Miami-Dade Commission on Ethics & Public Trust

Investigative Report
Investigator: Larry Lebowitz _ . - u
Case No.: Case Name: Xiques Date Open:
K13- 067
Lu
"
S 7 E
Complainant(s): S ubject(s): May 16, 2013
Anonymous Veronica Diaz (f/k/a
t ate:
Veronica Xiques)
Allegation(s):
An anonymous tip was received by the Commission on Ethics and Public Trust (COE) that an
assistant city attorney with the City of Miami was steering city work to her fianc's law firm.
Applicable Law:
Miami- Dade County Conflict of Interest and Code of Ethics ordinance:
Sec. 2- 11. 1(c) (1) prohibits public officials from transacting any business in which he or she or a
member of his or her "immediate family"has a direct or indirect interest.
Sec. 2- 11. 1 (d) prohibits public officials from entering into any contract or transacting any business
through a firm, corporation, partnership or business entity in which he or she or any member of his or
her immediate family has a direct or indirect controlling financial interest.
Sec. 2- 11. 1(b)(9), defines "immediate family"as spouses, domestic partners, parents, stepparents,
children and stepchildren of the public official. Sec 2- 11. 1(b)(12) defines "domestic partners" as
any persons who have formally registered their relationship as further described under the county's
anti- Discrimination codes at Sec. 11 A- 72 (b) (1- 4 and 6).
Sec. 2- 11. 1(g), prohibits a public official from exploiting their official position to secure special
privileges for himself, herself or others except as may be specifically permitted by other ordinances.
City of Miami, Code of Ordinances, Chapter 18, Article III, details the manner by which
procurements, including the hiring of professional services, are subject to transparent competitive
bidding and selection processes. With the exception of the Community Redevelopment Agencies, the
rules are supposed to apply for procurements secured by all city entities or boards, including the
quasi- independent authorities, departments and trusts.
The city attorney's office, however, is exempted by statute, at 18- 72 (b)(16): "This article shall not
apply to legal services coordinated by and through the office of the city attorney citywide, including,
but not limited to: attorney services, paralegals, expert witnesses, jury consultants, legal support
services, legal research, court reporters and stenographers. "
The code, at 18- 84, Methods of Source Selection, redundantly reinforces this exemption: "All
purchases of goods, including but not limited to supplies, materials, equipment, printed materials and
all purchases of services, including but not limited to personal, professional, management, technical,
contractual and general services needed by the city, but not including legal services, may be
obtained by contract or through city labor and materials shall be exclusively made in the manner set
forth in this article. "
Investigation:
Interviews
Keri Lynda Horvat (Horvat) is a lawyer with the Miami law firm Trujillo, Vargas, Ortiz &
Gonzalez LLC. From March 2011 to September 2013 she was a contract employee at a law
firm that has subsequently come to be known as Alvarez, Carbonell, Feltman & DaSilva PL of
Coral Gables (ACF&D). Horvat is an experienced real estate and commercial litigator, and holds
an active title insurance license. Since 2009, she has been the sole proprietor of Horvat Law Firm
PLLC, which primarily handles real estate closings connected with that title- insurance license.
On April 7, 2014, Horvat provided sworn testimony to the COE. Multiple e- mails, with
records and follow- up contextual explanations from Horvat, will be burned to a disc and
added to the file.
Aldo Bustamante (Bustamante), Real Estate Manager, City of Miami Department of Public
Facilities and Asset Management.
Bustamante was interviewed several times in May- June 2013, largely to secure production of
the city's master file on the project to expand the footprint of the former Coral Way NET
center and adapt it into a community center and playground with additional parking. A couple
of follow- up conversations occurred in 2014, largely for fact- checking purposes and to
complete the production of public records related to the successful purchase of two adjacent
parcels and the failure to acquire a third.
Bustamante was able to provide historic context as the project grew and morphed, how his
department routinely seeks legal services from the City Attorney's Office, and detailed
conversations regarding Horvat' s role in helping the city acquire the parcels.
2
Veronica Adriana Diaz (Diaz) (flia Veronica Xiques), is an assistant city attorney with the
City of Miami. She is currently on a leave of absence while pursuing an elected circuit Court
judgeship. When this file was opened in 2013, she was known professionally by her married
name, Veronica Xiques, but subsequently reverted to her maiden name prior to announcing
her candidacy for the bench.
