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Blame for Florida’s nonprofit pay scandal points to state officials as hearings start

“The problem is, the state has to admit it screwed up, too,’’ said one oversight expert. “The state should not be handing out millions of dollars to employees without adequate oversight and diligence.

TALLAHASSEE — In an extraordinary meeting Monday, 10 current and former members of the board of directors of the Florida Coalition Against Domestic Violence and two top executives will have the opportunity to explain their actions to legislators as they attempt to avoid criminal charges stemming from allegations of financial abuse at the embattled publicly-funded agency.

But their unique involvement in the excessive compensation package awarded to the coalition’s former CEO, Tiffany Carr, has created a conflict of interest that could spell criminal or civil charges, legal experts say.

“It is possible that all of the members of the board of directors end up in jail,’’ said Daniel Ravicher, a professor at the University of Miami School of Law. “This looks like criminal theft and possibly fraud.”

Related: 'So shady and disgusting': Florida's nonprofit pay scandal is worse than you think

After some of the officials give depositions in the morning, the House Committee on Public Integrity and Ethics will question Sandy Barnett, chief operating officer of the Florida Coalition Against Domestic Violence, and Patricia Duarte, chief financial officer, during a five-hour hearing on Monday afternoon. The committee has been asked to investigate the $7.5 million salary package awarded to the coalition’s long-time CEO over three years,

The committee will also grill 10 board members, most of them current and former domestic violence center directors. All have been subpoenaed by the House in a rare exercise of its investigative powers.

Absent from the proceeding will be Carr, who lives out of state and House officials have been unable to compel to appear. However, the governor’s Chief Inspector General Melinda Miguel was able to serve Carr through her attorney Chris Kise, the governor’s office said on Saturday.

Documents show that under the coalition’s rules, Carr appointed the board and most of its members were directors of domestic violence centers across the state that relied on state and federal funds distributed by the Florida Coalition Against Domestic Violence for their operations.

But Tim Jansen, a Tallahassee attorney representing Shandra Fernandez-Kvam, one of the board members, said it was “irresponsible” for anyone to rush to judgement about their guilt.

“We would ask the (Public Integrity and Ethics) committee and the public not to rush to judgement. The (Florida Coalition Against Domestic Violence) board is comprised of life long servants who serve and assist victims of domestic violence,’’ Jensen said Sunday.

In 2003, after Carr befriended then-Gov. Jeb Bush and his wife, the Florida Coalition Against Domestic Violence was given exclusive status as the clearinghouse for about $52 million annually in state and federal funds intended to help victims of domestic violence. Carr led the coalition for 20 years but stepped down in November 2019, citing a “significant health diagnosis.” She was then hired to serve as a consultant.

Where was the Department of Children and Families?

Oversight of the coalition’s finances has been the responsibility of the Florida Department of Children and Families, but only after the Miami Herald revealed in 2018 that Carr’s reported salary was $761,000, did DCF start looking deeper.

The Florida Coalition Against Domestic Violence refused to turn over all its financial documents to Department of Children and Families until House leaders threatened a subpoena. For the first time, the documents revealed a scheme to award Carr years of paid time off, which she was allowed to exchange for cash.

“These practices include exorbitant compensation payouts, abuse of state dollars, withholding of information, and breach of public trust,’’ Gov. Ron DeSantis said on Feb. 13, when he ordered his chief inspector general to investigate.

Two members of Congress have asked for a federal probe and on Thursday, DeSantis issued an executive order that requires all state agencies to review any single-source contracts that are given protected status in state statute.

So how much legal trouble is this for Carr and board members who approved the payouts?

Related: How a nonprofit paid $7.5M to its CEO: The Tiffany Carr Story

Seven of the women have hired attorneys while three women are relying on Eric Centrone, the attorney provided by the coalition’s liability insurance company, according to House officials.

“I’m sure there’s not a coincidence that those same centers that were getting more money are on the board,’’ said Miami Republican Rep. Juan Alfonso Fernandez-Barquin, the sponsor of a bill to end the requirement that the Florida Coalition Against Domestic Violence serve as the clearinghouse of all state and federal domestic violence funds.

“I’m an attorney by trade. I want to know who’s signing these checks, who is in the board meetings where the minutes are, why are there no minutes,’’ Fernandez-Barquin said.

Rachiver, the University of Miami law professor, said that if board members were getting “kickbacks and bribes” in exchange for awarding Carr the inflated salary, they could be subject to criminal charges. “You are either evil or stupid, the saying goes. It’s got to be one of the two.”

But Jansen, who represents a board member, said the board members were also not informed of all the financial arrangements of Carr’s compensation.

“Evidence will show that the some board members were deceived, manipulated, and kept in the dark,’’ he said. “(Florida Coalition Against Domestic Violence) board members received no salary and did not financially benefit in anyway from the serving on the board. They served for the pleasure of helping victims throughout the state of Florida.”

Hasty departures

One indication of the enormity of the crisis is the mass exodus of attorneys, public relations consultants and lobbyists from the Florida Coalition Against Domestic Violence after documents were turned over to Florida House investigators that revealed the extent of the scheme to award Carr compensation.

“That may be why people of good conscience have now refused to continue their representation,’’ Ravicher said. “Once they uncovered there was a fraud, were they being asked to cover up the original fraud? Maybe that’s why all these advisers and accountants and lawyers refused to stay involved — because they didn’t want to cover up a fraud.”

While the board has the authority to be the fiduciary authority over financial decisions, memos show that a small group of board members, the compensation committee, made annual offers to Carr detailing how much her bonus would be, how many hours of paid time off she would receive in cash and how many she could bank. It was up to her to reject them.

In a 2018 memo to the file, it notes that Carr declined the $200,000 cash bonus and instead accepted an $85,000 cash bonus with additional 64 paid time off days. She accept the offer to cash out 360 paid days off and bank another 260 days of paid time off.

The memo said Carr also “expressed extreme gratefulness for the provision to work in remote locations during warm months.”

‘Worse than anticipated’

Fernandez-Barquin said the details that have emerged show the situation is “much worse than I anticipated. This is just horribly worse,’’ he said. “And there’s nothing worse than misappropriating taxpayer money and taking it from a vulnerable population, like victims of domestic violence.”

Both the House and the governor’s inspector general have the authority to refer a criminal or civil complaint to the state attorney. Ashley Moody, the Florida attorney general, could also step in and convene a grand jury. But Ravicher, the University of Miami law professor, said he believes that it may be difficult for the state to get any of the money back.

“The problem is, the state has to admit it screwed up, too,’’ he said. “The state should not be handing out millions of dollars to employees without adequate oversight and diligence. So the state bears a lot of blame, too.”

After the Department of Children and Families ordered its audit in 2018 and the agency refused to turn over complete financial information, the governor and legislature approved a 2019-20 budget with no changes to the Florida Coalition Against Domestic Violence.

Before Holland & Knight resigned as legal counsel for the coalition on Feb. 12, it argued in defense of the Florida Coalition Against Domestic Violence that the state knew or should have known everything the coalition was doing and even promoted the work of the coalition.

“If they are withholding stuff, it is still the state’s fault,’’ Ravicher said. “The state should have confirmed it. No matter what the state tries to say, they make themselves look bad.”