MADEIRA BEACH (August 11, 2016) — The city will pay all legal bills for officials and employees now under investigation for alleged ethics violations.
That unanimous vote was taken Tuesday amid strong support for City Manager Shane Crawford and others who have been targeted by residents unhappy with the commission’s decision to allow hotel-condominium developments valued at some $200 million in the city’s downtown core.
The decision was also strongly denounced by residents who oppose those developments.
To date, seven ethics complaints have been filed with the Florida Commission on Ethics against Crawford, Mayor Travis Palladeno, Commissioner Elaine Poe, former Commissioner Pat Shontz, building official Frank DeSantis, and the city manager’s assistant, Cheryl McGrady.
At least five of the complaints are being formally investigated by the state, according to City Attorney Tom Trask.
In a six-page memo to the commission, Trask explained that the city’s insurance policy has a $100,000 total cap on attorney’s fees, a $5,000 deductible per claim, and a provision that the insurance carrier has the option to decline to represent one or more officials.
Additionally, the insurance coverage does not cover any actions that are “dishonest, fraudulent, criminal or malicious act, error or omission,” or actions that knowingly violated the law or resulted in “any profit or financial advantage.”
Public officials have a right to legal representation, providing the legal issue involves the performance of their duties and that those duties serve a public purpose, Trask said, adding that the “potential for future costs” in the ethics cases could easily exceed the limits of the insurance coverage.
He gave the commission three options: pay attorneys fees and costs if the policy limits are exceeded or the insurance company declines to defend any of the officials; wait to make a decision, potentially until the cases are resolved; or not make any decision at all.
“You may want to give them some sense that they will be defended,” Trask added.
“We are going to cover people from start to finish. There is no chance we are going to leave these people hanging,” said Commissioner Terry Lister.
Newly appointed Commissioner Housh Ghovaee urged residents to stop hiring lawyers and creating costs for the city.
“I would just like to bring this foolishness to an end. It has just gone on too long,” said Commissioner Nancy Hodges.
Palladeno abstained from voting to cover his legal bills but voted for covering other city officials and employees.
Sam Baker, leading the effort to secure a referendum on large scale projects, warned that the city is “facing possibly hundreds of thousands of dollars in legal expenses.”
Resident Joe Jorgensen said the commission was giving a “blank check” to those charged with ethics violations.
“Was there any criminal intent or malicious act? You don’t know,” he said.
Crawford decried the mere fact of the ethics complaints and lawsuits.
“You are suing the home team and it needs to stop. If you have a problem with the (commission) you run against them, you don’t sue them. … This junk is going to follow me on Google and I am not happy about it. … I am frustrated and this has taken a toll,” Crawford said, adding that he has a “spotless employment record.”
Meanwhile, a fourth lawsuit was filed Tuesday against the city, this time by Sam Baker, Barbara Ferrell, Linda Hein, Linda McArtor and Kristal Albertson.
Opposition to the multiple hotels, condominium buildings, commercial space and marina slips in the city’s downtown core are the driving force behind the multiple lawsuits and ethics complaints.
This latest action asks the Circuit Court to certify a referendum petition, allowing the process to continue, and, perhaps more importantly, invalidate the commission’s rezoning and development agreements for the Holiday Isle and Town Center development projects.
Other ongoing lawsuits challenge the legality of development projects’ rezoning and development agreements, the process the city followed in creating one of its zoning ordinances, and allege violations of the state’s Sunshine Law.
All of the lawsuits are being handled by Treasure Island lawyer Ken Weiss.