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NUMBER 147 - SEPTEMBER 24, 2019
At the beginning of his term, Commissioner Ken Russell embraced the problem of affordable housing, and discovered the problem which many politicians face when making promises about constructing new affordable housing stock: a lack of money.
He had minor success as the Chairman of the OMNI Community Redevelopment Agency (CRA), which was able through the use of tax increment funds to actually spend some of those monies for affordable housing, unlike his predecessor Marc Sarnoff, who treated those funds as a slush fund to be used as tax rebates for his rich developer friends and campaign donors.
CRA monies however, only provided funds for projects within its boundaries, and the real housing problems that face Miami are city-wide. To deal with that problem required money that was beyond the current abilities of the city to raise.
It is unclear how, or even when Russell was presented with a proposal that promised millions of dollars fund the affordable housing problem, but when he did, the offer became one he could not refuse, even to the point of refusing to look the gift horse in the mouth.
The person who dangled this proposal in front of Russell's eyes, was the well known and controversial foreclosure attorney Bruce Jacobs.
Jacobs prides himself on being the kind of lawyer that takes no prisoners in a courtroom, and as the name of his radio show, Jacobs VS Goliath reveals, he sees himself in biblical terms as someone put on earth to slay the philistines and money changers, which in modern times have become in his eyes the big banks and lending companies whose actions have fueled the foreclosure crisis in this country.
Jacobs is also known in the legal community as a guy currently one step away from being suspended and/or disbarred from the practice of law for attacking judges and fellow attorneys with vitriolic and abusive allegations of malfeasance and unethical behavior if they don't agree with him.
In short, there are people who love him, and there are people who hate him.
Among the later were the judges on the 3rd District Court Of Appeals, who while not hating him, certainly had tired of his mouth and who on April 10th of this year forwarded to the Florida Bar a request for an investigation and imposition of possible sanctions against Jacobs citing 3 separate cases where he had disparaged the members of the court and attorneys representing several major banks.
Copyrighted: 2011,2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019
Russell, who since his unsuccessful effort to get Mendez fired back in 2016, has repeatedly referred to her guidance as the North Star when making decisions, except of course when he has gotten it into his head that regardless of what the law says, or what might happen as a result of unintended consequences, he decides to do what he want regardless of the consequences.
The above warning from Mendez illustrates one of those instances.
On May 23rd, Russell introduced a Pocket Item at the end of the commission meeting setting up a Affordable Housing Trust Fund, and designating the city to accept any sanction money awarded by a court in a case where Jacobs was defending a client against The Bank of New York Mellon.
Pocket Items have become a way for commissioner to sneak items they want past an unsuspecting public, because seldom does anyone know what the language in these items is until after it has been voted on. In this case, Russell also benefited from Commissioners Carollo and Reyes being absent.
In short, Russel pulled a fast one and got away with it without any questioning by the public or two commissioners who might have asked hard questions.
This is the resolution.
A description of some of the legal issues, as well as the opinions of some of his fellow attorneys and even bloggers can be found , , and .
Because this is Miami, the story of a how an outspoken and controversial attorney who loves publicity ended up partnering with a politician who also loves publicity doesn't follow a predictably straight line. There are detours. So before we get to Jacobs and Commissioner Russell, we need to take one of those detours.
BRUCE JACOBS, BEN KUEHNE AND ALEX DIAZ DE LA PORTILLA
When the 3rd DCA referred Jacobs to the Florida Bar on April 10th, one of the attorneys representing him was Ben Kuehne.
Ben Kuehne is a criminal attorney with his own colorful history who made his name representing drug smugglers back in the day.
In the year 2000, Kuehne was also one of the lawyers that helped Al Gore lose the presidency in Florida, and in the years since he's developed a clientile of corrupt public officials whose money for attorney fees often comes from public funds.
