Wellington - Mayor Bob Margolis accepted $6,500 in contributions toward a legal defense fund from two prominent opponents of the controversial expansion of Wellington’s $120 million equestrian industry, an apparent violation of ethics laws.
State law prohibits public officials from accepting gifts of more than $100 from lobbyists and companies or people employing lobbyists.
Hirsch directed a group that lobbied against a proposed $100 million equestrian complex. And McCullough’s attorney lobbied the village council against decisions it made in favor of the Winter Equestrian Festival.
Hirsch said he didn’t know the state’s gift-giving rules limited his contribution to $100. McCullough didn’t return repeated calls for comment. Margolis, too, didn’t return calls.
The gifts raise thorny ethical issues, experts in finance and elections law say.
“Was that money as a reward for having spoken to the person?” asked Ben Kuehne, a Miami election lawyer who represented Al Gore during the 2000 presidential recount. “Even if it’s totally legitimate, it smacks of special favoritism, of some unprincipled exercise of power.”
Neither officials from the Florida Commission on Ethics nor the Palm Beach County Ethics Commission would comment on the gifts or whether they are investigating them, although a county ethics officer in November notified Margolis he wanted to discuss one of the mayor’s gift disclosure forms.
Margolis filed two quarterly gift disclosure forms this year, one listing a $4,000 check from McCullough, the other listing a $2,500 check from Hirsch.
Both donors own property next to equestrian sites owned by Mark Bellissimo, the biggest developer of equestrian events in Wellington, and have opposed their expansion and commercialization.
According to gift disclosure documents, the money went toward a “legal expense fund trust” Margolis set up after the March elections, when a technical malfunction assigned the wrong vote totals to several candidates, including Margolis. Final results showed Margolis would have prevailed either way, but he still hired a lawyer to defend his win.
State law says cash donations to legal defense funds are considered gifts. And state and county gift laws prohibit elected officials from accepting gifts of more than $100 from lobbyists — including partners, employers or principals of lobbyists — who have in the past year tried to influence the decision-making of the government officials to whom they’re giving money.
Former County Commissioner Mary McCarty ran afoul of the rules in 2003, when she accepted more than $20,000 in cash from developers and businesses courting favor from the commission. She, too, took the gifts for a legal defense fund. The Florida Commission on Ethics fined her $3,750 in 2005 to settle her violations.
When he wrote the check, Hirsch was a director for Wellington Equestrian Preservation Alliance, which lobbied the village council and whose executive director is a registered lobbyist. That same lobbyist, Mat Forrest, was also a director of the non-profit company, as Hirsch was, according to Florida secretary of state records.
When asked whether he considered himself a lobbyist, Hirsch responded: “I resigned from Wellington Equestrian Preservation Alliance, if that’s what you’re referring to.” Hirsch did resign — but not until June 8, several weeks after he gave his gift.
Hirsch also owns Players Club, a restaurant that shares a border with the Equestrian Village site. In that capacity, he opposed the project, too.
McCollough’s attorney, Janna Lhota, is a registered lobbyist with Wellington and has lobbied the village council on behalf of McCullough. McCullough herself, meanwhile, is registered as someone who employs lobbyists, Lhota among them.
“The question is always: Are you either directly or indirectly attempting to influence government policy” and are you compensating an elected official to that end, said Bob Jarvis, a constitutional law professor at Nova Southeastern University.
To put the contributions in context, it helps to look back a year and highlight a common thread: Bellissimo. He heads the Winter Equestrian Festival and a team of developers who want to build a project called the Equestrian Village, a massive complex originally estimated to cost $100 million and include hotels, shops and arenas.
In February, under a previous council, Bellissimo got the approvals he needed to build Equestrian Village with its commercial bells and whistles. But some in Wellington weren’t happy with that. The project was too big and too wild, they complained.
The loudest and most powerful objectors were members of the billionaire Jacobs family, who own an estate near the project. They incorporated a group, Wellington Equestrian Preservation Alliance, which lobbied the council to reject the project. They hired lawyers and filed lawsuits. And their companies paid for a $500,000 campaign to unseat the former mayor — who was running for reelection — and put Margolis on the dais.
That campaign also helped get two other council members elected, both of whom weren’t happy with the Equestrian Village. That meant a majority of the five-member council, including Margolis, had ties to Bellissimo’s opponents.
Bellissimo soon was before the new council because he missed a deadline. Citing the lapsed deadline, the new council, Margolis included, voted to revoke two previous approvals for the equestrian project, essentially dismantling it.
The contribution from Hirsch came before the votes.
Specifically, Margolis deposited Hirsch’s $2,500 check on May 21. The next day the council voted to revoke the Equestrian Village’s master plan, the project’s zoning framework. Two months later, on July 10, the council voted to revoke the previous council’s approval for the dressage arena, again prompted by a deadline Bellissimo missed.
Margolis didn’t mention the cash contribution during any of the hearings.
As far as McCullough, she, like Hirsch, opposed the Equestrian Village project. She also opposed approvals the previous council granted Bellissimo related to his Winter Equestrian Festival, a major event his team has produced for several years.
In December 2011, she sued Wellington, saying the council never should have granted approvals for the site of the Winter Equestrian Festival. That land is known as Country Place PUD. Her attorney, Lhota, argued successfully in May before the new council, with Margolis as mayor, that a rare rehearing was necessary.
The day-long rehearing took place on July 17, though the result wasn’t what McCullough wanted: The new council unanimously found no legal basis to stamp out the previous council’s approval. Before the hearing, Margolis disclosed that he had spoken with McCullough and her representatives.
Five days later, on July 22, McCullough wrote Margolis a $4,000 check, his legal defense disclosure filing showed. One of McCullough’s lawsuits is pending, and a judge disposed the other in September.
Bellissimo said he considered the donations inappropriate: “It’s a personal gift.”
Both contributions could pose problems beyond gift-giving laws, said Miami election lawyer Kuehne.
Typically legal defense funds are set up as soon as a legal fight looms. Margolis knew he’d won the election on March 30, when the hand recount took place. He didn’t record a single deposit until May 17, followed by Hirsch’s deposit on May 21. He raised $7,600 through Aug. 31.
Margolis’ gift disclosure filings do not indicate that any of the money has been spent.
“After-the-fact creation is considerably troublesome,” Kuehne said. “It is very difficult to administer and to assure funds raised are used for the limited purposes for which the contributions were supposedly raised.”
A senior investigator for the county ethics commission in November sent an email to Margolis saying he wanted to discuss a gift disclosure form the mayor had filed.
“I can’t confirm or deny anything at all,” said Alan Johnson, the ethics commission’s executive director.
Legal defense funds fall into a gray area.
The Florida Division of Elections has no laws governing them. The Florida Commission on Ethics doesn’t either. Anyone can open one, not just elected officials.
Federal tax rules apply, but IRS codes say the money is not limited to legal expenses because it’s a gift.
Inevitably, questions creep up over what to do with leftover legal fund contributions. Returning it is the best option, Jarvis said.
“It’s pretty clear that most of the time politicians don’t give back the money,” Jarvis said. “The reality is … they find another purpose.”
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