists go about winning government contracts and how county commissioners superintend the airport to help out friends and political supporters. It is a situation that has at least one county commissioner clamoring for an independent airport authority to wrest control of MIA away from elected officials. "If we get out of the business of awarding contracts then we won't have these problems," says County Commission Chairwoman Barbara Carey-Shuler. "We can pass a billion-dollar construction project without uttering a word, but we'll get worked up about a minor procurement issue like this one."

For more than a year, Pelaez has methodically jabbed away at Gittens's decision to award the contract to Latin American Enterprises (LAE). The telecommunications minimogul hopes to deliver the knockout blow by exploiting the ongoing troubles of LAE's owner, Juan José Pino, the target of a public corruption probe in Argentina who also doesn't pay his fees to the county on time.

Pelaez views the commission as the appropriate agent to undo an injustice by rejecting LAE and awarding the contract to Communitel. "I have been at the airport for [nine] years doing the right thing," Pelaez relates, "paying my fair share, reporting what I had to report to the county, and producing more revenues than the other two companies I compete with. Why should I lie down and let the system walk all over me unfairly?"

Miami International Airport (MIA) encompasses 3230 acres and employs more than 36,000 people, a thrumming little city unto itself. According to aviation department figures, the airport put $9.5 billion into Miami-Dade County's economy last year. Currently MIA is undergoing a $4.8 billion expansion that will add an additional 2.7 million square feet to the airport's 7.4 million-square-foot, horseshoe-shaped terminal. Scattered throughout the terminal are dozens of restaurants, cocktail lounges, hair salons, pharmacies, and shops, which together kicked in $43,135,497 in revenues to the aviation department last year.

In charge of this behemoth is Gittens: a spirited career bureaucrat whose decisions are as quick, decisive, and jarring as a Sugar Ray Leonard punch combo. She was tapped by former County Manager Merrett Stierheim in March 2001 to replace Gary Dellapa. Stierheim, a bull of an autocrat himself, wanted a customer-oriented professional willing to square off with political insiders who do business at the airport, one of the county's primary economic engines. Since her arrival, Gittens, with the Miami Herald and local business groups including the Greater Miami Chamber of Commerce in her corner, has won several key matches with county commissioners over her apolitical decisions regarding airport procurement.

During the past three years, one of Gittens's top fiscal priorities has been to make sure MIA has only one phone card vendor. Typically, private businesses need to win a county contract in order to snag a piece of the action at the airport, though the aviation department will occasionally issue temporary one-year permits so that companies can test the market for particular products or services. Such was the case in 1995, when the aviation department issued separate test permits to Communitel, LAE, and WTN. Under normal county procurement rules, a single phone card vendor should have been selected by bid in 1996 when the test permits expired. Instead the three companies all continued to operate.

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