In recent years Kuehne's clients have included Frank and Joe Carollo, Alex Diaz de la Portilla and Bruce Jacobs. (He represented Frank Carollo against my ethics complaint that Frank had abused the power of his office to evade a traffic ticket and Frank ended up having to settle for a Plea of, "No Contest." ( and )
He has been Joe Carollo's go to lawyer for years, and is currently representing him in several cases involving ethics charges of helping out his pal Alex Diaz de la Portilla meet voters by using public money for parties in nursing homes, and in a federal lawsuit filed by Little Havana businessman Bill Fuller over Carollo's harassment of him and his businesses.
When it comes to Alex Diaz de la Portilla, he is representing him in the appeal of a Florida Ethics Commission, "Probable Cause" finding from a complaint that included these two counts:
On his radio show in July, Jacobs revealed that, "Ben sends me an email saying, "Hey, you gotta help out my buddy Alex Diaz de la Portilla, a personal friend, he's got a problem with foreclosure of his parents house; a foreclosure. Help him out. Sure. And it didn't even dawn on me that we're dealing with Alex Diaz de la Portilla of the Diaz de la Portilla, the Republican political dynasty, and if you've lived in Miami you've probably heard that name ah, over the course of years and years and years."
Jacobs then went on to describe how he immediately sprung into action, and filed a handful of motions managing to persuade Circuit Court Judge Beatrice Butchko to stay the consent judgment allowing the house to be sold. No date has been set for the next hearing in the case.
To round it all off, Alex Diaz de la Portilla is currently a candidate for the District I Miami City Commission seat being vacated by Willie Gort, which would, if he were to win, put him in a position where he would have a say in the issue that Russell and Jacobs have cooked up.
What would that issue be? That's what this story is all about.
THE MAYOR, COMMISSIONER RUSSELL AND BRUCE JACOBS SET OUT TO RAISE MONEY FOR HOMELESSNESS AND AFFORDABLE HOUSING THROUGH SANCTIONS IMPOSED AGAINST BANKS FOR BAD BEHAVIOR
It is unclear when and how Mayor Francis Suarez, Ken Russell and Bruce Jacobs actually met, or for that matter how the idea of trying to get courts to award sanctions levied against banks for bad behavior to the City of Miami to fund a Foreclosure Sanctions Affordable Housing Trust Fund came about, but the idea has a certain Robin Hood kind of appeal for folks who think that the bankers running the big banks and lending institutions should all be in jail, and so an idea that not only took money away from these banks and lending institutions and made it available for affordable housing sounds like a good idea to some of these folks in a robbing Peter to pay Paul kind of way.
On a created by a group formed sometime after June 13th, to promote this scheme, it features a quote from Jacobs saying:
"For 2 years Miami Mayor Suarez and Commissioner
Russell have worked with atty Jacobs to bring a remedy
to homelessness and affordable housing, and now that their
resolution #6021 is a reality remedy is rolling out across
When questioned however, Mayor Mayor Francis Suarez has refused to respond to 2 requests to him and his spokesman for acknowledgement of whether he had been involved with Jacobs for 2 years, or even 2 months. The record also shows that Suarez has never publicly spoken in support of this issue at the two commission meetings where this proposal was included in Resolutions.
Text messages do show that the first effort to meet about this proposal came on May 1st, 20 days after the 3rd DCA issued it's order against Jacobs to the Florida Bar. In this first message, Russell introduces Jacobs to Rebecca Wakefield, his Chief of Staff, with instruction to organize a meeting with the city attorney, or whoever she delegated.
The reason for the rush to adopt this Resolution by May 23rd was that on May 24th, the case of The Bank Of New York Mellon v. Behr was scheduled for a hearing in Broward County, and Jacobs not only wanted the Resolution to wave at the judge, but he also wanted Commissioner Russell in attendance.
To read the press release, click .
It's understandable that Jacobs would be trying to do all he could do to close out as many cases as possible in advance of whatever action the Florida Bar decides to take against him, and that he would try to use publicity generated by being in some sort of partnership with the City of Miami and other local governments that would generate money for affordable housing in those cities and counties in persuading judges to award him sanctions against the banks, but in doing so this raises several questions that no one was ever able to ask at a commission meeting.
