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Ethics
Too many masters?
As development quickens in Hollywood, Becker & Poliakoff's role in lobbying both for the city and for developers who want projects approved raises new conflict questions
March 17, 2003
By Julie Kay
In the middle of trying their breach of contract case against the city of Hollywood in January, the lawyers for the estate of the late hotel and gambling mogul Gus Boulis sprung a surprise on the city’s lawyers. They revealed that the damages they sought included a $50,000 success fee for the law firm Becker & Poliakoff, the city’s longtime lobbyist.
Boulis’ estate wanted to recoup the fee it paid to the Hollywood-based firm and its shareholder Bernie Friedman for winning approval from the Hollywood City Commission in 1997 for Boulis’ controversial deal to build the luxury Diamond on the Beach hotel on city-owned land.
The city’s lawyers took in the news in stunned silence. They found themselves in the unusual position of contesting a lawsuit in which Friedman, the city’s paid lobbyist in Tallahassee, and his law firm would benefit if the city lost the contract case. And if it lost, the city would pay Becker & Poliakoff’s success fee for providing that lobbying work for the developer.
The city’s lawyers and some city officials privately fumed. “[Friedman] cannot serve two masters,” said Commissioner Sal Oliveri, who twice in the past two years has unsuccessfully proposed to discontinue Becker & Poliakoff’s lobbying contract, citing a conflict of interest by the law firm.
The stir over the success fee is the latest in a series of ethics controversies involving Becker & Poliakoff, one of Broward County’s largest and most powerful law firms. It lobbies both for local governments and for real estate developers and other private clients who have interests before — and sometimes adverse to — those governments.
In recent months, questions have been raised about the firm’s role in lobbying the city of Hollywood on behalf of the developer of the controversial Ocean Palms condominium tower, representing a prospective contractor in an airport runway project opposed by the city, and participating in discussions with city officials about redistricting for the 2004 City Commission election. Critics say the city’s lobbying firm has no business being involved in the remap, which could significantly enhance its ability to win approval for its private clients’ development projects.
The law firm also faces questions about possible conflicts in its representation of private clients. A former client recently filed a lawsuit against the firm, alleging it breached its fiduciary duty to him by representing both him and his landlord simultaneously. In addition, a Hollywood resident filed an ethics complaint with the Florida Bar against Friedman, alleging conflict of interest; the Florida Bar dismissed the complaint earlier this month.
These criticisms have intensified as a result of the quickening pace of Hollywood real estate projects in which Becker represents the developers.
Becker’s frequent dual role as lobbyist and lawyer — and similar practices by other South Florida law firms such as Steel Hector & Davis — also raises questions about whether Bar conflict of interest rules and enforcement are tough enough.
Becker & Poliakoff, a 102-attorney firm with 10 offices in Florida, has contracts to do lobbying work for Miami-Dade County, the Miami-Dade School Board, Pompano Beach, Lauderdale Lakes, Southwest Ranches and Opa-locka. Its lawyer-lobbyist team consists of Friedman and another Becker shareholder, Yolanda Cash Jackson.
But the firm has a particularly heavy involvement in Hollywood. Since 1991, it’s held an exclusive, $50,000-a-year contract with the city to represent its interests in Tallahassee. The contract names Friedman and Alan Becker as the city’s official representatives.
The firm is well-known in Hollywood for its key role in raising money for and providing political advice to several members of the City Commission — including longtime Mayor Mara Giulianti — who consistently support real estate development deals sought by the law firm’s clients.
Some observers say the firm’s political fund-raising and campaign work, in conjunction with its heavy involvement in charitable organizations in Hollywood, give it great influence over city officials on a wide range of issues. “That firm literally runs the city,” said former City Commissioner John Coleman.
“It is nice of John to say so, and I am sure he means it in the nicest way, but actually there is a very engaged City Commission and competent manager who run the city,” replied Becker & Poliakoff co-founder Alan Becker in an e-mail response to questions from the Daily Business Review.
Questions for this story were referred to Alan Becker. The firm would only agree to answer questions in writing via e-mail. Friedman and Alan Koslow, a lawyer-lobbyist for residential and commercial developers in Hollywood, were not made available.