This investigator had one brief phone conversation with Diaz in May 2013. At the time she noted
that Horvat was an eminently qualified title attorney who was doing excellent work ("She's a
kick- ass attorney. ") on the city's behalf in trying to untangle a messy set of circumstances to
clean up the titles and acquire the parcels in question. Diaz said she was aware that Horvat worked
at ACF&D, but said the city's contract was with Horvat Law Firm PLLC. To her knowledge,
Diaz said, ACF&D did not handle this type of real estate work. She described Alvarez as "my
boyfriend"- - - not fianc.
This investigator asked Diaz some general questions regarding the way the city hires outside
counsel. She confirmed that there is no rotating "wheel"or list of pre- qualified lawyers to conduct
specialized work on a rotating basis. "We just hire people we know are qualified,"she said. Diaz
mentioned that Horvat was hired under a boilerplate contract with a pre- set hourly rate. That
contract also caps the number of hours for a particular task. Diaz explained that the City Attorney's
Office is exempt from many of the procurement rules that must be followed by other departments,
agencies and quasi- independent authorities under city code and charter.
In the May 2013 conversation, she said the contract with HLF provides no benefit to ACF&D. She
also said at the time that she didn't believe there was a conflict of interest worth reporting to her
supervisors at the city attorney's office.
This investigator had a second brief phone conversation with Diaz in March 2014, asking primarily
for her files regarding the outside work she assigned to Horvat regarding an Opinion of Title for a
city- owned marina parcel at Watson Island. She agreed to forward her complete file on the Watson
Island title- opinion and a few outstanding documents needed to complete the file on the Coral Way
community center acquisitions. She responded with a series of e- mailed documents, all of which
will be burned to a disc most of her documentation on the Watson Island title- opinion contract
along with a few documents needed to complete the investigative file on the Coral Way community
center acquisitions. She responded with a series of e- mailed documents and added to the file.
Document/Audio/Video Review:
City public records, reports, emails, closing documents and contracts rearding the acquisition
of two parcels of land adjacent to the community center at 1300 SW 12 Ave. and the
unsuccessful attempt to acquire a third adjacent parcel.
03
Disc of all e- mails and attachments between this investigator and Horvat regarding her work
for the City of Miami in 2013 while she was employed at ACF&D.
The materials include HUD- 1 closing documents, invoices, bank statements and cancelled
checks indicating when Horvat received payment and then transferred her entire fee of $6,448
to ACF&D, per her verbal employment agreement with ACF&D.
The materials also include bank statements, cancelled checks and invoices related to her work
on a separate Opinion of Title on Watson Island, for which she was paid a $1,000 fee plus
$150 in expenses. During her delivery of the documents to this investigator, she discovered
that she under billed the city for another $195 that she paid to a title abstract vendor. She "ate"
those expenses. She kept the entire $1,000 fee for the Watson Island work because the city
paid her shortly after she was fired by ACF&D in September 2013.
Miscellaneous investigative notes from the early stages of the investigation before anyone was
interviewed.
These notes will include photographs of Diaz and Alvarez and other friends that were posted
(and subsequently deleted) from Facebook; Horvat's background, CV and other materials
found on Facebook and Linkedln; the state of Florida corporate record history for Horvat Law
Firm PLLC and the various permutations of the ACF&D law firm.
The files also include some public records confirm the marriages and divorces of Diaz and
Alvarez and some of the related litigation between Alvarez and his ex- wife and his former
father- in- law.
Conclusion(s):
Please refer to the attached 7-page memorandum dated June 10, 2014 (Exhibit A) for a
complete narrative history of the case, relevant facts, analysis and suggested
recommendations forwarded to the city auditor's office.
Diaz steered two complicated city legal assignments to Horvat dlb/a Horvat Law Firm PLLC.
[The first task, helping the city acquire a residential parcel tainted by title fraud and
foreclosure pressures, ultimately generated a fee of $6,448. The second task, requiring an
Opinion of Title for a marina site on Watson Island, so that sewer construction permits and
easements could be legally obtained, generated a fee of $1,000. ]
Horvat was employed at the time by a Coral Gables law firm headed by Diaz's live- in
boyfriend, Alvarez.
Horvat testified, under oath, that she had never met Diaz prior to receiving the first of these
two assignments for outside legal counsel from the city.