The first question, and the one that virtually everyone with any knowledge of the law that I've spoken with in doing research for this story expressed reservations and concerns about was that since Jacobs is acting as the attorney for individual property owners who have allegedly been impacted adversely by the behavior of a bank or lending institution, why would he want to talk them into agreeing to give this money away to the City of Miami, or any other municipality?
The damage that occurred justifying sanctions was done to Jacobs' clients and not to the City of Miami, and even allowing for a certain amount of public spirit, the fact of the matter is that if these people didn't have enough money to pay their mortgages to begin with, why would any of them agree to give away tens or hundreds of thousands, or even millions of dollars of money awarded for damages to them to a city like Miami for a perceived community benefit?
One has to face the reality in this situation that when it comes to the City of Miami, no one with good sense should ever consider them as good shepherds of the taxpayers money, much less money coming over the transom on a deal like this - it doesn't make any sort of rational sense, even after admitting that people don't always make judgements based on their own best interests.
This is turn raises the question of what kind of representation is Jacobs making to his clients about this give away that they would agree to this? No one has asked this question, and it's a question that should be front and center at any court hearing where the issue of sanction money being awarded the the City of Miami.
Secondly, the notion that whatever money the city collected - if they ever collected any - would go onto a fund that would be distributed state-wide raises a question of not only the ability of the city to manage such a fund, but also what ulterior motive Russell has up his sleeve.
As I've said, and as the history of Miami's finances have proven, this is not a municipal government that has shown long-term competence in managing the money they spend on themselves, so imagine them becoming a clearinghouse for distributing money state-wide.
Thirdly, Russell was only in office a little more than 8 months when he decided that even though he had never attended a commission meeting, had not voted in a municipal election in a decade, and didn't even know anything about how a meeting was conducted with Rules of Order, he none the less felt he had the smarts and skills to run for Congress.
At the last commission meeting he actually stunned people in attendance when he declared that when it came to the obeying the law that he was, "a big believer in spirit over letter."
Anybody this self-centered and conniving clearly has to be seen as embracing this scheme for the ability to use it for political gain than for any notion that it would actually become a solution for the problems associated with affordable housing in the City of Miami.
Lastly are the questions that no one on the city commission bothered to ask when Resolution 6021 came up for a vote on June 13th, starting with the question of whether, by agreeing to an 18% contingency fee, does this make Jacobs an employee of the city?
First, here is the portion of Resolution 6021 that I am referring to:
Russell did show up, and here is the portion of the court transcript where he was questioned by the judge.
It's not clear that Russell did in fact know or understand what, "Behind that legislation, there are agreements that have led to all of the litigation resulting in this resolution." meant, because other than the Resolution, the city has not released any documents that showed that they had even been presented with a copy of the complaint in this case.
The court, after hearing more arguments from both sides, chose not to question Russell and deferred making a ruling on Jacobs motion for sanctions. The complete transcript of the hearing can be read .
The news of Russell's appearance however, was enough for emails and calls to City Attorney Victoria Mendez asking about the role of a Miami City Commissioner essentially taking sides in a foreclosure case taking place in another county.
We'll get to all of that in more detail further down.
Jacobs however, continued to be in a hurry because it appears that perhaps in anticipation of the Florida Bar hitting him with a suspension or disbarment, he was eager to get as many cases as possible settled as quickly as possible.
On June 13th, Russell introduced a second Resolution that expanded the list of target banks, enlarged the range of the city's ability to, "distribute the funds to create affordable housing throughout the City of Miami and the State of Florida," and to do this exclusively with Bruce Jacobs. (You can read the Resolution .)
For a city that has demonstrated an inability to deal with it's own affordable housing problems, the decision to set themselves up as a vetting and funding source for affordable housing projects throughout the state was not only a sign of extreme hubris, but also, given Miami's history of mismanaging money and being in the pocket of developers, an invitation to a free-for-all cluster fuck.
On June 18th, Jacobs sent Zach Schlein, a writer with the Daily Business Review the following email detailing a list of court cases that he hoped would provide an opportunity for sanctions to be imposed on the banks that had been cited in the 2nd Resolution passed by the Miami City Commission as well as additional instructions and commentary on how Schlein should write a follow up article on the cases that had been dismissed.