Carl Schuster, managing partner of Ruden McClosky Smith Schuster & Russell, said lobbying a governmental body while representing that body in Tallahassee “sounds like it would be a conflict of interest. Logic would tell you the lobbyist would expect favors” from its government client.
But Alan Becker said there’s no conflict involved in lobbying the Hollywood City Commission while it lobbies on behalf of commissioners. “The Florida Bar has so held in the past,” he said. “The City Commission and the city attorney have concluded that there is no conflict.”
Mayor Giulianti strongly defended Becker & Poliakoff’s role.
“I have never felt there was a conflict,” she said. “If we ever want Bernie to not be involved, we can get him out of there. They have never gotten me to vote for something I didn’t want to.”
She noted the heavy involvement of the firm and its lawyers in civic and volunteer activities.
Client consent is key
Becker & Poliakoff is hardly the only South Florida law firm which both lobbies for governments and lobbies those governments. Steel Hector, Holland & Knight, Greenberg Traurig and Shutts & Bowen also work both sides of the fence.
Jorge Lopez, a partner at Steel Hector in Miami, lobbies the Florida Legislature on behalf of Miami-Dade County and, with other partners, lobbies the county on behalf of nearly 100 developers and other clients.
Lopez said that what he does is thoroughly regulated by the Miami-Dade County Commission. One of the county’s safeguards is that lobbyists for the county now must seek a waiver from commissioners before working for any other clients before the Legislature. If they don’t, they can be cited for breach of contract.
Steel Hector’s legal ethics expert, partner William Killian, said his firm would likely not put itself in the position of lobbying both ways. “You have to be very careful,” he said. You are receiving confidential information about the city or county as its lobbyist. It can present enormous problems down the road.”
When informed that his firm also has a lobbyist who lobbies for the Miami-Dade County Commission in Tallahassee and also lobbies the County Commission, he expressed surprise. “We do?” he said. “I did not know that.”
According to the Florida Bar and legal ethics experts, the only clear conflict of interest violation for a law firm is to represent a governmental body and an adverse party on the same issue. To represent adverse parties on different issues, a lawyer-lobbyist needs to disclose the issue to both parties and obtain their consent, said Arne Vanstrum, the Bar’s assistant ethics counsel. Lobbyists who are not lawyers and who do not work for law firms are not regulated by the Bar.
The relevant section of the Bar ethics code, Rule 4-1.7, says that “loyalty to a client prohibits undertaking representation directly adverse to that client’s or another client’s interests without the affected client’s consent. Loyalty to a client is also impaired when a lawyer cannot consider, recommend or carry out an appropriate course of action for the client because of the lawyer’s other responsibilities or interests.
“The critical questions are the likelihood that a conflict will eventuate and, if it does, whether it will materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of the client.”
But if a law firm obtains client consent to represent adverse parties, then it has considerable latitude, limited only by its internal ethics policy, some experts say.
Stephen Gillers, vice dean at New York University law school and an authority on legal ethics, said it’s ethically acceptable for a lawyer who lobbies for both a city and a private client to lobby the city on behalf of that client. But once the lawyer-lobbyist secures approval for the private client’s project, he or she should then withdraw from representing the private client. The two parties are inherently adverse, he said.
But former Florida Supreme Court Chief Justice Gerald Kogan said lawyers need to go beyond a narrow reading of legal ethics rules. “As lawyers, we’re taught to look for ways around statutes and find exceptions,” said Kogan, now an attorney at Wetherington Klein & Hubbart in Miami. “But I tell lawyers that when it comes to ethics, don’t look at it as a lawyer, look at it as a nonlawyer from the outside. If it doesn’t look right, then chances are it isn’t.”
Indeed, some South Florida law firm leaders say their firms take great care to avoid potential conflicts in considering whether to lobby for a government body while also lobbying that body.
Broad and Cassel, which has lobbyists in Tallahassee, does a comprehensive conflict check when a potential client comes knocking, said Gabriel Imperato, managing partner of the firm’s Fort Lauderdale office. He says the firm would not lobby both sides the way Becker & Poliakoff does. “It doesn’t play well with our client base,” he said.
Ruden McClosky, which employs a nonlawyer lobbyist who represents only business interests in Tallahassee, has a three-person department dedicated to running conflict checks, Carl Schuster said. If his firm decided to lobby both ways, it would first ask for approval from both parties. “There are times where it’s not technically wrong but it just doesn’t look right,” he said.
