Other People's Money
Nothing about Arthur E. Teele, Jr., is simple. He is a black Republican. He is mercurial, Machiavellian, and manic. He is paranoid, but often with good reason. He is charming in person, but can be abusive toward his staff, and he once punched out a lobbyist. He is married, but is known to have a flirtatious manner. He is religious and profane, and even his political enemies admit to admiring his skill and tenacity.
He is politically brilliant and has been the single greatest catalyst for action on the county commission for the past three years. And yet among his supporters he engenders a disturbing sense of doubt and fear, a feeling of distrust.
Those contradictions are the essence of Art Teele, and they extend to his personal finances, which are as difficult to comprehend and as troubling as the man himself. If his financial disclosure forms provide a map to his past, any journey using them as a guide will be full of detours that suggest both failure and success.
Indeed, examining the personal finances of any of the candidates for Dade County mayor allows for insight into the man's character. Attorney Alex Penelas earned slightly more than $100,000 last year, and stated he was paid even though he didn't actually do any legal work. "I stopped doing that when I got elected to the county," he told the Miami Herald. In Penelas's view, the law firm Shutts & Bowen keeps him on the payroll as a public service. He was "very lucky," he said, to even find a firm that would be generous enough to take in a county commissioner.
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Another partner in Shutts & Bowen is Xavier Suarez, who has made the vilification of lobbyists a central theme in his mayoral campaign, even though he is a lobbyist himself and earned more than $250,000 last year for his efforts.
Maurice Ferre suffered a personal financial meltdown years ago and lists debts of nearly six million dollars on his financial disclosure forms. He has declared no appreciable income, at least none that he is willing to explain publicly. As he told the Herald, he didn't want to discuss one recent business deal in Latin America because he didn't want his creditors to find out about it.
As for Teele, he is part-time lawyer, part-time lobbyist, part-time businessman, and full-time politician. He hasn't filed income tax returns for 1994 or 1995 and says his attorneys are still negotiating with the IRS about how much he owes, though he acknowledges the amount could be as high as $195,000. From newspapers and radio stations to coal mines and real estate, over the past twenty years Teele has dabbled in numerous enterprises.
The 50-year-old commissioner grimaces at the thought that his financial disclosure forms -- which boast a net worth of $700,000 but also list more than a million dollars in liabilities -- will become the sole criteria in judging his suitability for office. "The problem with this snapshot is that it does not reflect the total picture," he says. "You are looking at a businessman who has been a very successful business person."
Upon graduating from Florida A&M University in 1967 with a degree in political science, Teele, an ROTC cadet, joined the U.S. Army as a lieutenant and was shipped off to Vietnam. In September 1968, he suffered shrapnel wounds to his left leg and was awarded a Purple Heart. Teele also earned a Meritorious Service Medal and two Bronze Stars, including one for valor. He was also promoted to captain.
After his tour in Vietnam, Teele remained in the service and attended Florida State University's law school as part of an army-sponsored program to produce attorneys for the military. He graduated in 1972 and was transferred to Korea, where he became the Second Infantry Division's chief prosecutor; he tried cases of murder, rape, and other major felonies. He finished his military career as senior aide and chief counsel to Lt. Gen. Henry Emerson, commander of the 18th Airborne Corps.
Following Teele's honorable discharge from the army in 1976, Emerson, a Republican, introduced his former aide to the GOP hierarchy in Washington. Even this son of liberal Democrats could see the opportunities being offered him: Teele promptly declared himself a Republican.
In his resignation letter to the army, Teele stated he was leaving the armed forces to pursue a private law practice in Florida. But in truth he was less interested in practicing law than in making money, filled as he was with entrepreneurial spirit. In the late Seventies and early Eighties, he owned two small, black-oriented newspapers (the Capital Outlook in Tallahassee and the Daytona Times), and a pair of radio stations (WJAX in Jacksonville and WRIF in Detroit) and eventually sold them all for a profit.
Throughout this time, Teele was active in Republican politics and fought hard for Ronald Reagan's candidacy in 1980. His reward: a presidential appointment in 1981 to take over the Urban Mass Transit Administration. Two years later he left the Reagan Administration, a newly credentialed expert in transportation matters, on the prowl for his next business opportunity.
