The ABCs of a corruption case: Your guide to the businesses and people linked to Scott Maddox
Jeff BurlewFormer Tallahassee City Commissioner Scott Maddox and his longtime friend and business partner Paige Carter-Smith traded official action and influence for cold hard cash with companies doing business with the city.
But federal prosecutors have never publicly released the names of the companies or executives involved with the now-disgraced political power pair. In federal court documents, they’re listed as a veritable alphabet soup of corporations and characters.
There are Companies A through F and Persons A through G. Some were readily identifiable from their descriptions in federal court records. Others were not so easy to triangulate.
The Tallahassee Democrat, which has been covering the Maddox saga since breaking news in 2017 of a major FBI investigation into local graft, has already identified many of the people and firms involved in his schemes. Now, however, the full cast of characters can be revealed, based on sources close to the investigation, court documents and city records.
Maddox and Carter-Smith, former head of the Downtown Improvement Authority, pleaded guilty earlier this month to honest services wire fraud, honest services mail fraud and conspiracy to defraud the government. The three counts carry a combined maximum prison term of 45 years, though they could get a lower sentence depending on their level of cooperation with federal prosecutors. A third defendant, local businessman John “J.T.” Burnette, is set to go to trial in November.
Maddox served on the City Commission from 1993 until 2003, when he left to focus on lobbying with his Governance, Inc. firm and run for higher office, which proved unsuccessful. In 2012, he again won a seat on the commission but distanced himself from Governance, claiming he sold the firm. In reality, he was still taking cash from city vendors funneled through Governance and a related firm, Governance Services. Carter-Smith became the public face of both firms.
The case against Scott Maddox:
►CORRUPTION CONFIRMED: Scott Maddox, Paige Carter-Smith guilty after 4-year Tallahassee probe
►Read the 'Filed Statement of Facts' documents about Scott Maddox and Paige Carter-Smith
►Read the plea agreements signed by Scott Maddox and Paige Carter-Smith
Some of the businesses involved, including Uber Technologies and Waste Pro USA, have acknowledged they are cooperating in the ongoing federal investigation. Other businesses have kept quiet, making it unclear where they stand in the probe.
Joseph Lewis, a retired FBI agent and former acting assistant director of its criminal division, said business owners or principals linked to pay-to-play schemes could be treated as criminals or cooperators depending on their history and what they do when the FBI starts asking questions.
“If they know it’s a matter of business or no business and they hear business is for sale, they might want to take that opportunity,” he said. “But when the bureau knocks on the door, then they need to come clean. Then they cooperate and go their separate ways and they won’t be charged.”
Lewis said company officials who don’t tell the truth or have a track record of bribery could face a litany of federal charges.
“If the bureau knows they’ve got a history and they deny that they did anything or that any money ever passed hands, depending on their answers, they could be a (potential target) or they could be a witness,” he said. “And they’ll be given an opportunity to be on one side or the other.”
Company A
Preble-Rish
An engineering and surveying firm with offices across North Florida and coastal Alabama, Preble-Rish became a client of Governance around 2007, after Maddox finished his first stint as city commissioner but before his return to the commission in 2012.
The company, later acquired by a national firm, stopped making monthly payments to Governance in 2011. The following year, when Maddox was running again for a commission seat, he asked execs to help his campaign by catching up on its payments. Maddox threatened that an unidentified person who ran a competing firm “would never again do business in the city of Tallahassee” because he supported one of Maddox’s opponents in an earlier election.
“Maddox made this statement with the intent to place Company A in fear of economic harm to induce Company A to pay Maddox,” the indictment says.
Soon after, the company began paying Governance a monthly retainer fee between $2,000 and $5,000. Maddox in 2013 and again in 2015 voted for contract extensions for a list of engineering firms that included Preble-Rish.
The company occasionally missed payments to Maddox, prompting him to contact a representative of the firm and say, “Show me some love,” according to the indictment. During that time, Maddox didn’t do any work for the firm aside from introducing the company to the owner of Company E (see below).
Governance pocketed about $61,500 from Preble-Rish between May 2012 and October 2015. However, the company is the only one referenced in the indictment that does not appear in lengthy statements of facts signed by Maddox and Carter-Smith as part of their guilty pleas. In their statements, they admit to acts related to the other five companies.
Preble-Rish, with offices in Tallahassee, Port St. Joe and elsewhere, was acquired in 2016 by the Fairfax, Virginia-based Dewberry firm. A spokeswoman for Dewberry declined to comment.
