The Man Who Caught Carmen

You can't blame Carmen Lunetta for being a cocky bastard. For years he got away with one of the most audacious scams in local history. According to Lunetta, the Port of Miami, which he has ruled like a Third World despot, was an economic powerhouse. From the cruise industry to cargo shipping, the place was boasting double-digit growth every time you turned around.

Thanks to the Miami Herald we now know that the seaport is a debt-ridden, scandal-plagued mess of an enterprise, and that Carmen Lunetta is a pathological liar.

You can't blame the Dade County Commission for being ticked off after the Herald hyped its exposure of Lunetta's con game. For years commissioners had enjoyed a mutually beneficial relationship with the port chief: They would leave him to his own entrepreneurial devices and he'd look the other way as they regularly dipped into port slush funds to grease campaign contributors and bolster pet projects. Now that the port's operations are being subjected to intense scrutiny by the Herald and others, that practice most certainly will be stopped cold. Bummer.

Well, maybe a bummer for a gaggle of blatantly irresponsible county commissioners whose cookie jar just had its lid slammed shut, but definitely a plus for taxpayers, and a much-needed boost for the antiquated concept of good government.

So what is Ed Wasserman's problem? Why would the otherwise level-headed editor in chief of the Daily Business Review be in such a snit that he'd spend $5000 for an advertisement on a billboard?

Under the ad's headline "Following the leader" are two opposing images. On the left are three issues of the Miami Herald; on the right is a front page from the Review. Both papers display stories about Lunetta. Publishing dates are included in large type: The Herald editions are from May 1997; the Review copy dates from December 1996. To the right are these words: "Don't wait for the Herald to catch up." The billboard, located on Biscayne Boulevard at Thirteenth Street, is angled so that it points directly at the Miami Herald's headquarters across the street.

It's true. The Review beat the Herald to a pulp in its coverage of Lunetta and the snake pit he's made of the seaport. Beginning in early October of last year, Review reporter Dan Cook (assisted by colleague Susan Postlewaite) began publishing a series of articles that documented a host of startling revelations. Among them:

*Lunetta's long-time outside consultant, Luis Ajamil of Bermello, Ajamil & Partners, has for years promulgated seaport business projections that were wildly optimistic and consistently inaccurate. (The projections are crucial to investment bankers who help finance capital projects at the port.) For example, the vaunted cruise industry, far from booming as Lunetta would have us believe, has actually been stagnant since 1989.

*Contrary to widely held assumptions -- eagerly fostered by Lunetta -- the port has been losing money for the last three years and has been surpassed by Broward's Port Everglades in operating revenue.

*The port's ratio of debt to revenue has skyrocketed to disturbingly high levels. "Leveraged to the hilt," as the Review put it, the port owes more than $120 million to Dade County and the State of Florida.

*Lunetta has allowed the port to accumulate a ridiculous number of overdue accounts receivable -- debts totaling millions of dollars, much of which will never be collected. Worse, he has repeatedly and deceptively described as "revenue" debts he knew he would never collect or that he had already forgiven.

*Lunetta engaged in highly irregular management practices in which he favored certain seaport tenants by allowing them to borrow money and begin construction projects without permits or approval from the county commission.

*The 1982 sweetheart deal with Fiscal Operations Inc. for the operation of the port's gantry cranes includes provisions for virtually guaranteed profits, unsupervised expenditures, and millions in advances from the county that may never be paid back. (The head of Fiscal Operations, Calvin Grigsby, is under investigation by the feds as part of Operation Greenpalm.)

All that and more had appeared in the Review by mid-December. In the following months, Dan Cook zeroed in on Lunetta and his contradictory statements, misleading explanations, and relentless obfuscations. Taken as a whole, the Review's reports qualified as a journalistic tour de force -- and a chilling reminder that, in Dade County at least, some public officials cannot be trusted and require vigilant oversight. If Dade's county commissioners were not going to keep an eye on Lunetta, at least enterprising reporters like Cook would.

