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Lawsuits cloud Rep. Vern Buchanan's political future

U.S. Rep. Vern Buchanan's auto stores are accused of misdeeds.

AP

U.S. Rep. Vern Buchanan's auto stores are accused of misdeeds.

SARASOTA — Flush with cash and buoyed by a big reelection victory last fall, U.S. Rep. Vern Buchanan seemed a prime Republican contender for U.S. senator or Florida governor. But on May 12, the millionaire Sarasota car dealer announced he would forgo a run for statewide office in favor of seeking a third House term.

"Representing Florida's 13th District in the U.S. House is an honor and a privilege," Buchanan said. "I look forward to the opportunity to continue serving the people.''

What Buchanan didn't say: Just three days earlier he had been in Orlando, giving a deposition in a lawsuit that accuses him of breaking his promise to reward a former employee who saved a real estate deal involving Buchanan's Sarasota Ford. It was a deal in which Buchanan and his company "made out like bandits,'' the seller says.

And it is just one of 14 lawsuits — all accusing Buchanan and his auto stores of shady practices — that may torpedo any ambitions for higher office, at least in the foreseeable future.

"It's very common when you've had a tough battle at home that involves lawsuits that you decide to back away from those statewide races and stay put,'' says Susan McManus, a University of South Florida political scientist. "His constituents know him, but it would be a more difficult thing to sell to Florida at large.''

The nonpartisan Citizens for Responsibility and Ethics in Washington says it is unaware of any other representative as mired in litigation as Buchanan.

"Then again, members of Congress generally don't own as many businesses as Mr. Buchanan,'' says deputy director Naomi Seligman.

Buchanan, 58, declined to comment except for a statement praising Gov. Charlie Crist's decision to run for the U.S. Senate and expressing hope they could work together on "critical issues'' facing the 13th District, which includes Manatee, Sarasota, Hardee and De Soto counties. Buchanan reportedly had been considering either the Senate or the governorship, depending on what Crist did.

In court filings, Buchanan's attorney says the lawsuits are libelous and were part of a smear campaign by backers of Buchanan's election opponent, Christine Jennings.

But months after the election, all of the suits remain active. And the court files, along with interviews and other public records, show why Buchanan may have been reluctant to risk the scrutiny of a major statewide race.

Fair or foul?

For controller Melissa Hacker, Sarasota Ford was a nightmarish place to work. Her lawsuit describes 11-hour days, death threats from colleagues and pressure to sleep with the general manager, who "belittled her constantly'' when she refused.

Hacker was fired in 2006 — the same year Buchanan ran for federal office on the issue of a "fairer tax code'' even as his dealership helped a top salesman avoid paying any federal taxes at all.

Moses "Moe'' Gingerich claimed that the IRS is an illegal agency. In 2005, he was among the plaintiffs in a $4 billion federal suit against the IRS — since dismissed — that was filed by a Hernando County man who ran what the Justice Department called a fraudulent tax avoidance scheme.

The following year, the IRS filed liens against Gingerich for $182,006 in unpaid taxes. The agency also sent Sarasota Ford a notice to levy against his $100,000-plus yearly pay.

When Hacker told Gingerich to fill out a withholding form, he wrote her letters that got "uglier and uglier," her lawsuit says.

She also received an angry call from John Tosch, Buchanan's longtime attorney and business associate. Tosch insisted that Gingerich, who had worked for Sarasota Ford for 20 years, was a subcontractor not subject to withholding. In response, Hacker noted that the dealership "provided Gingerich an office, set his hours, paid his health insurance … and controlled the way he did business — in short, Gingerich failed every single one of the subcontractor tests.'' Ignoring the IRS levy would violate federal law, Hacker warned.

"At this point,'' the lawsuit says, "Tosch told her to enjoy her job while she still had it.''

Hacker has since gone to work for another dealership. Tosch did not respond to a phone message, and Gingerich declined to comment. At 73, he is still selling cars for Sarasota Ford. The IRS has slapped him with two more liens — bringing his total in unpaid taxes to nearly $300,000.

Thanks for nothing

With limited room to expand at its downtown location, Sarasota Ford leased a building near Interstate 75 for its auto repair shop. Tosch, negotiating on Buchanan's behalf to buy the building several years ago, irritated the owner so much that the deal was in danger of collapsing.

"John Tosch was very aggravating, wanting to do this and that,'' the owner, Charles H. Miller, said last week. "So I said forget it.''

That's when Buchanan asked for help from a trusted employee, Richard Thomas, the shop's fixed operations director.

In a lawsuit, Thomas claims that Buchanan promised him an ownership interest in the shop so long as he was employed by Sarasota Ford and could salvage the deal. Thomas got along well with Miller, and helped Buchanan Automotive Holdings obtain a five-year lease with an option to buy the property for $1.2 million.

In fact, Miller says, the value was $2 million by the closing in 2006, though he honored the original price. Buchanan mortgaged it for $1.4 million, which "freed up cash,'' Miller says.

But Thomas got nothing. He had been fired in 2004 because Sarasota Ford feared that treatment for his wife's brain tumor would drive up its insurance costs, his lawsuit alleges. Because Thomas was no longer employed, Buchanan refused to give him an interest in the repair shop.

Miller found Thomas a "very honorable man'' and recalls overhearing a conversation that seemed to support his claims.

"What I understood was that if the building sold to Buchanan, (Thomas) was going to own a portion of it for his due diligence'' in saving the deal, Miller says.

Cash for checks?

Buchanan's dealerships also include Venice Nissan Dodge in Sarasota County. Its former finance director has made allegations — supported by documentation — that are potentially among the most damaging for Buchanan if he continues in public office.

In a complaint filed last year with the Federal Election Commission, Carlo Bell says that in 2005 the general manager told him and two other employees that they "needed to contribute'' to Buchanan's campaign. The general manager, cash in hand, said each man would receive $1,000 if he wrote a $1,000 check, Bell says.

All three accepted the money but "after leaving the office we all agreed that taking $1,000 in cash for writing checks to the campaign seemed wrong,'' Bell said in an affidavit. "But we were all afraid that refusing to do so might endanger our employment.''

Bell's complaint includes copies of his canceled check and a receipt for a cash deposit the same day. Under federal law, it is illegal to coerce employees to contribute to a federal candidate or to reimburse them.

The election commission moves so slowly that the allegations could hang over Buchanan for years. Bell, who is now in nursing school, also sued Buchanan, saying he was forced to resign for refusing to engage in allegedly illegal activities.

"Nobody was reimbursed,'' Buchanan's lawyer, Mark Ornstein, says. "We are defending the cases and we expect to win.''

Buchanan already has a small victory — he got an order that bars opposing lawyers from releasing his May 9 deposition to the media.

Times researcher Carolyn Edds contributed to this report. Susan Taylor Martin can be reached at susan@sptimes.com.

Lawsuits cloud Rep. Vern Buchanan's political future 06/07/09 [Last modified: Tuesday, June 9, 2009 4:29pm]
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