But Steel Hector’s Lopez downplayed the potential for conflict in his work. He insists that he gets no inside information from Miami-Dade County commissioners that could be used to benefit his private clients. “I have yet to have a developer call me and say, ‘I found out you’re the county lobbyist so I want to hire you,’ ” Lopez said.
Condos and politics
Becker & Poliakoff was founded in 1972 by Alan Becker and Gary Poliakoff. Poliakoff currently serves as managing shareholder, while Becker is in charge of the firm’s litigation, government relations and international practices.
The firm long has been known for its condominium law practice. It represents hundreds of condo associations throughout Florida. In recent years, it has expanded its international business law practice, opening offices and establishing affiliations in China, the Czech Republic, Germany and Latin America. Becker said its annual revenues are $35 million.
Bernie Friedman, 44, has been Hollywood’s contract lobbyist in Tallahassee since 1991, while also lobbying Hollywood city commissioners on behalf of real estate developers and other clients. In addition, he does fund-raising and campaign consulting for local political candidates and elected officials, including Mayor Giulianti. In 2000, he helped run the campaign of current Broward County Commissioner Diana Wasserman-Rubin.
“Bernie understands the issues, needs and concerns of [Hollywood] as well or better than anyone involved in the legislative process,” Alan Becker said.
Prior to 2000, when Hollywood had only five city commissioners, “Bernie used to be called the sixth commissioner,” said John Coleman, who ran unsuccessfully for mayor against Giulianti in 2000. “If you’re not good to them, Bernie and Alan will run someone against you in the election.”
Alan Koslow, 49, joined the firm as a partner in 1994 and has become the go-to lawyer-lobbyist for residential and commercial developers in Hollywood. He came to the firm after resigning in 1993 as Hollywood city attorney. He stepped down after the city commission discovered that he negotiated a $50,000 sexual harassment settlement on behalf of the city with a former city employee with whom he was having an affair. The Florida Bar suspended his law license for 45 days.
Giulianti said Friedman and Koslow have built their credibility and influence in Hollywood by serving on the boards of numerous charitable, arts, civic and Jewish organizations. They’re key members of the so-called “Emerald Hills gang,” a clique of well-heeled residents from the wealthy, heavily Jewish north side of the city, where the mayor also resides.
Never asked for consent
Hollywood’s contract with Becker & Poliakoff for lobbying services states that the law firm cannot “take any adverse position to the city or represent any third party in any matter that is adverse to the city’s interests.”
In addition, Friedman and Becker “cannot appear before the City Commission or before any city board on behalf of a client on a nonadverse matter without the permission of the city manager and city attorney.” Nor are Friedman and Becker allowed to “lobby individual city commissioners or board members on behalf of a client on a nonadverse matter without the assent of the respective city commissioner or board member.”
But Coleman said that during his two years on the commission, from 1998 to 2000, Friedman never asked for his consent before lobbying him. He said Friedman and Koslow frequently dropped by his office unannounced to engage in lobbying. He finally put a stop to the practice by telling Friedman to make an appointment before stopping by.
Hollywood City Attorney Dan Abbott said it’s up to individual commissioners to regulate this. They “can always say, ‘Bernie, I don’t want to talk to you,’ ” Abbott contended.
Giulianti said Becker & Poliakoff’s insider relationships with the commissioners and the firm’s campaign fund-raising for them has had nothing to do with its success in winning commission approval for its clients’ development projects. Instead, she said, Friedman and Koslow succeed because they spend a lot of time explaining the projects to the commissioners and modifying them in response to objections.
“I don’t see how [the city commissioners] are beholden to them,” she said. “If anything, they are beholden to us.”
Confusion over dual role
Over the years, several city commissioners and former City Manager Sam Finz have expressed discomfort with and tried to end Becker & Poliakoff’s dual role. Finz said that when he saw Friedman working City Hall, he often didn’t know whether he was representing the city or real estate developers.
When Jamie Cole started as Hollywood city attorney in 1994, he was surprised to learn that Becker & Poliakoff was doing legal work for the city while lobbying for it in Tallahassee and lobbying city commissioners on behalf of private clients. Cole said he quickly stopped using Becker & Poliakoff for city legal work.
