MIAMI — On Jan. 3, 2011, days before taking his seat in Congress, Miami Republican David Rivera filed financial documents in Washington he said would "dispel any speculation" about his personal finances.
But the documents didn't mention the $18,000 Rivera owed at the time to his mother's business partner, records show. One day after filing the forms, according to the records, Rivera received $20,000 from his mother, put it in a campaign account, and later used the money to pay off the business partner's loan.
This was one example of the financial maze the Florida Department of Law Enforcement and the Miami-Dade State Attorney's Office encountered in their 18-month investigation of the congressman's finances. The agencies closed their investigation of Rivera last week without filing criminal charges against him.
Rivera, who has vehemently denied any wrongdoing, remains under investigation by the FBI and IRS.
In a memo wrapping up their case, Miami-Dade prosecutors said Rivera "essentially live(d) off" campaign contributions for almost a decade while serving as a part-time state lawmaker, paying mortgages on four different properties and jetting around the globe though he never held a full-time job or earned more than $28,000 a year.
So how did he do it?
Newly released FDLE investigative reports show that Rivera used back-dated campaign records, a web of bank accounts and undisclosed loans, a batch of credit cards and misleading disclosure forms to disguise his finances from the public eye during much of his eight-year tenure in the Florida Legislature.
Rivera, once the powerful budget chief in the state House of Representatives, also collected at least $175,000 in undisclosed donations for a perpetual campaign as a Miami-Dade committeeman with the state Republican Party — money Rivera frequently used to pay for meals and travel, including plane tickets for his then-girlfriend, the records show.
Other expenses Rivera called "campaign related," the records show, included $105 for show tickets at a medieval-themed casino in Las Vegas, and $360 for tickets to an off-Broadway show in New York. The title: Perfect Crime.
The FDLE also suspected that Rivera billed both his campaign account and his legislative travel account for the same expense — an accusation of double-billing that Rivera strongly denies. Rivera and his attorney, Michael Band, gave investigators records they said showed that Rivera did not double-bill.
Rivera received another $132,000 from a company he asked his mother and her partner to set up as part of a consulting deal with a Miami-Dade dog track — money Rivera never disclosed until after he left state office, records show. Rivera has described these payments as loans — and he borrowed money from his mother and her partner to repay the debts to the very company they ran, investigators found.
Miami-Dade prosecutors concluded that they could not file criminal charges against Rivera, citing a truncated statute of limitations for misspent travel expenses — preventing prosecution for any activities after two years — and holes and ambiguities in the state's campaign-finance laws.
In a statement issued through his campaign, Rivera lambasted the FDLE probe as "fabricated lies."
"All of Congressman Rivera's campaign travel expenses and reimbursements were directly related to either political or fundraising campaign activities and events," the statement said. "Congressman Rivera was never reimbursed more than he was owed in reimbursable campaign expenditures."
But the FDLE's investigative reports describe a series of questionable practices. Among them:
Rivera, who was his own campaign treasurer, back-dated expenses listed in campaign reports on several occasions in 2010, making it appear that expenses were paid several months earlier than they actually were, the FDLE said.
For example, investigators said fundraiser Esther Nuhfer received $200,000 from Rivera's state Senate campaign fund in the summer of 2010 — when Nuhfer was working on a separate congressional campaign for Rivera. In state campaign records, the payments were back-dated by as much as five months, as though they were paid before the congressional race began, records show.
Rivera also back-dated a $24,900 payment he made to his 2006 campaign account, making the payment look like an earlier personal loan to the campaign, the FDLE said. Investigators found that Rivera had used campaign funds to pay for expenses on his personal credit card, and later reimbursed the campaign for the charges — using $25,000 Rivera had received from Millennium Marketing, a company created by Rivera's mother and her partner at Rivera's urging.
In campaign records, Rivera also back-dated a $15,000 payment to Millennium for "campaign consulting," records show. In fact, investigators found, Rivera made the payment to his mother's company in three months after the campaign had ended.
In a statement to the Herald on Saturday, Rivera denied back-dating any campaign records. "FDLE should be ashamed of their dishonest and unprofessional behavior in this matter," the statement said.
The State Attorney's Office and the FDLE began investigating Rivera in October 2010 — just a month before he was elected to Congress — following a Herald story questioning Rivera's claims that he had worked as a contractor for the U.S. Agency for International Development for seven years.
The investigators confirmed that Rivera never worked for USAID — contrary to Rivera's public assertions and the financial disclosure forms he filed with the state at the time. The FDLE found no evidence of a regular salary outside Rivera's salary as a state representative, the records show.
But they did find plenty of money.
Investigators looked into Rivera's campaign accounts and made an unexpected find: $175,000 in political donations that Rivera had never publicly disclosed.
As it turned out, he didn't have to: Rivera raised the money as part of a campaign to be state committeeman for the Republican Party, an obscure position unregulated by state campaign-finance laws. Rivera ran for state committeeman in 2004 and 2008, and then was named head of the Miami-Dade GOP from 2008 to 2010.
