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Illegal house rental nets Clearwater lawyer $46,000 fine; she blames attention from Scientology

The house, at 302 Cedar St., had been rented out dozens of times and is now the focus of a criminal trial. The battle began after the owner allowed an ex-Scientologist to use the house for a 2013 wedding. A neighbor, who is a Scientologist, then made multiple complaints to the city.
The house, at 302 Cedar St., had been rented out dozens of times and is now the focus of a criminal trial. The battle began after the owner allowed an ex-Scientologist to use the house for a 2013 wedding. A neighbor, who is a Scientologist, then made multiple complaints to the city.
Published Oct. 4, 2016

CLEARWATER — The sun was about to set on a July evening in 2013 when Betsy Steg heard a knock at the door.

She peered out her front window and wondered how two uniformed Scientologists got the code to her gated cul-de-sac in Harbor Oaks, an affluent neighborhood overlooking the Intracoastal Waterway.

As Steg opened the door, church official Peter Mansell delivered a warning.

"He said, 'You're an enemy of the church and we're going to harm and destroy you,' " Steg recalled.

Steg closed the door, her heart pounding. But the knock, she said, was a cue she had become the target of Scientology's well-known intimidation tactics used to punish former members, journalists, defectors and others who offend the church.

She began worrying every mishap was a veiled threat, including a stranger who inexplicably cut down privacy bushes last year in front of her guest house at 302 Cedar St.

For the past three years, a Scientologist who lives next door to that Cedar House complained to the city about the home being rented by the week in violation of Clearwater's short-term rental ban.

The city never verified the neighbor's allegations, but used her word to hand Steg the stiffest fine for short-term renting in Clearwater history: $46,500.

Steg admits she broke the law, but said her illicit business went undisturbed until she angered the wrong people.

In a statement to the Tampa Bay Times, church spokesman Ben Shaw said, "It appears that Ms. Steg's regret is not that she violated the city code for a decade, but rather that she was caught and that a concerned citizen whose personal faith happens to be Scientology acted responsibly in reporting the matter to the city."

• • •

Steg, a former assistant Pinellas County attorney of 18 years, didn't know much about Scientology until she began reading investigative reports on the church's alleged abuses in 2009.

Living near the international spiritual headquarters raised her interest. She left comments and legal input on an anti-Scientology blog, calling herself "ClearwaterLawyer."

The comments caught the eye of Mike Rinder, Scientology's former top spokesman and now defector. He and Steg became friends

Rinder used Cedar House for his June 2013 wedding. The waterfront estate, with a private beach and pool overlooking Clearwater Harbor, has nine bedrooms and two kitchens.

Two days after the wedding, Ken Kramer of the Citizens Committee on Human Rights, a church-supported organization, made a public records request to the city for emails with one keyword: "Steg."

A month later came the knock at the door.

• • •

The city received the first anonymous complaint about Steg's house in August 2013. The tipster said it was operating as a bed and breakfast, in violation of an ordinance prohibiting residences from being rented for less than one calendar month.

Weeks later church member Jamie Blackstone, who has lived next door to the Cedar House since 2007, emailed the city saying the "weekly rental was a MESS with weeds and overgrowth."

"It is best you keep me out of it as I don't need bad relations with my neighbors," she wrote.

Although Blackstone tipped the city, her own relatives enjoyed the illegal vacation home.

In the same month the complaints took off, Blackstone's daughter-in-law booked the house for five days through VRBO.com, emails show.

In November, Steg reminded then-police Maj. Dan Slaughter, now chief, about the complaint she made against the Scientologists who knocked on her door.

Slaughter said he spoke to Sarah Heller, the church's legal director.

"The conduct was not a criminal offense, but I stressed to Ms. Heller how the described act could be construed as antagonistic," Slaughter wrote to Steg. "I requested that they refrain from taking this kind of action."

In the church's statement to the Times, Shaw said "when it was discovered that Ms. Steg was actually assisting Mike Rinder and others in their anti-Scientology harassment, Mr. Mansell believed it incumbent to have the truth about Ms. Steg revealed to the Scientologists concerned."

Prompted by the complaints, then-code inspector Peggy Franco created a fake email account in October 2013 to inquire about renting the Cedar House. Steg took the bait, and the city issued her a warning.

In July 2014, the city fined Steg $4,100.

She then leased the house for two years in September 2014 to Charmene Prescott.

Meanwhile, complaints from Blackstone continued. The city fined Steg $500 in December 2015 after a city investigator posed as a tourist and secured a seven-night rental agreement with Prescott.

In March, Blackstone provided the city with a litany of renters she observed over 93 days.

She signed an affidavit, but almost none of the examples included enough information for the city to corroborate.

In one citation, Blackstone said players from a collegiate soccer team in Missouri rented the home for four days in September — Central Methodist University spokesman Kent Propst told the Times the team never played in Florida that year.

Steg's attorney, Chris Tanner, tried to poke holes in the affidavit and told the board Prescott, who could not be reached for this article, was responsible for the home.

The board showed no mercy, fining Steg $46,500.

In a statement to the Times, Blackstone's attorney, Steven Hayes, said his client was simply acting as a responsible neighbor.

"None of Ms. Blackstone's civic actions were 'directed' by the Church or anyone else, as you suggest, nor did they have any other purpose than to be a good neighbor and responsible citizen," Hayes said.

• • •

While Steg battled complaints, a stranger appeared at Cedar House and destroyed $4,800 worth of privacy bushes.

Steg's handyman, Bob Covington, another prominent Scientology defector, witnessed the act one day in July 2015. Steg raced down to confront Arthur Keele, 71, who told her he was cutting hedges for a city program.

He called his actions "good samaritan efforts," according to a police report.

Prosecutors charged Keele with felony criminal mischief.

Still, he kept coming near the Cedar House.

In February, Steg told a judge Keele watched the property from another neighbor's home.

"We are very worried about this," she wrote to the judge, prosecutor and public defender.

Keele was slated to stand trial this month, but the public defender requested a delay to question Steg. Keele declined multiple requests to comment.

The Times could not find a link between Keele and Scientology. But the church goes to great lengths to surveil its enemies. For 18 months private detectives tracked every move made by the father of Scientology leader David Miscavige. They eavesdropped, spied on his emails and planted a GPS unit on his car.

Keele is scheduled for trial on Dec. 6. Steg says any plea deal must include an explanation of why he destroyed her property.

• • •

Steg appealed her $46,500 fine. But the violations have not ended there.

The city mailed a notice of violation Aug. 4 for continuing to advertise the Cedar House as a short- term rental online in the weeks after receiving the record-breaking fine. Steg was scheduled to go before the code enforcement board Sept. 28, but the case was pulled days before.

Tanner said city officials did not explain why the case was removed but that it could go before the board this month.

The most recent violations were found by city inspectors sleuthing rental websites and were not a result of tips from Blackstone, said Terry Teunis, code compliance director.

Before the July case goes to an administrative judge, Teunis said his staff is combing through Blackstone's affidavit to verify real visitors stayed in the house on the dates she testified.

The city did no such checking before imposing the $46,500 fine.

"I had no reason to dispute her testimony," Teunis said. "We have an obligation to enforce our laws."

Staff researcher Caryn Baird contributed to this report. Contact Tracey McManus at tmcmanus@tampabay.com or (727) 445-4151. Follow @TroMcManus. Contact Mark Puente at mpuente@tampabay.com or (727) 892-2996. Follow @MarkPuente.

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