Concerns about Becker & Poliakoff’s dual role first came to public attention in 1999 in connection with the firm’s representation of Gus Boulis.
Boulis, the Miami Subs founder who was murdered in February 2001, docked one of his SunCruz Casino ships on the Intracoastal Waterway in the north Hollywood beach area. In 1998, the city sued SunCruz to collect an unpaid occupational license tax; the federal government and the Florida attorney general’s office also were investigating Boulis and his company.
Then-Commissioner Coleman and others contended that it was a conflict for Becker & Poliakoff to be representing Boulis and SunCruz Casino while the city was taking legal action against Boulis and his company. But the law firm insisted that it stopped representing SunCruz when the city filed its lawsuit.
The firm, however, continued to represent Boulis on another matter. In 1999, with Friedman lobbying for him, Boulis sought to convince the City Commission to let him keep his long-term contract to lease city-owned land for construction of the Diamond on the Beach hotel. Some officials and residents wanted to terminate the project because of concerns about building the high-rise hotel in the low-rise beach area. In addition, Boulis, with all his SunCruz problems, had become a public relations liability.
But Boulis was allowed to keep the contract by a 3-2 vote, with yes votes from Giulianti and Commissioners Cathy Anderson and Dick Blattner. Friedman and his law firm have raised money and provided campaign assistance for all three.
Anderson, who was the swing vote, later acknowledged that Friedman lobbied her just before the vote while she was on her way to the ladies’ room. “Everyone knows Bernie is a lobbyist,” she said at the time. “That’s what lobbyists do, lobby. He’s a good lobbyist.”
A week after the vote, facing public criticism over the decision to let Boulis keep the contract, three commissioners — Coleman, Blattner and Sal Oliveri — took the position that Friedman and Becker & Poliakoff should no longer be allowed to lobby for both the city and developers. But the issue never came to a vote. “It just never went anywhere,” recalls former commissioner Blattner.
A Hollywood resident, Ted Rosz, filed an ethics complaint with the Florida Bar against Friedman, alleging it was a conflict of interest for Friedman to lobby the city on Boulis’ behalf. The complaint was dismissed in 1999.
The city terminated Boulis’ lease, and the Diamond on the Beach hotel was never built.
Recently, the issue of Becker & Poliakoff’s representation of Boulis flared up again. In January, a Broward Circuit Court jury found that the city wrongfully terminated Boulis’ lease in 1999; it awarded Boulis’ estate $850,000. That sum included a $50,000 success fee for Becker & Poliakoff for originally winning city approval for the contract.
Success fees are prohibited for lobbyists in the Florida Legislature and many Florida city governments, including Miami Beach — but they are permitted in Hollywood. “Success fees exert undue influence,” said Robert Meyers, executive director of the Miami-Dade Commission on Ethics and Public Trust.
But Alan Becker defends the practice. “Success fees, like contingent fees in personal injury cases, are a legitimate vehicle for spreading a client’s risk and making services equally accessible regardless of the size or power of the business,” he said.
When asked about the appropriateness of Becker & Poliakoff receiving the $50,000 success fee out of the judgment paid by the city, Mayor Giulianti pleaded ignorance.
“I wouldn’t know anything about that,” she said. “The last thing I am going to worry about is whether or not someone is going to make money or not make money. I don’t want to know and it should not influence my decision at all.”
Conflict questions also have arisen because of Bernie Friedman’s representation of a contractor bidding on the south runway project at Fort Lauderdale-Hollywood International Airport. He is representing Parsons Transportation Group before the Broward County Commission. The city of Hollywood has officially opposed the south runway project.
According to a Florida Bar official, Friedman’s representation of the contractor appears to a conflict of interest. “Under Rule 4.17-A, it seems like representation of one party would be adverse to the other,” said Cynthia Booth, assistant ethics counsel for the Bar.
Mayor Giulianti expressed ambivalence about Friedman’s representation of the contractor. “Someone told me that one of the construction firms Bernie represented was involved in the south runway project,” she said. “We don’t like that plan. But I don’t think we can restrict [Becker & Poliakoff] from representing companies in front of other government bodies.”
Still, she contended that it’s not a conflict because the project hasn’t been approved yet. “I guess it would feel strange if it were about actual construction of a runway,” she said. “It would not be good from a public relations standpoint. But there is no way this is happening yet because a bid has not gone out for the runway.”