Ralph Rish, founding partner of Preble-Rish, referred the Democrat to Brian Bieber, a white-collar criminal-defense lawyer from Miami and shareholder with the GrayRobinson firm.
“At this time, we are not commenting on any specifics related to this matter,” Bieber said.
Company B and Person A
Uber and former government affairs employee Cesar Fernandez
After Uber started local operations in 2014, city commissioners began ironing out a new ordinance to regulate both ride share cars and taxi cabs. Early on in the process, Cesar Fernandez met with Maddox to get his support, but the commissioner wouldn’t commit and noted the taxi industry was lobbying him, too.
Maddox suggested Carter-Smith could help, and a few weeks later, Uber put her on a $5,000-a-month retainer. Carter-Smith, one of several local lobbyists and consultants hired by Uber, served as a go-between for communications between the company and Maddox. An email between Carter-Smith and an Uber rep forms the basis of the wire fraud count that she and Maddox pleaded guilty to in court.
Uber had a number of concerns about an initial version of the ordinance, including possible price restrictions and driver drug tests. Ultimately, the company got everything it wanted, according to the feds.
During a final public hearing in July 2015, Maddox was late to the meeting, prompting Carter-Smith to send a reassuring text message to Uber reps: “Maddox is going to be at the important part of the meeting :-) .... I did not want you to panic when you did not see him there,” she wrote.
Over several months, Uber paid $30,000 to Governance. The consulting firm in turn made $40,000 in payments to Maddox directly.
Fernandez was listed in leaked federal court documents as a witness for the government. His resume includes a number of political campaigns, including a stint as deputy campaign manager for former Mayor Andrew Gillum during his Democratic run last year for governor. Fernandez declined to comment.
Uber indicated in recent press statements it was not a willing participant in Maddox and Carter-Smith’s secret machinations.
“We view ourselves as victims of extortion in this case, which is why we've cooperated fully,” a company spokesperson said.
Company C and Person B
Waste Pro USA and regional vice president Ralph Mills
Waste Pro USA hired Governance in 2006 as it was looking to expand its operations in North Florida and hoping to become the city’s trash collection vendor. That same year, it landed a lucrative, seven-year contract with the city.
At the time, Maddox was out of office and in between City Commission stints. After he returned to the commission in 2012, he “continued to solicit and accept payments from Company C in exchange for Maddox’s agreement to engage in official acts to benefit Company C as opportunities arose.”
One such opportunity arose in the summer of 2014, after the city proposed fining Waste Pro more than $64,000 for service problems, including failing to deliver trash receptacles to city residents. Ralph Mills balked at the bill and tried to get city staff to reduce the fines. He had no luck until he reached out to Maddox, who reassured Mills he would resolve the issue.
“Maddox spoke with the city manager,” the indictment says, “and the fine was ultimately reduced to approximately $7,000. Before and after the fine was reduced, Carter-Smith emailed three written updates to Company C stating that Governance was working on and succeeded in reducing the fine.”
Anita Favors, who served as city manager at the time, previously declined to comment because of the ongoing investigation. She did not return a phone call about this story.
Waste Pro paid Governance $4,000 a month under the 2006 contract but upped the payments in early 2014 to $4,500 a month. All told, over a five-year period, Waste Pro paid Governance nearly $200,000.
Mills, who worked for Waste Management for years before joining its corporate rival, testified last year before a federal grand jury in Tallahassee investigating Maddox and Carter-Smith.
He was seen leaving the federal courthouse, coincidentally, on the same day city commissioners approved a contract extension with Waste Pro. Maddox, who also worked for Waste Pro during talks with Leon County, recused himself from the vote.
Waste Pro acknowledged last year it was cooperating with federal investigators. Last week, Sara Brady, a company spokeswoman, issued a statement saying, "Waste Pro has cooperated fully with the prosecution and law enforcement authorities involved. The company has not been accused of or charged with any wrongdoing."
Company D and Person C
M of Tallahassee, Inc. and its founder Emory Mayfield Sr.
M, Inc., a prominent Tallahassee road contractor, has long-standing ties to Maddox. Around 2005, Emory Mayfield Sr., the company’s owner, began paying Governance $6,500 a month, though the payments were later cut to $2,500. Maddox continued to solicit and accept payments after his return to the commission in 2012, the indictment says.