The committeeman donors included political allies and companies that often lobby in Tallahassee. The biggest donation: $50,000 from a political action committee tied to Dr. Alan Mendelsohn, a Broward County ophthalmologist and former GOP donor now serving a four-year prison stint on corruption charges.
According to the FDLE, Rivera used these campaign funds to pay off expenses on his personal credit cards, including travel expenses, dry cleaning, pet care, more than $1,500 in medical and dental bills and $508 at a mattress store, records show. Bills from Toys R Us, Borders, Barnes & Noble, Blockbuster and movie theaters — Rivera is known to be a movie buff — were also reimbursed from the campaign account, the records show, as was $202 in charges from Nordstrom in Coral Gables on Christmas Eve 2009.
Rivera and Band met with investigators in August and provided records they said showed that many of these expenses were paid for with Rivera's private funds, not campaign money. While some monthly credit card bills were paid with campaign funds, personal expenses were ultimately paid with personal funds, they argued.
But the bulk of the travel expenses, they argued, were legitimate political expenses. Being on the ballot every two years, Rivera has been constantly raising money or campaigning for office, making almost every meal or trip or other expense a political one.
"His entire life's focus was on political activities related in some manner to campaigns for office," prosecutors wrote in a memo closing the investigation last week.
Unlike traditional campaign donations to candidates, money raised for committeeman or other political party positions is essentially unregulated; Florida law offers no guidance on how this money must be spent, prosecutors said. Rivera also mixed up the committeeman money with his campaign donations for his state House races, further complicating the probe.
Rivera also used committeeman funds to pay for $3,100 in plane tickets for Michelle Arrondo, a Fort Myers woman who dated Rivera from 2005 to 2009, the records show. Arrondo traveled with Rivera to New York, Chicago and Las Vegas, and to Minneapolis for the 2008 Republican National Convention, records show.
Arrondo told investigators that "none of these trips were purely of a personal nature (vacation) and that Mr. Rivera would attend a variety of political functions during these trips," the FDLE reports say.
In an interview with the Herald, Arrondo emphasized that she was not involved in Rivera's political work. "Anything that I did with David I did because I was his girlfriend," she said.
According to the prosecutors' memo, Rivera told them that the expenses paid for Arrondo and another woman he dated later were legitimate campaign expenses because "as a single man running as a political conservative, it was necessary for him to appear at campaign-related events with a female escort."
Rivera has called this statement "libelous" and threatened to sue the state attorney's office over it.
Investigators also examined Rivera's relationship with Nuhfer, a political fundraiser whose company received more than $870,000 from campaigns or committees with ties to Rivera — including $150,000 in "bonus" money from a state Senate campaign that Rivera abandoned to run for Congress in 2010. Nuhfer also traveled with Rivera on fundraisers to New York, Washington, Las Vegas and other cities, the records show.
In response to questions from the Herald last year, Rivera said the bonuses paid to Nuhfer were "contractually obligated" because she met her fundraising goal. But in an interview with FDLE agents, Nuhfer said she did not have an "official contract" with Rivera's campaign; she said Rivera agreed to pay her up to 15 percent of any money she helped raise, plus a consulting fee for other services, such as organizing advertising, the records show.
Nuhfer said she "did not know why" Rivera paid her in a series of five $50,000 checks from the state Senate account; typically, she said, she received her entire fee at the end of a campaign.
FDLE agents found that Nuhfer withdrew about $190,000 in cash from her business accounts in the summer and fall of 2010 — after receiving $250,000 from the Rivera campaign, the records show. Nuhfer said the cash was used to pay campaign workers, phone-bank employees and others as part of a "get-out-the-vote" effort in the fall of 2010. But she said the cash came from her work with the Republican Party, not Rivera, and she never gave any money back to the congressman, the records show.
In addition to the campaign money, the investigators also focused on a $1 million consulting deal Rivera negotiated with the Flagler Dog Track — now the Magic City Casino — to run a 2008 campaign to win voter approval for slot-machines at Miami-Dade parimutuels.
Instead of paying Rivera directly, the dog track paid the fees to Millennium Marketing, a company created in 2006 by Medina, the business partner of Rivera's mother, Daisy Magarino. In a sworn statement, Magarino told investigators that Rivera came to her and Medina and asked them to create Millennium.
Rivera told his mother and Medina that he wanted to "assist them" financially by giving them the first $500,000 earned under the contract, Magarino told investigators. But Rivera later received $132,000 of this money in 11 installments. Magarino said these payments were part of a loan arrangement, and gave investigators copies of loan documents as proof.
"Ms. Magarino stated that she never knew what the loans were for or why Mr. Rivera needed the money," the report says. In total, Millennium received $700,000 from the dog-track deal.
The investigators also traced large withdrawals and transfers among the bank accounts of Millennium and Magarino and Medina, the records show. For example, FDLE agents said they could not trace what happened to a $95,316 cashier's check endorsed by Rivera's mother in 2009.