In 1982 the FBI snapped shut its six-year investigation of WFC and a federal grand jury in Texas indicted Hernandez Cartaya, his father Marcelo, and Camilo Padreda on four counts of embezzlement and fraud. The feds alleged the three men embezzled $500,000 in December 1977 through a complex series of bank transactions that funneled deposits from the WFC-controlled Jefferson Savings and Loan in McAllen, Texas, to the Miami bank account of the WFC-controlled American Atlantic Assurance Co. (The father and brother of former Democratic vice-presidential candidate Lloyd Bentsen sat on the Jefferson Savings board of directors.)
A year later federal prosecutors in Texas labeled the WFC investigation "flawed" and dropped all charges against the three men. The assistant U.S. Attorney who launched the probe, Jerome Sanford, was incensed. After leaving for private practice, he told New York Newsday in 1988 that "the CIA may have intervened with the FBI to limit the scope of the investigation," given WFC's alleged ties to the CIA. Sanford filed a Freedom of Information Act request with the CIA to obtain WFC-related documents. The agency denied his request but did reveal it had 24 reports and memoranda dealing with the company. Sanford has since rejoined the U.S. Attorney's Office, and works in Florida's northern district, in Gainesville, where New Times contacted him. He declined to comment for this story. James Rider, currently the Glades County Sheriff, was a sergeant with Dade's Organized Crime Bureau at the time. His unit worked the WFC investigation for two years from a secret office near the airport until the FBI took all the files for its case against WFC. He was surprised the case was dismissed. "It was my opinion the CIA was involved," Rider says.
As the WFC case illustrated, these were heady times in Miami. This was Reagan-era, investment-banking boom time. Neon lights and cocaine time. The red threat hovered menacingly, the Cold War simmered, and the CIA worked its agents and informants on the streets of Miami Beach and Little Havana to fight not only Castro's regime but also leftist movements burgeoning in Nicaragua and El Salvador. Miami was to the Eighties what Casablanca was to the late Thirties -- a hotbed of spooks, crime bosses, and cops playing each other for all they were worth.
Back from Texas, a freshly exonerated Padreda wasted no time taking advantage of the surging economic climate. By the mid-Eighties he had more than a half-dozen low-income housing projects up and running, all fueled with HUD loans, grants, and loan guarantees. There was the HUD-insured, $17.8 million Casa del Lago apartment complex in Kendall; the $2.1 million Riverside Apartments for seniors in Miami; the Airport Seven office building, which received a $1.4 million federal loan guaranteed by the City of Miami; Fontanar Park, a $3.2 million HUD project in the southwest part of the county; and the $7 million Esperanza Turnkey housing project in Hialeah that Padreda was bidding on. (Despite Padreda's evident success, in 1984 HUD inspectors sought to "debar" his construction company -- ban it from future government contracts -- for allegedly underpaying employees on the Riverside Apartments project in Miami and then forging documents to hide that fact. Padreda's company paid a fine without admitting guilt and a judge ruled against debarment.)
Padreda was also hard at work gaining influence with the gatekeepers to all that taxpayer money. He became the Dade County Republican Party's finance chairman, and he collected cash for political candidates. He was a regular at fundraisers, where he schmoozed politicos and promised his support and friendship. "He's a very intense guy, and he's very bright," says former Miami Mayor Maurice Ferré, who knew Padreda from power-circuit parties. "He's got that Cuban populist charm about him." An ex-federal official who knew Padreda from that era describes him as someone "who liked to brag that he could help you." He cultivated relationships with state Insurance Commissioner Bill Gunter and Gov. Bob Martinez. In 1988 President Reagan made him a "distinguished presidential appointee" to the White House's Conference for a Drug Free America. He even had business dealings with the young Jeb Bush.
One of Padreda's HUD projects was an office complex he built at 5040 NW Seventh St., across State Road 836 from Miami International Airport. Signing on as a tenant was Miguel Recarey, a wealthy Cuban businessman whose company, International Medical Centers, would become the nation's largest health-maintenance organization. But Padreda had trouble finding occupants for the rest of his building, so he hired Jeb Bush's firm, Bush Klein Realty, as a leasing agent to secure tenants. Bush, however, was unsuccessful. (Recarey, who like Padreda was a Republican fundraiser, also hired Bush and paid him $75,000, ostensibly to find new headquarters for his company. Recarey would later flee a federal investigation into massive health-care fraud. From Spain, where he now lives as a fugitive, he would tell ABC's 20/20 that hiring Bush was just a way to gain political influence. It seems to have worked. At Recarey's behest Bush had contacted federal regulators to ask that Recarey receive a fair hearing on a requested exemption from federal laws that would affect his HMO empire.)