The following day, the Daily Business Review published the following story. You can read it .
On June 26th, Schlein wrote a second story, this one about how Maui County officials in Hawaii were considering hiring Jacobs to go after sanction money from Bank of America.
You can read the story .
Records from Hawaii do not show that Jacobs has been hired, nor that the Maui County Commission followed through with adopting a resolution similar to Miami's.
In fact, a recent story in the revealed that claims against Bank of America for a $150 million commitment to affordable housing were not pursuable by the Attorney General of Hawaii.
"In an internal memo from state Deputy Attorney General Ryan David Keanu'ole to Maui County Deputy Prosecutor Peter Hanano indicates that the state isn't in a position to pursue the bank. "As for any changes on the issue re: BoA's $150M commitment. There have been no changes in our position - that there are no legal bases for the state to pursue BoA on its past pronouncements regarding loans to native Hawaiians," wrote Kanaka'ole..."
This would not preclude civil litigation, but the cast of characters that already seem to be part of this effort to get money from Bank of America in Hawaii challenge the notion that only places like Los Angeles and Miami are sunny places for shady people.
Schlein has not written anymore stories about Jacobs or his efforts to get the courts to award sanctions which would indicate that all of the cases that Jacobs listed in his email as potential sources of sanctions, have not panned out to date.
Jacobs however, does not seem to be a guy who puts all of his eggs in one or two baskets.
Following the passage of Resolution 6021 by the Miami City Commission a new organization was formed in California called, .
Featured prominently on this California website as the authors of Resolution 6021 are Miami Mayor Francis Suarez and Commissioner Ken Russell.
The chairwoman of this group is Billie Rene' Frances Lillian Powers from Southern California, a woman who has become a plaintiff in several lawsuits against banks brought under a concept she and her attorneys call, "Congressional Intent through Congressional Regulations."
Additional background information on Ms. Power's fight with banks - she lost her home through a foreclosure - can be found .
The one thing, besides a hatred of banks and bankers that seems to unite all of these folks and especially Jacobs, seems to be a desire for publicity.
Throughout the text messages and emails exchanged between Jacobs and Russell he always focused on making sure that every step of the process involving the Resolutions was preceded or accompanied by press releases that portrayed him not only in a favorable light, but that made it appear that he was actually acting as an agent of the City of Miami, with their blessing.
In one case case he had to retract a press release that was sent out not only to the news media, but to his "contacts" with Presidential candidates Sanders and Warren. Nery is Nery Inclan, a former local TV reporter who now represents Jacobs as his PR Consultant.
Along the way the issue of Jacobs legal problems had become a topic of discussion, and Russell, on Jacobs behalf wrote to City Attorney Victoria Mendez:
Secondly, here is an email from Jacobs to Russell, where Jacobs is clearly trying to enlarge the parameters of the deal that he initially reached with Russell for the speedy passage of Resolution 19-0195 on May 23rd so that Russell could show up in the Broward County courtroom, to broaden the language to include more cases and more banks, and it also appears that as a result of some discussion he has agreeded to reducing his contingency fee agreement to make it more acceptable.
How could any attorney seek sanctions, and collect fees on behalf of the City of Miami without them being a client?
This raises the question of who is Jacobs really representing in this venture?
The people who have hired him to handle their foreclosures, and who supposedly are being asked to give up any sanction money awarded by a court, or the City of Miami who is looking for free money to prop up their affordable housing problems?
This is a question for the members of the Miami City Commission should have asked before they voted, WITHOUT COMMENT, on Resolution 6021.
To date, Hawaii has not signed on to this scheme, and from my research I have not been able to discover one case where sanctions have been sought as a result of this scheme has been awarded sanctions.
The one thing that we can be 100% sure of is that the PR generated by this effort will no doubt play into Ben Kuehne's defense of Jacobs before the Florida Bar, as a misunderstood attorney only seeking to do good by his efforts
It's Miami. Bitches!