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‘Make his life a living hell.’ The FPL-financed plot to torpedo a Miami lawmaker

Miami Herald logo Miami Herald 9/9/2022 Mary Ellen Klas, Nicholas Nehamas, Miami Herald
President and CEO of Florida Power & Light Eric Silagy © MATIAS J. OCNER/Miami Herald/TNS President and CEO of Florida Power & Light Eric Silagy

When Eric Silagy, head of Florida Power & Light, heard that a nettlesome state senator had filed yet another bill threatening his utility’s hold on Florida’s solar-energy market, he gave his top executives a clear signal to target the politician, José Javier Rodríguez, a Miami-area Democrat.

Eric Silagy, president and CEO of FPL, was interviewed by the Miami Herald Editorial Board in 2013. © C.W. Griffin/Miami Herald Staff/Miami Herald/TNS Eric Silagy, president and CEO of FPL, was interviewed by the Miami Herald Editorial Board in 2013.

“JJR at it again,’’ Silagy wrote in a Jan. 7, 2019, email to senior FPL executives after reading a news story about the bill. “I want you to make his life a living hell....seriously.”

Their marching orders delivered, the executives immediately forwarded the message to Jeff Pitts, CEO of Alabama-based Matrix LLC and FPL’s chief political operative.

Over the next 18 months, Pitts would get to work using a maze of nonprofits to secretly finance an operation aimed at defeating Rodríguez, a twice-elected incumbent, and replacing him with a Republican less hostile to FPL’s interests.

It worked.

The 2020 takedown of Rodríguez was as simple as it was effective.

After receiving and rejecting an initial plan to finance a primary challenge, FPL and its political consulting team went with Plan B: creating a secretive nonprofit that could be used to funnel money to a no-party candidate in the general election — one who shared the same last name as the incumbent. That candidate, a Boca Raton auto parts dealer named Alex Rodriguez, siphoned away 6,300 votes. José Javier Rodríguez lost by just 32 votes.

Chair of the Miami-Dade Democrats and layer Steve Simeonidis looks a ballot with a magnifier during manual recount for Senate District 37 between Republican Ileana Garcia and Democrat Jose Javier Rodriguez at Miami-Dade Elections Department on Thursday, November 12, 2020, in Miami, Florida. © DAVID SANTIAGO/Miami Herald/TNS Chair of the Miami-Dade Democrats and layer Steve Simeonidis looks a ballot with a magnifier during manual recount for Senate District 37 between Republican Ileana Garcia and Democrat Jose Javier Rodriguez at Miami-Dade Elections Department on Thursday, November 12, 2020, in Miami, Florida.

It was part of a broader alleged “ghost candidate” plot in which non-party “spoiler” candidates ran in a total of three state Senate races, allegedly to help defeat Democratic candidates — who indeed lost. Two people have been criminally charged in connection with the effort to defeat Rodríguez, including a former state senator considered a staunch ally of FPL during his years in office. (The candidates were called “ghosts” because they did not actually campaign and appeared on ballots simply to draw votes away from Democrats, thanks to mailers that pumped up their supposed progressive credentials.)

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Outlines of the scheme emerged in a massive leak of internal documents from Matrix, which is embroiled in a bitter legal dispute with Pitts, its former CEO.

State Sen. Jose Javier Rodriguez wanted to get to Washington, D.C., in 2017 when he ran for Congress. Now, after losing his state senate campaign in 2020, he’ll get there are an assistant secretary in the Department of Labor. © CARL JUSTE/Miami Herald/TNS State Sen. Jose Javier Rodriguez wanted to get to Washington, D.C., in 2017 when he ran for Congress. Now, after losing his state senate campaign in 2020, he’ll get there are an assistant secretary in the Department of Labor.