Horvat and her paralegal conducted most of the work on the city's behalf for Horvat Law
Firm PLLC while physically sitting inside the ACF&D offices in Coral Gables; Horvat used
ACF&D phones and faxes, and, at times sent e- mails to city officials and others involved in
the city real estate transaction from her ACF&D e- mail address.
Horvat testified, again under oath, that she learned of the impending first assignment from her
boss and Diaz's boyfriend, Alvarez. Under the terms of Horvat's employment agreement, she
was required to deliver the entirety of her fees for these two city jobs to ACF&D. She
transferred the $6,448 fee for the first city job to ACF&D in July 2013. Had she not been
abruptly fired by ACF&D in September 2013 before she received her $1,000 fee for the
second city assignment, Horvat would have been obligated to transfer that entire fee as well.
While there were legitimate reasons for the city to hire Horvat's solely owned affiliate firm,
Horvat Law Firm PLLC, for the first job, since it maintained all of the appropriate title
insurance licenses and escrow accounts, it served to obscure the fact that Horvat's firm would
ultimately be required to pass through the entirety of its fees to Alvarez's firm.
ANAL YSIS
This is one of those difficult situations where the appearance of impropriety is strong, but the
fact pattern isn't specifically covered under state anti- Nepotism statutes or the Miami- Dade
Conflict of Interest and Code of Ethics Ordinance.
It also illustrates one of the ways in which the legal definitions of "immediate family"have
not kept pace with the realities of modern families. Alvarez and Diaz have lived together
since at least November 2011, but are not married, nor have they filed to certify a domestic
partnership. It would also be difficult to present a case accusing Diaz of "exploitation of
official position"under the county code because the City of Miami procurement laws
specifically allow her to select any attorney of her choosing to do city work.
It should also be noted that Horvat received two complicated jobs, in quick succession, when
she was a contract employee of ACF&D and by all accounts; she performed admirably on the
city's behalf, especially in untangling the fraud- tainted title and foreclosures near the former
Coral Way NET Center.
It might be purely coincidental, but Horvat received no further work from Diaz or the city
since Horvat and her paralegal were fired by ACF&D in September 2013.
RECOMMENDATIONS
Given the difficulty in establishing "probable cause"to any possible charges that could be
brought before the COE, we forwarded a copy of the complete investigative file to the City
Auditor General, who has already been in contact with the City Manager's office and the City
Attorney's office regarding the factual summary detailed in the memo of June 10, 2014,
which is attached below. That memo lays out the fact patterns and recommends suggested
reforms.
Lawrence Le owitz, C nvestigator
5
Approved by:
~ A111 /(~~
Michael Murawski, Advocate

Miriam

Deputy General Counsel

7//&
'entorino, Executive Director

Date Closed:
Biscayne Building
19 West Flagler Street
Suite 820
Miami, Florida 33130
Phone: (305) 579-2594
Fax: (305) 579-2656
Memo
XBIT
To: Michael Murawski, Advocate
Theodore Cuba, Auditor General, City of Miami
Lewis Blake, Audit Manager, Office of the Auditor General, City of Miami
From: Larry Lebowitz, Investigator
Date: lOJune 2014
Re: K13- 067/Xiques
This report is being transmitted as part of an active, ongoing investigation, and, as-sueh-is
exempt from public disclosure under Chapter 119 of the Florida Statutes. EXEMPTION
LIFTED 17July 2014
ALLEGATION
An anonymous tip was received by the Commission on Ethics and Public Trust in May 2013
that an assistant city attorney was steering work to her fianc's law firm.
S UBJECTS
Veronica Adxiana Diaz, Florida Bar #569461, is an assistant city attorney with the City of
Miami. She is currently on a leave of absence while pursuing an elected circuit court
judgeship. When this file was opened in 2013, she was known professionally by her married
name, Veronica Xiques, but subsequently reverted to her maiden name prior to announcing
her candidacy for the bench. For the purposes of this report, she will be referred to as Diaz.
Benjamin Raul Alvarez, Florida Bar #175633, is a name partner in the law firm Alvarez,
Carbonell, Feltman & DaSilva PL of Coral Gables.
Keri Lynda Horvat, Florida Bar #107182, is a lawyer with the Miami law firm Trujillo Vargas
Ortiz & Gonzalez LLC. Between March 2011 and September 2013 she was a contract
employee at the Alvarez Carbonell law firm. She is an experienced real estate and
commercial litigator, and, since 2009, the sole proprietor of Horvat Law Firm PIi1C.
