Miami Herald's "House of Lies" exposes a crisis but then moves on

On a recent rainy afternoon, Barbara Tuitt sits on the covered front porch of her tidy four-bedroom house in Little Haiti. A poster of Jesus Christ hangs on the tan wall behind her as she explains how tens of thousands of taxpayer dollars were wasted on her behalf. Six years ago, the Trinidad native says, she put down $5,700 of her own money for a house in Overtown. Though the City of Miami paid developers $1.4 million for construction of several homes, including hers, only the walls and roof were finished. The next year, Miami's housing chief ordered her incomplete place torn down because the money had run out. That cost the public even more.

"It was such a waste," she says. "All they had to do was install the electrical wiring."

Tuitt's misadventure in affordable housing was one of dozens highlighted in the Miami Herald's Pulitzer Prize-winning 2006 series, "House of Lies." Those eight articles, including multiple graphics and photos, were truly astounding. Politically connected developers and nonprofit community organizations, the newspaper showed, had received hundreds of millions of dollars to do nothing. Three prominent builders were indicted on grand theft charges. The U.S. Department of Housing and Urban Development (HUD) even took control of the county's housing agency for nine months.

One problem. Like many great journalistic projects, the whole thing was quickly forgotten or shrugged off by authorities.

Here's where the major pieces of that investigation stand today:

• Charges were recently dismissed against one of the three people criminally charged in the scandal, Juan Delgado. This makes it likely that his codefendant, former Miami mayoral candidate Raul Masvidal, will soon go free.

• Developer Oscar Rivero, the mastermind of a $4 million scheme to defraud the government, is working a comfy desk job at the pricey Biltmore Hotel after a two-year jail term.

• Federal auditors recently concluded the Miami-Dade Public Housing Agency had improperly spent $3.6 million related to affordable housing grants. They ordered the money repaid.

• And, worst of all, Miami New Times has discovered that county commissioners are doling out multimillion-dollar no-bid grants to politically connected developers through an affordable housing slush fund financed with property tax dollars.

Since the award-winning series ended, housing regulators and Miami's major daily newspaper have dropped the ball. County leaders haven't fixed much in the way of providing housing for the poorest residents, and the Herald has published little about that fact. And need remains high. In 2009, the most recent year available, 22,275 people needed government assistance to find a place to live, county figures show.

Even more people probably need help today, says Marcos Feldman, an analyst with the Research Institute on Social and Economic Policy at Florida International University. Affordable housing developers have raised rents during the recession. "Low-cost rental apartments are drastically undersupplied," he says. "These shortfalls need to be addressed urgently."

Meanwhile, the culprits who profited from the scandals profiled in "House of Lies" have escaped any real punishment. The most important one, Rivero, was a disbarred lawyer and son of a Hialeah bus driver. He parlayed his time as an aide to former Miami-Dade Mayor Alex Penelas into positions on public boards around town and work in the lucrative business of affordable housing. In 2002, Rivero received more than $4 million in grants and loans to build 120 homes in depressed areas of Miami and South Miami. The Herald's series exposed how Rivero had failed to build the projects while amassing more than $4.9 million in personal real estate, including an 11,000-square-foot estate that featured a wine cellar and elevator, among other ostentatious amenities.

Rivero was arrested for grand theft in August 2006. To avoid more charges, he pleaded guilty two years later and promised to cooperate with public-corruption prosecutors against others implicated in "House of Lies," including former Miami-Dade housing director Rene Rodriguez and ex-county commissioner Dorrin Rolle. However, there have been no subsequent indictments that have mentioned Rivero's testimony. He went to prison November 11, 2008, and was released January 26, 2010. He was required to build seven homes with Habitat for Humanity, which he did, according to the nonprofit's chief executive, Mario Artecona.

After his release, Rivero secured a job in the executive offices of the Biltmore. The hotel's president and owner, Gene Prescott, did not return a phone call to explain why he hired the ex-con. Asked for an interview, Rivero declined. "No, thanks," he said.

Masvidal and Delgado seem to be faring even better than Rivero. Both men were charged with grand theft and organized scheme to defraud. Prosecutors alleged Delgado aided Masvidal, a well-known philanthropist and former banker, in a scheme to bilk the county of $3.2 million in public money for a county office building that was never completed. Delgado, who was the general contractor, doctored bills so that Masvidal, the developer, could hide the personal purchase of a $150,000 watermelon sculpture, the Herald series showed.

This past October 6, Miami-Dade Judge Dennis Murphy threw out the case against Delgado, ruling that the statute of limitations had run out and that parts of the prosecution's case were unconvincing. The State Attorney's Office plans to appeal the ruling, but if it stands, Delgado's dismissal will help bolster the defense of Masvidal, who is awaiting trial.

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