Previous leaks delivered to the Orlando Sentinel and the Florida Times Union in Jacksonville allowed the outlets to report in detail how FPL used Matrix to secretly manipulate Florida politics. But the documents obtained by the Herald go further, providing the clearest link yet between Silagy and the efforts that not only torpedoed Rodríguez and two other Democratic candidates in 2020. They also outline the elaborate lengths to which the company’s lawyers and consultants went to conceal its role in backing similar political schemes in prior years.

Miami Sen. José Javier Rodríguez wears his message about climate change on his rain boots as he inspects Jose Marti Park in Little Havana for signs of flooding during the morning King Tide on Oct. 9, 2018. The park and other areas in Miami didn’t see remarkable flooding during this King Tide. © Emily Michot/Miami Herald/TNS Miami Sen. José Javier Rodríguez wears his message about climate change on his rain boots as he inspects Jose Marti Park in Little Havana for signs of flooding during the morning King Tide on Oct. 9, 2018. The park and other areas in Miami didn’t see remarkable flooding during this King Tide.

The Matrix documents show how FPL was able to play kingmaker in Florida politics through a network of opaque nonprofits set up by Matrix and Pitts. The elaborate operation was carefully choreographed with a consistent goal:take down any elected official who stood in the way of FPL’s interests, avoid disclosing the company as the source of the funds for the scheme, and leave enough distance to allow FPL, its staff, and its chief executive to deny involvement.

“These are big tasks that take coordination among a number of different actors and the implementation of them [may] undermine the desire for secrecy,” wrote political consultant Dan Newman in a June 9, 2019, memo. Despite being a Democratic operative, Newman was tasked with offering a never-executed plan to unseat fellow Democrat Rodríguez in a primary. The plan was shared with FPL.

A Harvard-educated lawyer, Rodríguez was one of the Florida Legislature’s most vocal advocates for ending the dependence on fossil fuels. He wore black galoshes around the Capitol that he had painted: “#ActionClimateFL” and filed bills, many of which never moved, to encourage investment in alternative energy.

For FPL, which is trying to establish itself as a leading clean-energy company and “eliminate carbon emissions from its operations,” Rodríguez and his climate change advocacy could have been seen as an ally in the fight for clean energy.

But Silagy didn’t see it that way. To achieve their renewable energy goals, FPL and its industry peers view consumer-owned solar generation as a threat to the monopoly’s business model.

“His incessant, gratuitous attempts to use FPL to score political points were unending, and this is why we did not support his candidacy,’’ said David Reuter, FPL’s chief communications officer. He made no mention of the solar bill.

While FPL could have openly backed Rodríguez’s challengers, the utility chose a secretive approach, said Saurav Ghosh, director of federal campaign finance reform at the nonpartisan Campaign Legal Center, which advocates for enforcement of campaign finance laws.

“They could have done this openly,’’ Ghosh said. “You have to ask yourself why they didn’t. And I think the answer is quite clear…If a corporation is basically picking its candidate, that’s not the best way for them to do it, so they tried to do it without letting the public know.”

Under state and federal law, political spending must be disclosed, and it is illegal to use straw donors and shell companies to hide the true sources of election spending.

Legal experts warn that the covert plans advanced by FPL and its political operatives in recent years may have violated IRS rules and state and federal campaign finance laws, by giving the appearance that Silagy and FPL’s political operatives were relinquishing control of the company’s donations when, in fact, they were in charge.

“This is pretty much the nightmare scenario,” Ghosh said. “You have a powerful corporate player in Florida politics using its financial resources to defeat a candidate without any disclosure to the public.”

Reuter vigorously denied that FPL was involved in the scheme to finance the effort behind the ghost candidates.

“Any report or suggestion that we had involvement in, financially supported or directed others to support any ‘ghost’ candidates during the 2020 election cycle is patently false,’’ he said in a statement on Thursday.

Grow United

The Matrix documents, however, provide evidence to the contrary, particularly when it comes to a shadowy nonprofit group called Grow United. According to the Florida Division of Elections, the secretive organization was used as the source of the campaign funds that propelled the three Florida ghost candidates, including the one who ran against Sen. José Javier Rodríguez.