0 Page 1
FACTS
Established relationship
According to public records, Diaz and Alvarez have cohabitated since at least November
2011. In a brief conversation with this investigator in May 2013, Diaz referred to Alvarez as her
boyfriend, not her fianc.
Diaz's marriage was dissolved in 2008. Even though she continued to use her married name
(Xiques) in professional settings, including her employment at the Miami City Attorney's
Office, in November 2011 a Florida Driver's License was issued in her maiden name, Veronica
Adriana Diaz, listing the same address as Alvarez - 830 Lugo Ave. , Coral Gables. Diaz
renewed the driver's license, in the same name and at the same address, in December 2013.
Alvarez has owned the waterfront home on Lugo Avenue since August 2009, but only took sole
possession of the homesteaded property in February 2014 after an extremely contentious
divorce and a series of subsequent civil litigations involving his ex- wife and former father- in-
law. Alvarez filed for divorce from his ex- wife in March 2011; it was dissolved in May 2012.
Other public records are available tying Diaz to the same address as Alvarez and additional
witness testimony could be developed, if necessary, to further confirm their relationship.
The first contract: Expanding the Coral Way NET center
The city- owned property at 1300 SW 12 Ave. , which had been used as the Coral Way
Neighborhood Enforcement Team ("NET") center for several years, was damaged by fire in
the mid- 2000s. Shortly after he was elected, Commissioner Frank Carob, who represents the
Little Havana district, started pushing city administrators to use federal Community
Development Block Grant ("CDBG") funds to rehab and repair the existing building for a
community center with a small park, playground equipment and expanded parking.
The city purchased a condemned, bank- owned home, at 1320 SW
12th
Ave. , a narrow parcel
directly behind the NET Center, for $32,000 in September 2011. (Folio# 0 1- 4138- 008- 0140;
Deed of Sale is Consumer Solutions REO LLC, to City of Miami, ORB 27905/940; relevant city
resolutions: R- 1 1- 0291 and R- 1 1- 0287).
Carollo pushed the Regalado administration and the Public Facilities department to further
expand the footprint for the envisioned community center and park. At the commissioner's
urging, Public Facilities targeted two adjacent parcels to the south in an attempt to "square
off"the block between Southwest 13th and 14th Streets.
This turned into an incredibly complicated task, according to various city records, emails and
interviews with Aldo Bustamante, Real Estate Manager at Public Facilities and Asset
Management, and in sworn testimony from Horvat.
One of the targeted parcels, a single- family home at 1330 SW 12th Ave. , (Folio# 01- 4138- 008-
0150), was facing foreclosure in 2012. Through a broker, owners Jesus Ramirez and Kathy
Rivera indicated they were amenable to a short- sale. In October 2012, the city tentatively
offered to buy the Raniirez- Rivera home for the full asking price of $270,000. Under the offer
sheet terms, the seller was responsible for any costs accrued to provide clean title.
0 Page 2
In late 2012, Public Facilities submitted a Legal Services Request ("LSR") to the City Attorney's
Office to help with the closing. The request was funneled to Diaz, who was responsible for
most of the Real Estate and Public Facilities work generated by the department. Records
indicate Diaz received approval from her supervisors, including then- City Attorney Julie Bru,
to engage Horvat Law Firm PLLLC ("HLF") as outside counsel (see Prolaw File 12- 2586). Diaz,
signing on Bru's behalf, sent Horvat an engagement letter dated Jan. 9, 2013 that allowed HLF
to charge the standard rate, $235- per- hour, but capping the fees at $1,500. Horvat signed the
contract on Jan. 22, 2013.
What the city didn't know at the time - and which nobody appears to have disclosed - - - HLF
was required to transfer its entire fee to the law firm run by Diaz's live- in boyfriend, Alvarez,
under the terms of Horvat's employment arrangement with Alvarez Carbonell.
Horvat was hired as a contract employee by an earlier incarnation of the Alvarez Carbonell
firm in March 2011. She testified she was paid a base salary and received some health- care
benefits, but was responsible for paying her own payroll, Medicare and Social Security taxes
similar to any contractor reporting their income to the Internal Revenue Service on Form 1099.
Horvat was an attractive hire for Alvarez Carbonell at the time, in part, because she had an
extensive track record in complicated litigation and real- estate closings, and owned an active
title- insurance brokerage license with Attorney's Title Fund.
