MIAMI (CBS4)-Congressman David Rivera, under scrutiny for the past eight months by state prosecutors, now finds himself the focus of a federal investigation, CBS4 News has learned.
The FBI and IRS are examining the $510,000 payment from Flagler Dog Track to a company created by Rivera’s godmother, Ileana Medina, according to CBS4’s I-Team reporter Jim DeFede.
Rivera’s mother, Daisy, is also listed as a corporate officer.
CBS4 News first revealed the secret payment between Flagler and the company, Millennium Marketing, last December. The payment was made for Rivera’s work on the 2008 referendum that brought casino style slot machines to Dade county tracks.
Initially, state and federal prosecutors were cooperating, but several months ago federal officials decided to pursue their own case, primarily examining questions of possible tax evasion, according to those with knowledge of the investigation.
In essence, federal investigators are trying to determine if Millennium was acting as a front for Rivera. If they can show that Rivera had constructive control of the company, and its money, then Rivera would be responsible for making sure the company paid its taxes. And if they weren’t paid then Rivera could face allegations of tax evasion.
Rivera did not respond to a request for comment. His staff directed all inquiries to an email address for Rivera’s re-election campaign. Those emails were not answered.
Although both state and federal investigators have examined a number of questionable transactions involving Rivera, the one that they keep coming back to involves the 2008 pro slots referendum.
Before Rivera took charge of the campaign near the end of 2006, he reached a secret deal with the owners of Flagler Dog Track that would pay him $510,000 for his work.
Publicly, Rivera claimed he was working on the campaign because he believed having slot machines at pari-mutuel facilities was in the best interest of the community. He boasted he was not being paid a cent for his work.
Only later did it come to light that Rivera had met privately with the owners of Flagler Dog Track. And in a highly unusual move, Rivera reportedly instructed Flagler to draft a secret consulting agreement identifying Millennium Marketing as the firm the track was hiring.
At the time they hired Millennium, the owners of Flagler had never heard of the company. Its founder, Ileana Medina, was an apartment complex manager and had no recognizable experience in running campaigns.
To protect them, Flagler made sure the consulting agreement between themselves and Millennium, spelled out the fact that Rivera would be responsible for doing all of the work. And Flagler executives required Rivera to attach his signature to the agreement.
As one Flagler official explained to CBS4 News earlier this year, as far as they were concerned Millennium was David Rivera.
Another unusual aspect to the deal: Up until that point, Flagler had paid their referendum related expenses through political action committees. But this time Flagler chose to pay for Rivera’s services through a separate corporate bank account – thereby keeping it from being revealed on the political action committee’s disclosure forms.
When the secret deal between Flagler and Millennium was exposed, Rivera tried to maintain he was simply a “vendor” who just happened to be hired by Millennium to work on the campaign.
“Actually that was an arrangement between Flagler Dog Track and Millennium,” he told CBS4 News in January. “There was a contract as is very routine and common that they may look for vendors and that was a vendor that was recommended. They designated me as the point person representing them. That’s exactly what happened.”
Under the contract between Flagler and Millennium, the consulting firm was also entitled to an additional $500,000 bonus because the slots referendum passed.
But for the past two years, Millennium never submitted a bill for that money.
Now sources tell CBS4 News that in the past couple of weeks, Millennium suddenly and without explanation requested the half million dollars from Flagler.
Flagler’s attorney, Roberto Martinez, refused to confirm or deny that Millennium asked for the money. He would only say: “We are continuing to cooperate fully with law enforcement. We have been assured they view us as witnesses. We prefer not to comment further.”
The federal investigation is expected to last into the Fall.
The state investigation, however, will likely come to a close in the next couple of weeks. That investigation has zeroed in on whether Rivera deliberately lied on his financial disclosure forms and his campaign finance reports.
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