He found it with a small Brooklyn company called Applied Electrical Technologies Corporation (AETC), which rebuilt subway motors. Teele bought the company for nearly three million dollars in 1985 -- paying $1.4 million in cash and assuming more than a million dollars in debts the company owed in bank loans. Teele took on several investors, including William A. Patch, a former army brigadier general who served with Teele and Emerson in Korea. Patch invested $150,000.
Teele also borrowed $380,000 from a German tycoon, Hans Kugler, to invest in AETC. As New Times first reported three years ago, Teele and Kugler met on a Concorde flight from Paris to New York. In the case of both Patch and Kugler, Teele had to personally guarantee the loans if AETC failed.
In its heyday, Teele says, AETC employed 200 people and brought in revenues in excess of ten million dollars in 1986. But by the late Eighties competition from both home and abroad sent the company tumbling to financial ruin; in 1989 AETC, which was more than two million dollars in debt, filed for bankruptcy protection. More than 100 creditors lined up -- including Patch, Kugler, and the Internal Revenue Service, which was due $400,000 in taxes.
AETC was not Teele's only business venture following his stint in the Reagan Administration. He invested in one firm that made jewelry from conch shells and another that disposed of medical waste. From 1984 to 1989, he was also president of the National Business League, a group designed to promote business opportunities among blacks. The league ran into serious trouble with government auditors in 1988 and was forced to repay $72,000 in federal grants.
But it is the fallout from AETC that continues to dog Teele. In 1990, the same year he was first elected to the county commission, his plan for reorganizing AETC was approved by a federal judge. At that time, Teele predicted he would be able to revive AETC and pay off all of his creditors within six years. "I'm a tough administrator," he said. "I'll turn the company around."
Six years later Teele has in fact paid most of his creditors, but not without continued legal wrangling. Kugler, for instance, sued Teele in 1993 for failing to keep up his loan payments. (The timing of Kugler's lawsuit appeared to be designed to embarrass Teele, who was running for re-election when it was filed.) Earlier this year, Teele says, he made his final payment to Kugler. He has also paid all the money AETC owed to the IRS. The one debt that hasn't been satisfied is the money still due to retired Gen. William Patch, which with interest now amounts to $229,000.
"This was not a traditional debt," Teele argues. Because of their long-standing friendship, he claims Patch is not pressuring him to repay the money. Patch could not be reached for comment, but his former Miami attorney, Patricia Thompson, disputed Teele's assertion. She has not spoken to Patch in several years, but in the early Nineties, she says, "he paid me good money to try and recover whatever I could, so I don't think he takes this lightly." Teele insists Patch will eventually get his money. "I have paid back every other person I've ever entered into business with."
One name worth noting on Teele's financial disclosure forms is Claude Douyon, whom Teele owes $240,000. The two met in 1983 while Teele worked for Reagan and Douyon was a member of Jean-Claude Duvalier's government in Haiti. "Mr. Douyon was a diplomat in Washington and I came into frequent contact with him," Teele notes. "He's a friend. He's a business partner. He is a person who knows me, knows my family. I have Christmas or New Year's dinner with him every year."
Over the past thirteen years, Teele says, Douyon has loaned him $1.5 million. According to Teele, Douyon would provide financial assistance whenever it was needed -- in blocks of $100,000 or $200,000 -- and Teele would repay it when he could. During AETC's more prosperous period, the daily operations of the company were being managed by a group of Haitians recommended to Teele by Douyon. Teele's current debt to Douyon came about in 1993, when he borrowed the $240,000 from him, for what Teele describes as "cash flow" reasons.
Teele is understandably defensive when discussing Douyon, a member of Haiti's ruling class, which for decades ruthlessly exploited the country's people and assets. "He is certainly what you would call part of the elite business class," Teele admits. "He was never associated with oppression. There was never any charge against him on any matter involving abuse."
Following Duvalier's ouster, Douyon and others were sued in New York, accused of plundering Haiti's wealth. The case against Douyon, Teele says, was dismissed in 1989.
Teele's relationship with the current, democratically elected government of Haiti is also very strong, he asserts. He has represented Haiti free of charge on economic development issues, and he boasts, "I have every reason to believe that I could request and receive a letter of endorsement from former president Aristide for my candidacy for mayor based upon many of the things that I did during his tenure as president."
The former commission chairman is also working to defuse another potentially tricky situation -- this one involving his first wife, Celestra Patton Teele, whom he owes $200,000. Married in 1972, they divorced twelve years later. A licensed nurse anesthetist, she now lives in Birmingham, Alabama, with the couple's one child, Arthur, who recently turned eighteen and is starting college this month.