According to Horvat, at the time of her hire, Alvarez Carbonell had recently lost its affiliation
with the title fund. Some of the allegations, laid out in civil litigation, involved the improper use
of the firm's escrow account and failure to pay $50,000 in proceeds to the proper party after a
closing. [This investigator did not independently verify any of the sworn testimony regarding
Alvarez Carbonell's loss of the title insurance license and the related civil litigation]
Horvat testified that under the terms of her employment arrangement with Alvarez Carbonell,
all fees she generated would benefit the firm - - - even those generated by her solely owned
affiliate, HLLF, as long as the work was brought or assigned to her by Alvarez Carbonell. She
provided bank statements verifying several independent examples where she handled a
closing as HLF and then transferred the proceeds from her I- ILF escrow account to an HLF
operating account and then wrote a check for the full amount due to Alvarez Carbonell.
Even though there were several name partners, according to Horvat's sworn testimony, she
was under the belief that Alvarez was the sole owner of the business, and, as such, was the
sole beneficiary of all of the profits generated from the work she, and others, performed at the
firm. [While this testimony might illuminate the mixing of personal and professional business
between Diaz and Alvarez, these law firm ownership issues were not independently verified
because they weren't relevant to the primary investigation].
Horvat testified that she had never met Diaz prior to her hiring by the City of Miami, but knew
that Alvarez and Diaz were involved in a personal relationship. Horvat also testified that she
learned from Alvarez that she had been hired by the city to handle this specific job; Alvarez
told Horvat she would be receiving an imminent phone call from Diaz with the details.
As the city soon discovered, thanks in large part to the work by Horvat, any potential short-
sale of the Ramirez- Rivera home at the corner of Southwest 12th Avenue and 14th Street, was
going to be complicated by potentially fraudulent title problems that had occurred on the
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other single- family home that the city was hoping to acquire at 1211 SW 14
th
St. (Folio# 01-
4138- 008- 0150).
According to Horvat's sworn testimony and supporting city documents, Berta Garcia, the
owner of 1211 SW 14th St. , had executed a series of suspicious quit- claim deeds in the mid-
2000s with two intended purposes: To forestall a possible bank foreclosure, and to declare
sole ownership of the home alter her estranged husband fled the US and became a fugitive
an- Lid criminal allegations. At least one of the quit- claim deeds, created by a lawyer working
for Garcia, listed the wrong legal description for the Garcia home, somehow copying the legal
description for the neighboring Raniirez- Rivera home at 1330 SW 12th St. that the city was
trying to acquire. This inaccuracy was further exacerbated a few years later when Garcia's
mortgage lenders at Bank of New York foreclosed on the home - and used the wrong legal
description from the last quit- claim deed in the court proceedings.
Horvat spent several months working with the banks and the courts to unwind and nullify the
bank foreclosure on the Garcia property. This, in turn, allowed Horvat to provide an opinion of
clean title to the title insurance company for the city's intended purchase of the Ramirez-
Rivera home.
[After identifying and cleaning up the fraudulent title, and allowing Garcia to regain control of
her foreclosed home, the city attempted to acquire the property. According to Horvat's sworn
testimony, plus records and interviews with Aldo Bustamante at Public Facilities, the city
eventually abandoned the effort to acquire the property because Garcia and her
representatives kept raising prices. She sold it to private investors in October 2013].
Horvat ultimately submitted an invoice for 27. 6 hours of legal work - generating a total fee of
$6,486. Of that total, 6. 7 hours, or $1,574. 50, was billed to the city as "Buyer's Title Work"and
20. 9 hours, or $4,911. 50, was billed to the sellers and their lenders to cure the "Seller's title
defect. "Most of these fees are clearly delineated, as well, on the HUD- 1 closing statements.
The sale closed June 27, 2013.
According to Horvat's sworn testimony, alter paying all of the appropriate taxes, recording
fees and costs to messengers, paralegals, surveyors, inspectors, the title insurance company
and the seller's broker, HLF wound up with $6,884 in net proceeds from the closing. On July 2,
2013, she wrote a check on the HLF operating account to Alvarez Carbonell for the exact same
amount - - $6,884. HLF bank records indicate the check cleared on July 8, 2013.