Maddox in 2014 voted against changes to a city policy designed to help businesses owned by women and minorities because he knew it would hurt M, Inc., financially. The company, along with several others, was found in violation of the policy a few years earlier in a city audit.
“I think we’re on shaky legal ground,” Maddox said before casting the only no vote.
In 2015, Maddox made the motion to approve three-year contract extensions with nine firms, including M, Inc., and intervened in a dispute between the company and the city over a construction project. In 2016, after Maddox voted to approve another contract extension, Mayfield sent him a text message acknowledging his assistance.
“You do good work,” Mayfield said.
“I love it when a plan comes together!” Maddox replied.
M, Inc., founded in 1982 by the elder Mayfield, is known for major local road and infrastructure projects, including FAMU Way, Orchard Pond Parkway, Franklin Boulevard and parts of Capital Circle.
The company paid Governance nearly $150,000 between late 2012 and late 2017, according to the indictment. M has not returned a number of phone calls.
Company E and Person D
Arbor Properties and its owner Gordon Thames
Arbor Properties has more more than a dozen luxury apartment complexes across North Florida and southern Mississippi, and its president, Gordon Thames, is a well-known Tallahassee mover and shaker and political donor. Over the past decade, he’s given more than $75,000 to a host of local candidates, including Maddox, who registered as a lobbyist for Arbor in 2011.
When Thames served last year on Leon County’s charter review committee, he suggested restricting the way Community Redevelopment Agency dollars could be spent, saying he hoped it would discourage corruption in the wake of the FBI investigation, which included CRA projects. At the time, any FBI interest in the company wasn't publicly known.
Around 2003, the same year Maddox left city office, Arbor Properties began paying Governance $2,500 a month. About four years later, Arbor ratcheted the payments up to $7,000. Maddox continued to ask for and get monthly payments from Arbor after he returned to City Commission.
Around January 2017, Thames ran into a problem with city utility work at one of his complexes. According to court records, he texted Maddox, who responded less than two hours later.
“All good,” Maddox said. “I can handle city guy no prob. Already had a word at the top. Should be straightened out.”
In March of that year, Thames met with Maddox and Carter-Smith and said he would need help from dealing with city officials on an upcoming issue. Maddox and Thames agreed that Arbor would pay Governance $10,000 up front, followed by six monthly installments of $5,000.
Not long after, the city denied a particular type of fencing at one of Thames’ properties. Maddox got in touch with the city manager, at the time Rick Fernandez, who was later ousted after the Tallahassee Democrat revealed he took Florida State football tickets from lobbyist Adam Corey, himself a figure in the FBI probe. A few days later, a city official emailed Thames to say the fencing was OK after all.
According to the indictment, Arbor Properties and its affiliates paid Governance nearly $140,000 from late 2012 to early 2017.
Person E and Person F
Developer Mike Steiner and bar and restaurant owner Dan Gilbertson
Of all the business people mentioned in the indictment, one stands out for refusing to pay Maddox: local developer Mike Steiner. In 2014, as Steiner was developing the Onyx complex downtown, he was approached by Dan Gilbertson, owner of Potbelly’s, according to the feds.
Gilbertson allegedly told Steiner he should pay Governance to get Maddox’s support for the development, which was seeking financial help from the CRA. The indictment says Gilbertson made the overture at Maddox’s direction and told Steiner the offer came from the commissioner.
The indictment says Steiner “refused to pay Governance or hire any of its employees." When the CRA voted to give the development $1.6 million in assistance, Maddox wasn’t present for the vote.
The indictment doesn’t provide much more information. However, the alleged shakedown became the focus of a secretive review at City Hall. According to an unsigned, undated city memo obtained by the Democrat, Steiner complained to Leon County Commissioner Kristin Dozier and political consultant Drew Jones, both of whom reported the incident to Roxanne Manning, former CRA director. Manning then discussed it with top city brass.
The city memo says Steiner denied telling Dozier or Jones that Maddox tried to solicit a bribe from him and that Maddox denied it, too. Steiner also denied that Gilbertson ever told him anything of the sort. But Dozier said in a previous interview she doubted the veracity of the memo.
Gilbertson, in an earlier interview with the Democrat, also denied the allegation. However, he confirmed he testified before a federal grand jury in Tallahassee as part of the corruption probe.
Steiner declined to discuss the matter.
"Other than the fact that I look forward to seeing this great city move forward, I will not be making any further comments," he said in a text.