Alan Becker seconded that. “We are not lobbying for or against the [runway] extension and we have no say in that decision,” he said. “The County Commission makes that decision, and if they go forward, there is nothing inconsistent about our representing a potential designer or contractor.”
“If we thought this was a conflict, we would end the contract and find a new lobbyist,” said Hollywood City Attorney Dan Abbott.
Alleged conflict
Becker & Poliakoff and Alan Koslow also have drawn criticism recently for their representation of the developer of the 38-story Ocean Palms luxury condominium on the south end of Hollywood beach.
In October, Becker & Poliakoff won approval from the Hollywood City Commission — and subsequently from the Broward County Planning Council in a 7-6 vote — for the controversial project proposed by Plaza Properties. Critics say it’s too tall and dense for the relatively small site, and that the city didn’t follow its own procedures for approving it.
Koslow and lawyers from the firm had to wage a vigorous lobbying campaign to win those votes for Plaza Properties. They convinced several beachfront condo associations to testify in favor of the high-rise project. The beach-area associations generally oppose new high-rise construction on the shoreline.
At the time, Koslow was representing one of those condo associations, the Quadomain, in a separate matter. He was helping the association in an effort to block the owners of the Driftwood motel from building a condo tower next to the Quadomain complex.
The Quadomain association leaders came out in support of the Ocean Palms project. Ron Clasky, who was president of two Quadomain associations at the time of the city commission’s consideration of the Ocean Palms project, said Koslow pressured the condo association to take a public position in support of the Ocean Palms project, which he initially resisted but ultimately agreed to do.
“My board of directors wanted to support it but I felt it was too dense,” Clasky said. “I would have liked to say that in front of the [city] commission, but [the board] wouldn’t let me talk. This is a conflict of interest. We’re [Koslow’s] client, he’s our attorney. He had his finger in everything.”
Clasky insisted, however, that Koslow did not offer any quid pro quo. Koslow has denied applying any improper pressure on his client.
A Hollywood resident, Lee Sperber, filed a complaint against Bernie Friedman on Feb. 27 in relation to the situation. The Bar dismissed it on March 11.
Another alleged conflict involving Koslow and Becker & Poliakoff and its representation of private clients is the subject of a lawsuit filed in Broward Circuit Court in January. Dharmesh Patel, the owner of the now-defunct Royal Casino I gambling ship, claimed that Becker & Poliakoff and Koslow breached their fiduciary duty to him by simultaneously representing him and his landlord, the Ambassador Hotel, at the time he signed a lease with the hotel to dock his boat on the Intracoastal Waterway in Hollywood.
Patel alleged that the law firm knew the hotel was in foreclosure on its mortgage when he signed the lease and failed to inform him. He contended that his ship was evicted from the hotel docking space last November, just four months into the lease, thus driving him out of business. He claimed that the law firm and Koslow knew that the hotel’s mortgage holder was foreclosing on the hotel because the firm was representing the hotel in its Chapter 11 bankruptcy filing.
Alan Becker called the suit “frivolous.” He said that “if somebody is stupid enough to file this lawsuit, he will regret it. We don’t idly take frivolous lawsuits, and this one is frivolous.”
Developer friendly voting map
A number of Hollywood activists and business interests also are questioning the appropriateness of Bernie Friedman’s apparent involvement in putting together a redistricting map for the Hollywood City Commission.
Observers say the redistricting proposal would greatly dilute the power of beach residents by lumping them in with the Emerald Hills area. Beach residents say it would limit their ability to resist development projects by Becker & Poliakoff’s clients.
State law requires Hollywood to draw new districts to take into account new population counts following every U.S. census. In December, the City Commission hired Florida Atlantic University to draw up a remapping proposal.
Nevertheless, state Sen. Steve Geller, D-Hollywood, a lawyer-lobbyist who often represents developers, got together with Commissioner Keith Wasserstrom, who currently represents the Emerald Hills area and is considered strongly pro-development, to draw up their own map.
The Geller-Wasserstrom map would greatly expand Wasserstrom’s district. It would give him the entire beach area in addition to part of his current Emerald Hills area — creating an ungainly district connected by a narrow east-west sliver of land.