As for the Miami Herald and the masses of citizens who rely on it for basic information about how well (or how poorly) local governments are functioning -- well, bummer again. The message is depressingly unambiguous: If it hasn't appeared in the Herald, it simply hasn't happened.

So you can imagine the bemusement in the Review newsroom on May 13 when the Herald published a story headlined "Miami's Seaport Running in the Red." That laughably belated piece of information arose from a county commission committee meeting convened (also belatedly) to investigate the multitude of questions raised by Cook's reporting.

Bemusement turned to amazement five days later when the Herald, in reporting Lunetta's abrupt resignation ("Embattled Port Chief Resigns"), led its readers to believe that the port director's decision was prompted by the Herald's having obtained some potentially incriminating documents. The fact that Lunetta was "embattled" because the Review had been pounding him for months -- well, that somehow got lost in the excitement. Bummer.

Both Cook and Ed Wasserman say they're accustomed to the Herald failing to give them credit for stories broken in the Review. But what drove Wasserman to distraction -- and caused him to spend several thousand bucks on a billboard -- was the fact that for nearly eight months Herald managers disregarded the Review's continuing disclosures that the Port of Miami was in serious disarray. Says Wasserman: "It was particularly egregious because it also served the purpose of absolving county commissioners for having ignored those disclosures. Commissioners sat on their hands for months. There was a community of interest between a newspaper that didn't move aggressively enough and a county commission that didn't move aggressively enough."

The Herald's opportunities to move aggressively in investigating Carmen Lunetta have been numerous and date back many years. As early as 1982 the paper chronicled baffling irregularities at the port. At that time Lunetta was challenged by the paper to explain why one particular consultant (none other than today's golden boy, Luis Ajamil) received an inordinate amount of work and exceedingly attractive contracts. The paper also reported on a bid for a port project that appeared to be rigged to the benefit of one particular port tenant.

A full decade later, in 1992, the Herald again caught Lunetta red-handed, this time as he leaned on his friends at Fiscal Operations to keep an old buddy, Julian M. Fernandez, on its payroll even though Fernandez was officially working for the county. Also that year the Herald confronted Lunetta about his suspicious involvement with an Italian restaurateur who was seeking investors (and was later charged with murder). At one contentious point in that inquiry, Lunetta reportedly grabbed and crumpled up a page from a reporter's notebook.

After a couple of articles, however, the paper's attention began to wander. Despite ample evidence that Lunetta habitually broke the rules and then lied about it, the Herald never showed much interest -- not even in confirming his always-rosy portrait of the port's core businesses: cargo and cruise lines.

Efforts to understand this lackadaisical approach have fired the imaginations of local conspiracy buffs. One theory revolves around Knight-Ridder boss Tony Ridder: If Lunetta were to be examined too closely, his sloppy management and the port's shaky finances would come to light. If that happens -- and if it's as bad as some people fear -- the county would have a difficult time justifying the port's expansion into Bicentennial Park. If the port can't move into the park, a state grant of $45 million will be lost. Without those millions, the county could not afford to proceed with plans to build a waterfront sports palace for Micky Arison and the Miami Heat. And no individual worked harder to keep Arison happy and at home than Tony Ridder.

Dan Cook is no conspiratorialist, but he can't help speculating. "I'm surprised not so much that they ignored us," he muses, "but that somebody didn't say, 'Let's get those documents and see if he's right, because if this is true, we've got to let the public know before the county commits itself to a Maritime Park.' My guess is that it's somehow tied up with the arena project. There is no justification for Maritime Park. Lunetta has no rationale to show we need it, and city fathers recognize that a full-blown investigation might be a threat."

Cook is leaving the Daily Business Review for a job in Portland, Oregon. In his final column this past Monday he took a moment to reflect, recalling that he'd been spending the weekend in the Keys at the time Lunetta submitted his resignation. When he returned, his voicemail contained sixteen congratulatory messages. "I loved working for the Review," he wrote. "The paper showed me, finally, after all these years, what a journalist can accomplish with a phone, a pen, a notepad, and a pair of comfortable shoes.

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Jim Mullin
Contact: Jim Mullin