Company F and Person G
Southern Pines Development and local businessman John “J.T.” Burnette
Southern Pines was a development firm out of Atlanta or Nashville or maybe even Fayetteville, North Carolina, where its president Mike Miller apparently had offices. The company sought approvals for possible projects in the city.
Miller, who came to town the summer of 2015, hung around two others newcomers, the long-haired Mike Sweets, a medical marijuana entrepreneur, and Brian Butler, another businessman.
Miller got close to Maddox and then-Mayor Andrew Gillum. He and his friends flew Maddox out to Las Vegas on a chartered jet, picking up the hotel tab and arranging time with a little person entertainer. On a separate trip without Maddox, they also met up with Gillum in New York City, where they all caught a performance of the Broadway hit “Hamilton.”
But Southern Pines was nothing more than a ruse, a front company that gave cover to Miller, who along with Sweets and Butler were actually FBI agents. Maddox and other politicians wouldn’t put the pieces together until 2017, when Miller and his friends split town with no explanation, subpoenas began dropping on City Hall and the Democrat began reporting on the FBI investigation.
Miller struck up a friendship with Burnette, known for a myriad of projects including Hotel Duval, the DoubleTree Hotel, Gateway Center and an abandoned solar energy farm. Burnette earlier this year married Kim Rivers, who was also named in FBI subpoenas and serves as CEO of Trulieve, Florida’s largest purveyor of medical marijuana.
Over time, Burnette confided that Maddox was a powerful local official who could help get projects approved if he got paid through his consulting firm. Maddox, meanwhile, described Burnette as “my guy” in a meeting with the agents and said he didn’t want to have “inappropriate conversations” with anyone but him.
In one meeting, Maddox suggested Southern Pines cough up $20,000 a month to get the ball rolling. The agent commented that “that’s a lot of money,” but Maddox replied, “No it’s not.” Not long after, Burnette and the agents agreed to get the price down to $10,000 a month.
Burnette saw Maddox as a business cutthroat, describing him in one meeting with the undercover agents as a “vengeful mother------” who would retaliate if they stopped paying. Burnette was identified as “Person G” in early court documents, though that changed to his full name after his indictment.
Carter-Smith sent Southern Pines a contract in December 2016 for “marketing” and “government consulting” that called for $10,000 monthly payments over the course of a year. Southern Pines mailed Governance four $10,000 checks from November 2016 through February 2017, according to the indictment. One of the checks is the basis of a mail fraud count that stuck against Maddox and Carter-Smith.
Where the money went
The companies paid Governance at least $544,000 between late 2012 and mid-2017. However, the vendor-related charges Maddox and Carter-Smith pleaded guilty to involve a smaller amount of money, some $70,000 combined from Uber and Southern Pines.
As part of their plea deal with federal prosecutors, charges related to the other companies would be dropped at sentencing. Neither the U.S. Attorney's Office for the Northern District of Florida nor the Public Integrity Section of the U.S. Department of Justice would file more charges arising out of the same "transactions or occurrences" behind their pleas.
Several dozen counts, including an overarching racketeering charge, would be dropped as part of the deal. However, the agreement also says, "Defendant agrees that substantial evidence exists to support the charges."
Maddox's attorney, Stephen Dobson III of Tallahassee, said in a text that the accusations in the indictment "were only one side of the story."
"The facts show that my client did not commit these offenses," Dobson said. "That is why the government dropped 38 counts. To now make it seem as if he is guilty of dropped counts is both unfair and untrue."
Maddox and Carter-Smith also pleaded guilty to lying on tax forms about their income, real-estate short sales and other matters. And while they face forfeiture on ill-gotten properties, not a penny of their personal proceeds can be recovered, according to their signed statements.
"Defendant Maddox admits that the proceeds he personally obtained as a result of the offenses described above have been dissipated by him and cannot be located upon the exercise of due diligence; have been transferred or sold to or deposited with a third party; and/or have been placed beyond the jurisdiction of the court."
Contact Jeff Burlew at jburlew@tallahassee.com or follow @JeffBurlew on Twitter.
KEY TO THE CASE
Companies
A — Preble-Rish
B — Uber Technologies
C — Waste Pro USA
D — M of Tallahassee, Inc.
E — Arbor Properties
F — Southern Pines Development
Persons
A — Cesar Fernandez
B — Ralph Mills
C — Emory Mayfield Sr.
D — Gordon Thames
E — Mike Steiner
F — Dan Gilbertson
G — John "J.T." Burnette