The S econd Contract: Watson Island Opinion of Title
In late 2012, the Public Facilities department submitted another LSR through Diaz seeking an
opinion of title on a piece of city- owned land at 1099 MacArthur Causeway that is occupied by
the Miami Outboard Club under the terms of a 20- year lease ratified by the city in 1996. (See
Prolaw file 13- 057). The club was under pressure for a long overdue upgrade from septic to
sewer and the city needed to provide a clean opinion of title and an easement to the county
Department of Water and Sewer in return for the upgraded service.
Title at Watson Island is convoluted due to numerous takings and conveyances dating back to
the early part of the 20th Century between the federal government, the State of Florida, the
City of Miami and other entities with land- based and submerged interests in the area.
Pleased with the work that Horvat had performed on the Coral Way NET center acquisitions, in
late May 2013, Diaz, with the approval of then- City Attorney Bru, hired ELF to provide the
0 Page 4
Opinion of Title so the outboard club could pay impact fees and complete the work, and the
city could convey the sewer easement to the county.
Diaz sent Horvat a boilerplate engagement letter insuring that HLF would receive a $1,000 flat-
fee plus expenses for the Opinion of Title. FILF performed the work and delivered the opinion
in an 88- page report dated July 12, 2013.
HLF invoiced the city for the $1,000 fee and an additional $150 in title abstract expenses for a
total payment of $1,150. During her delivery of documents to this investigator and in
subsequent sworn testimony, Horvat discovered that she actually paid the title abstract
vendor $345 for the work performed, so she "ate"the extra $195 in expenses that she failed to
bill the city under the terms of her contract.
It should also be noted for the record, that unlike the first contract, where she passed through
the entirety of her $6,448 fee to Alvarez Carbonell, Horvat did not share her $1,000 fee for the
Watson Island title opinion because she received her payment shortly after she and her
paralegal were fired by Alvarez Carbonell in September 2013.
Otherwise, she testified, she would have been obligated to pass the proceeds of that fee to
Alvarez Carbonell as well.
Horvat testified that she has received no other work from Diaz, or anyone else at the city, since
she was forced to leave Alvarez Carbonell.
Contacts with Veronica Diaz
This investigator had one brief phone conversation with Diaz in May 2013. At the time she
noted that Horvat was an eminently qualified title attorney who was doing excellent work
("She's a kick- ass attorney") on the city's behalf in trying to untangle a messy set of
circumstances to clean up the titles and acquire the parcels in question. Diaz said she was
aware that Horvat worked at Alvarez Carbonell, but said the city's contract was with Horvat's
firm, HLF. To her knowledge, Diaz said, Alvarez Carbonell did not handle this type of real
estate work. She described Alvarez as "my boyfriend"- - - not fianc.
This investigator asked Diaz some general questions regarding the way the city hires outside
counsel. She confirmed that there is no rotating "wheel"or list of pre- qualified lawyers to
conduct specialized work on a rotating basis. "We just hire people we know are qualified,"
she said. Diaz mentioned that Horvat was hired under a boilerplate contract with a pre- set
hourly rate. That contract also caps the number of hours for a particular task. Diaz explained
that the City Attorney's Office is exempt from many of the procurement rules that must be
followed by other departments, agencies and quasi- independent authorities under city code
and charter.
In the May 2013 conversation, she said the contract with HLF provides no benefit to Alvarez
Carbonell. She also said at the time that she didn't believe there was a conflict of interest
worth reporting to her supervisors at the City Attorney's Office.
If we were to pursue this matter further, this investigator would want to ask Diaz, under oath,
whether she ever disclosed that the work she contracted would ultimately benefit the law firm
owned by her live- in boyfriend, Alvarez.
0 Page 5
This investigator had a second brief phone conversation with Diaz in March 2014, asking for
most of her documentation on the Watson Island title- opinion contract along with a few
documents needed to complete the investigative file on the Coral Way community center
acquisitions. She responded with a series of emailed documents.
APPLICABLE COUNTY AND CITY S TATUTES
Under IVlianii- Dade County's Conflict of Interest and Code of Ethics ordinances, Sec. 2- 11. 1(c)
(1) prohibits public officials from transacting any business in which he or she or a member of
his or her "immediate family"has a direct or indirect interest. Sec. 2- 11. 1(d) prohibits public
officials from entering into any contract or transacting any business through a firm,
corporation, partnership or business entity in which he or she or any member of his or her
immediate family has a direct or indirect controlling financial interest. The county code, at
Sec. 2- 11. 1 (b)(9), defines "immediate family"as spouses, domestic partners, parents,
stepparents, children and stepchildren of the public official. At 2- 11. 1(b) (12) the code defines
"domestic partners"as any persons who have formally registered their relationship as further
described under the county's anti- Discrimination codes at Sec. 11 A- 72 (b) (1- 4 and 6).