In addition, it would divide Emerald Hills into two districts. That would mean that former Commissioner Dick Blattner, who moved to Wasserstrom’s district in preparation for running against him in 2004, would have to run instead against popular incumbent Sal Oliveri, a former Hollywood mayor.
Wasserstrom justified his proposed map by saying “Emerald Hills used to control three out of five seats on the City Commission. Now we have one seat. We want to restore our power.”
Geller said, “Some friends came to me and asked me to do this,” adding that he is not charging a fee. He declined to say who those friends were. Wasserstrom said Friedman “absolutely did not” play a role in the map he drafted with Geller.
But Blattner and Giulianti suggested otherwise. Blattner said Friedman handed him a copy of the Wasserstrom-Geller map and asked for his feedback.
Giulianti also said she had discussed the issue with Friedman. “Yes, Bernie has spoken to me about redistricting in Hollywood,” the mayor said. “He told me that Sen. Geller was helping Commissioner Wasserstrom come up with new boundaries. But he said he did not want to be involved. I’ll let everyone else duke it out themselves. I am not going to get involved.”
Alan Becker sees nothing wrong with the law firm that has the city’s lobbying contract participating in developing a new voting map that could help his firm’s representation of its developer-clients. He said his firm has expertise in redistricting, and that it has offered its services to the city to help with the remap.
But Coleman, Blattner and Oliveri all said Becker & Poliakoff should stay clear of the redistricting process. “Experts should be drawing these maps, not some lobbyist who’s doing it so that three votes can come from his district,” Coleman said.
FAU staff will meet individually with commissioners next week to discuss the maps. The City Commission isn’t expected to vote on the new map until this summer.
Dual role nearly fatal
In Gus Boulis’ case, Friedman’s and Koslow’s representation of Boulis nearly got the two lawyers killed, according to Mayor Giulianti.
In early 2001, Giulianti said, she wanted Gus Boulis out of the Diamond on the Beach hotel project because Boulis’ various legal problems were stalling it. “Gus was just too controversial,” Giulianti said.
Giulianti wanted developer R. Donahue Peebles of Peebles Atlantic Development Corp. in Coral Gables and another developer to take over the project. Coleman said Friedman and Koslow regularly appeared with Peebles when the developer met with city officials.
The mayor recalls that Koslow visited her office one day and said he would try to persuade Boulis “to step aside for the good of the city.”
On the night of Feb. 6, 2001, Friedman and Koslow went to meet with Boulis at his office near Port Everglades in Fort Lauderdale, Giulianti and Alan Becker said. After the meeting, Giulianti said, Boulis normally would have invited them out to dinner. But Koslow had tickets to a Miami Heat game that night, and the two lawyers begged off.
After they left, Boulis got into his BMW and was driving off when he was shot to death mob-style near his office; the murder is unsolved. “Alan could have been in that car when Gus was shot,” Giulianti said. “He was so shook up.”
She said Koslow’s and Friedman’s dedication in that situation was characteristic of them. “It was typical,” she said. “Alan really believed that because the [city-owned site] was so crucial for development, they had to convince Gus that it would be a smart move for him to back off.”
But Coleman said Friedman’s and Koslow’s meeting with Boulis was improper because the City Commission had not approved their effort and because the two Becker attorneys simultaneously were representing Boulis.
Alan Becker did not respond to a question about whether his firm was also representing Peebles.
He said that in purely financial terms, having his firm serve as Hollywood’s lobbyist hasn’t been worth the trouble. But he said the firm does it to be a good citizen of its headquarters city.
“The revenue from the city is insignificant,” he said. “We receive $50,000 in fees out of $35 million in annual revenues for a job that weighs heavily on both Bernie Friedman as lead lobbyist and his staff, takes a lot of time and uses a lot of political capital. So why do we do it? Because we can do a great job for the city.”
Ultimately, the question of whether Becker & Poliakoff is behaving ethically is one that Hollywood voters — not the Florida Bar — will have to decide, said Stephen Gillers, the NYU ethics expert.
“The question is not about legal ethics rules, it’s about good government rules,” he said. “Ultimately, voters can get angry about it, and vote the city commissioners out.”
Julie Kay can be reached at jkay@floridabiz.com or at (954) 468-2622.
Review law editor Harris Meyer and staff writer Matthew Haggman contributed to this report.
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