In June 2020, a Matrix employee traveled from Alabama to Colorado to rent a UPS box for Grow United. Months earlier, Matrix had registered the company as a non-profit “social welfare” organization with a stated purpose of advocating for the decriminalizing of marijuana.

The Matrix employee was paid $700 a day and reimbursed for six nights in a hotel, as well as $5,000 for “time.” The expenses were charged to FPL, according to a Matrix email titled: “FPL Expenses for Grow United c4,” for a total of $12,813.

The date of the invoice: June 29, 2020, 17 days after the three spoiler candidates had qualified to run as no-party-affiliated candidates for state Senate seats 9, 37 and 39.

FPL said last week that while it may have been billed for those charges, it has no record of paying them. It also denies ever paying the $238 filing fee for Grow United, also included in the Matrix documents.

“We have confirmed in our own accounts payable system that FPL was never billed for such a charge by Matrix nor did we pay that 501(c)(4) directly for the charge,’’ Reuter said. He alleges that “the screenshot of Matrix’s accounting system was staged to make it look like FPL had funded the entity when in fact we had not.”

In a lawsuit filed last year, Perkins, the Matrix founder, alleged that an internal Matrix investigation conducted after Pitts left the company concluded that Pitts created a competing communications consulting company “effectively embezzling money from and unlawfully competing with Matrix.”

In a statement to the Miami Herald, Perkins said that after discovering that Pitts and his partners had attempted to destroy the computer servers that held the alleged off-the-record books, he hired an IT expert to restore them. He now alleges that Pitts and his team channeled more than $50 million through 18 of the C4s, including “numerous off-the-book operations for Florida Power & Light.”

“We have one million files recovered from the backup server for Jeff Pitts and his co-conspirators that document questionable actions on behalf of FPL and record the transfer of tens of millions of dollars to support these actions,’’ Perkins said Friday.

Perkins denied altering any of the documents it has retrieved from its backup servers. “Nothing in these documents has been altered in any way,’’ he said. “The chain of evidence on these documents has been well preserved and will stand scrutiny in any venue.”

Pitts’ lawyer, John Collins, accuses Perkins of being the anonymous source of the leaked documents. “This is a continuation of Perkins’ harassment and multi-million dollar extortion of both past and existing clients,’’ he said.

Known by the IRS as 501(c)(4)s “social welfare” organizations, or C4s, groups like Grow United are considered “dark money” operations because they are not required to disclose their donors. They are also exempt from taxation, as long as more than half of their activity is not involved in politics.

While Grow United’s stated “social welfare” purpose was promoting pot, the Matrix documents leave the impression it was actually a fig leaf for political operations in Florida.

In the five months after establishing a Colorado UPS store as its address,FPL’s political consultants would pour cash into Grow United for two apparently counterintuitive purposes: on the one hand, to support Democrats and left-leaning organizations working to elect Democrats, and on the other to finance secretive campaigns for the three “ghost candidates” running against Democrats, including the contest in which Rodriguez ran against Rodríguez.

The unknown Rodriguez ultimately siphoned off enough support in the general election to elect the Democrat’s opponent, Republican state Sen. Ileana Garcia.

José Javier Rodríguez, who has since been nominated to be assistant secretary for Employment & Training at the U.S. Department of Labor in the Biden administration and is awaiting confirmation by the U.S. Senate, declined to comment.

While Gov. Ron DeSantis has created a new Office of Election Crimes and Security to go after election fraud, he has refused to comment on the FPL-funded activity, first broadly outlined in the Orlando Sentinel. The office’s new head, former Broward Supervisor of Elections Pete Antonacci, would not answer whether potential campaign finance and straw donor violations will be among the crimes his agency will investigate. A spokesman said complaints should be referred to the Florida Elections Commission.

The IceMan

Numerous leaked documents demonstrate the devotion to secrecy for both FPL officials and their operatives.

One document — an internal ledger kept by Matrix allegedly of FPL’s political spending — includes a note next to two FPL donations to Matrix nonprofits (one for $125,000, the other for $100,000): “Off books per IceMan.”