Under Sec. 2- 11. 1(g), public officials are prohibited from exploiting their official position to
secure special privileges for himself, herself or others except as may be specifically
permitted by other ordinances.
Most City of Miami procurements, including the hiring of professional services, are subject to
transparent competitive bidding and selection processes detailed in Chapter 18, Article III, of
the city code. With the exception of the Community Redevelopment Agencies, the rules are
supposed to apply for procurements secured by all city entities or boards, including the
quasi- independent authorities, departments and trusts.
The city attorney's office, however, is exempted by statute, at 18- 72 (b)(16): "This article shall
not apply to legal services coordinated by and through the office of the city attorney citywide,
including, but not limited to: attorney services, paralegals, expert witnesses, jury consultants,
legal support services, legal research, court reporters and stenographers. "
The code, at 18- 84, Methods of Source Selection, redundantly reinforces this exemption: "All
purchases of goods, including but not limited to supplies, materials, equipment, printed
materials and all purchases of services, including but not limited to personal, professional,
management, technical, contractual and general services needed by the city, but not
including legal sewices, may be obtained by contract or through city labor and materials
shall be exclusively made in the manner set forth in this article. "
ANALYS IS
This is one of those difficult situations where the appearance of impropriety is strong, but the
fact pattern isn't specifically covered under state anti- Nepotism statutes or the "conflict of
interest"or "exploitation of official position"sections of the county code.
It also illustrates one of the ways in which the legal definitions of "immediate family"have not
kept pace with the realities of modern families. Alvarez and Diaz have lived together since at
least November 2011, but are not married, nor have they filed to certify a domestic
partnership. The only reason a complaint is not being filed under the anti- Nepotism
provisions of the county code is because "fianc"or "long- term, live- in boyfriend"are not
included in the definitions of what constitutes an "immediate family"member.
0 Page 6
It would also be difficult to present a "slam- dunk"case accusing Diaz of "exploitation of
official position"under the county code because the City of Miami procurement laws
specifically allow her to steer the work to any attorney of her choosing.
This is particularly ironic given that one of her duties as an assistant city attorney is to act as
legal adviser to city departments, agencies, boards and selection panels as they try to
navigate the complicated competitive- bidding and proposal- ranking processes and the Cone
of Silence ordinances.
It should also be noted that Horvat received two complicated jobs, in quick succession, when
she was a contract employee of Alvarez's law firm. And by all accounts, she performed
admirably on the city's behalf, especially in untangling the fraud- tainted title and foreclosures
near the former Coral Way NET Center.
It might be purely coincidental, but Horvat received no further work from Diaz or the city
since Horvat and her paralegal were fired by Alvarez Carbonell in September 2013. It should
also be noted that Horvat and her paralegal were immediately hired by a competing firm - -
Trujillo Vargas - that was created by several disillusioned partners as they left Alvarez
Carbonell.
RECOMMENDATIONS
Given the difficulty in establishing "probable cause"to any possible charges that could be
brought before the Commission on Ethics and Public Trust, we are recommending that a copy
of this complete investigative file be forwarded to the City Auditor General, the City
Attorney's Office and the City Manager to lay out the fact- pattern and suggest likely reforms.
These would include:
Making the City Attorney and City Manager aware that a staff attorney was
steering outside legal work to a law firm owned by the staff attorney's live- in
boyfriend;
Asking the City Auditor General to investigate, on a broader scale, whether
additional contract work is being steered to friendly or preferred members of the
legal community, especially in cases where there are plenty of qualified
providers available who could compete for non- specialized tasks such as real
estate closings, opinions of title, etc. ;
Asking the Auditor General to urge the City Attorney and the City Manager to
create a centralized database of Legal Services Requests that can be easily
tracked and audited;

Recommending that the City Attorney's Office consider narrowing the codified
exemption in the procurement code in an attempt to create a "wheel"system that
evenly distributes routine outside work to a previously qualified panel of legal
providers;

Recommending that the City Attorney's Office strengthen internal policies, and
restructure its office forms, including the LSRs, so that staff attorneys are required
to declare and document potential conflicts of interest to their supervisors while
protecting attorney- client privilege.
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