Federal law enforcement agencies have
launched a criminal investigation into the use of American Express cards
issued by the Republican Party of Florida to elected officials and
staff, according to sources familiar with the inquiry.
The U.S. Attorney's Office in Tallahassee, the FBI and the Internal
Revenue Service are all involved in the inquiry, which grew out of the
state investigation into former House Speaker Ray Sansom. He was
indicted on criminal charges that he stashed $6 million in the state
budget for an airplane hangar for a friend and campaign donor.
In the federal case, Sansom and others could be charged with making
false statements on their tax returns and tax evasion stemming from
hundreds of thousands dollars in charges on party credit cards.
A spokeswoman for the Republican Party of Florida, Katie Betta, said
she could not confirm the investigation nor make any comments. Coming
in a high-stakes election year, the investigation could expose the
inner-workings of a party that has dominated state government and raked
in millions of dollars from lobbyists and special interests.
Meanwhile, in a separate inquiry, the IRS is also looking at the tax
records of at least three former party credit card holders — former
Florida House Speaker Marco Rubio, ex-state party chairman Jim Greer and
ex-party executive director Delmar Johnson — to determine whether they
misused their party credit cards for personal expenses, according to a
source familiar with the preliminary inquiry.
Political parties, which are tax exempt, are allowed to spend money
only on political activities, such as fundraising, running campaigns and
registering voters. While it's commonplace for party officials and
politicians to wine and dine donors, the Florida party allowed credit
card holders to rack up hundreds of thousands of dollars in charges with
little oversight.
The IRS opened the so-called "primary'' investigation into Rubio,
the leading Republican candidate for Florida's open U.S. Senate seat,
and the two former state GOP officials to see if there's enough evidence
to support a full-fledged criminal inquiry, according to a source
familiar with the IRS examination.
Rubio campaign adviser Todd Harris said Tuesday that the former
lawmaker from Miami has not been contacted by any federal investigators.
"There is absolutely nothing to this,'' he said. "Anyone who is
looking into it or investigating will quickly come to the same
conclusion.''
At this stage of the IRS investigation, agents are looking at
federal tax records, state financial disclosure forms and other
documents to see whether Rubio, Greer and Johnson may have personally
benefited from using their GOP American Express cards without reporting
or paying taxes on additional income.
"They would be interested in pursuing a case if the amount of money
was big and it was being spent on people and things that were prohibited
under the GOP's structure,'' said Jose I. Marrero, former special agent
in charge of the IRS's South Florida office.
The party stopped issuing credit cards last year after Greer cut up
his own American Express card at a party meeting to try to quash the
uproar over spending.
Rubio billed the party for more than $100,000 during the two years
he served as House speaker, according to credit card statements obtained
by the
St. Petersburg Times and
Miami Herald. The charges
included repairs to the family minivan, grocery bills, plane tickets
for his wife and purchases from retailers ranging from a wine store near
his home to Apple's online store. Rubio also charged the party for
dozens of meals during the annual lawmaking session in Tallahassee, even
though he received taxpayer subsidies for his meals.
Rubio said the billings all related to party business — the minivan,
for example, was damaged by a valet at a political function — and that
he repaid the party for about $16,000 in personal expenses.
Asked during his campaign bus tour last week if he needed to amend
his tax returns to reflect any party money that covered his personal
expenses, Rubio said, "We don't believe it's income. It's not. . . .
Whatever the law is, we're going to comply, but I don't think it's
income.''
Greer, who was forced to resign in January amid allegations that he
misspent party money, said of the IRS inquiry, "I paid all my taxes and
did everything my accountant told me to do.''
Johnson referred questions on Tuesday about the IRS inquiry to his
attorney, Bob Leventhal, who could not be reached. His credit card
statements, which were obtained by the
Times/Herald, included chartered planes, lavish meals and golf outings.
Greer and Johnson are at the center of a Florida Department of Law
Enforcement investigation into a secretly formed consulting business
that reaped $200,000 from the party. Greer, in turn, has filed a lawsuit
against the party that says it reneged on a $124,000 severance deal
that also would have absolved him of any financial wrongdoing. Greer was
replaced by state Sen. John Thrasher of St. Augustine in a special
election. Thrasher signed the secret agreement with the chairman along
with incoming Senate President Mike Haridopolos and House Speaker Dean
Cannon.
Cannon charged about $200,000 in 2008 and 2009, of which he
identified more than $3,000 in personal expenses. He reimbursed the
party after his American Express card statements were disclosed in the
press.
Haridopolos billed only $2,400 during the three months he had a
party American Express — most of it on food for fundraising events in
his hometown.
Rubio's struggling rival for the U.S. Senate, Gov. Charlie Crist,
has seized on the former lawmaker's credit card spending to try to raise
questions about his integrity.
Rubio acknowledged in February that he double-billed state taxpayers
and the party for several plane flights from South Florida to
Tallahassee. He said he would pay the party back about for eight flights
totaling about $3,000, but the party said Tuesday it had not received a
check.
Harris said the campaign has determined that only six were
double-billed and is waiting for the party to verify the exact amount.
Rubio's tax attorney, Steve Wasserstein, said Tuesday that the
double-billing was an "accounting mistake'' that does not require an
amended filing and will be easily rectified when Rubio repays the party.
Times political editor Adam C. Smith contributed to this report. 
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