In 1993 Celestra Teele filed an affidavit with the Alabama courts claiming that Teele was not providing adequate financial support for their son. This past weekend Celestra Teele flew to Miami, and with her ex-husband by her side met with reporters who had been trying to interview her about her allegations.
"Divorce is not pleasant," she explained over a plate of shrimp scampi at Jeffrey's in Miami Beach. "From that time to the present time there has been a healing process. Art and I get along fine now, but there was a strain." She claimed she filed the affidavit alleging nonsupport because she was angry that Teele wouldn't buy their son a new car when he turned sixteen. "I may have become upset, and it was selfish of me," she said.
"Art has never ever denied his son anything," she declared. "Art has never neglected his son in any way. Anything his son needed, he provided. Anything I needed, he provided." The $200,000 he owes her, she stressed, is from their divorce settlement, and includes Teele's commitment to pay for his son's college education and her ownership interest in Teele's parents' house in Tallahassee. None of it, she maintained, is owed her immediately.
In addition to fending off calls from reporters, Celestra Teele has been contacted by representatives of Alex Penelas's campaign, which is one of the reasons she decided to break her silence. "Wouldn't you be annoyed by that?" she complained. "Politicians should not interfere with the family. They are trying to open up old wounds that have healed, and that is not right."
She said she paid her own way to Miami and was not receiving money from Teele for speaking out. She also taped a commercial on her ex-husband's behalf, in case any of his rivals decide to use the divorce filings against him.
The fundamental issue, of course, is whether Teele's past financial problems should prevent him from being considered by voters on September 3. Teele contends that business, like life, is a series of successes and failures, and he has learned from each. It is better, he says, to have the next mayor of Dade County be someone who has lived in the real world of business and who has experienced both its successes and its failures. And he blasts members of Alex Penelas's campaign staff, who have been rummaging through his financial records and attacking him at every turn.
"I've owned newspapers and radio stations," he says. "I've created jobs and provided good wages for the people who worked for me. I know what it's like to worry about making my payroll. And the people who criticize me are really the slime buckets of Dade County, many of whom have never made an honest dollar, most of whom have never paid a person a decent wage or gainfully employed people. They've been lawyers, they've been parasites, they've been leeches."
Teele, though, has had his own experiences as a parasitic lawyer over the past few years. When he was elected to the commission, he was a partner in the law firm Adorno & Zeder, and his principal client was the health-maintenance organization CAC-Ramsay. Shortly after his election, Teele decided he would have to resign from the law firm because so many of Adorno & Zeder's clients did business with the county. He felt he would have to recuse himself from too many issues.
He did take one client with him when he started his own law practice, and that was CAC-Ramsay, one of several HMO providers covering county employees and under a contract worth tens of millions of dollars. Teele contends his role with CAC-Ramsay was to keep track of federal health-care regulations and to work with the company president on possible mergers with larger companies. Instead of a salary, Teele was awarded company stock options.
In 1991 he cashed in his first round of options for a profit of more than $92,000. (He was allowed to buy 5000 shares of stock from the company at $12.50 per share, then sold them for the market price of $31 per share.) In 1994, after CAC-Ramsay was acquired by health-care giant United Healthcare Corp. and the company's stock soared, Teele sold off another 5000 shares. His profit this time: $258,000.
During an interview two weeks ago, Teele claimed that he has never voted on a matter relating to CAC-Ramsay. But records show that on October 5, 1993, he did vote to extend the county's contract with CAC-Ramsay. When confronted with the disparity, Teele said he did not recall the vote. After reviewing the records, he noted that the action was part of the commission's "consent agenda" in which dozens of resolutions are taken up simultaneously; CAC-Ramsay's involvement escaped his notice. Teele, who no longer represents the company, also correctly pointed out that the vote was 9-0; his participation did not affect the outcome.
Another of Teele's major law clients is a French company called Air and Water Technologies. With Teele's help, a subsidiary, PSG, won the right to privatize the water and sewer departments in Opa-locka. Teele's involvement has prompted criticism from those who say the deal takes money away from county government, which used to provide those services for Opa-locka for a fee. "My loyalty is to the people, not the government," he responds. "And that deal makes the best sense for the people of Opa-locka.
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