It’s not clear who “IceMan” is or why the sums had to be “off books.”

“We have no knowledge of who ‘IceMan’ may be,re for and we have never heard that name used in conjunction with any FPL personnel, including Mr. Silagy,’’ Reuter said. “Equally important, we have no knowledge of an ‘off- the-books’ ledger of political contributions.”

In one email, Pitts described the collection of C4s and out-of-state corporations used in the operation as applying “the most discreet” disclosure requirements allowed. In a proposal to Silagy, laying out the funding structure for the 2020 election cycle, he suggested forming the corporation in Delaware “to minimize disclosure.”

The documents obtained by the Herald from anonymous sources and public records requests include confidential bank statements, invoices between Matrix and FPL, photocopies of checks, emails and text messages, PowerPoint presentations intended for Silagy, political memos, and Matrix financial ledgers.

Miami Herald reporters authenticated the documents obtained from the sources and determined they resided on the server at Matrix, LLC. FPL has seen the Matrix documents and denies any wrongdoing.

The correspondence, primarily since 2018,depict Silagy, FPL’s chaiman, chief executive officer and president who made more than $15 million in 2021, as taking a deep interest in the company’s political operation, its secretive methods to channel money, and how the company was portrayed in the media.

They show that he was in frequent email and text contact with Pitts and political operatives — from both parties — who used his company’s funds to hire private investigators, create shell corporations, finance nearly two dozen C4s and, until now, shielded the activity from public scrutiny.

The CEO often masked his own involvement by using a private Yahoo email address rather than his official corporate account. He also received messages at another another email account under the pseudonym “Theodore Hayes,’ although Reuter said Silagy ultimately decided not to use that account.

The documents also reveal for the first time that FPL secretly financed a spoiler candidate in 2018 in a Gainesville state Senate race — in an operation with striking parallels to the one that would take down Rodriguez and two other Democrats in 2020.

They provide the records that show that in 2018 FPL money was used to finance the effort to derail the constitutional amendment aimed at deregulating solar, and, as the Orlando Sentinel first reported, it was FPL money that financed attack ads against former South Miami Mayor Phil Stoddard in and Miami-Dade County Mayor Daniella Levine Cava’s county commission campaign.

The Spoiler

Having succeeded at using C4s to shield their operation successfully in 2018, they turned to them again in 2020. According to prosecutors, Alex Rodriguez was recruited for the race in Senate District 37 by a team of operatives led by Miami Republican state Sen. Frank Artiles.

Shortly before the 2020 election, voters in the district — which stretches from Allapattah to Cutler Bay and includes downtown Miami, Coconut Grove, Key Biscayne and parts of Coral Gables — received mailers promoting the unknown Rodriguez. The mailers were designed to appeal to liberal Democrats — José Javier Rodríguez’s prime constituents — promising the no-party candidate would “fight climate change, hold the police accountable [and] guarantee a living wage.”

The name FPL appeared nowhere on the mailers, which listed only political committees with high-minded names like “The Truth” and “Our Florida.” But the Matrix records show that the only source of money for the mailers could be traced back to a single nonprofit: Grow United, which did not have to identify its donors.

A key intermediary in the operation was a nonprofit called Let’s Preserve the American Dream, run by Ryan Tyson, a top GOP pollster who worked closely with Pitts and his partners, the records show.

Let’s Preserve the American Dream had received more than $700,000 from FPL and its affiliates in the previous election cycle, according to an internal Matrix ledger. It is not known how much FPL contributed to the C4 in the 2020 election cycle.

Court documents obtained by the Miami Herald in connection with the state attorney’s investigation show that as part of the ghost candidate plan, Let’s Preserve the American Dream paid Artiles $125,000 for “research” and gave Grow United $1.15 million.

The tight Senate race in Miami was closely monitored by Martell, the FPL vice president, and another executive, John Holley, FPL’s vice-president of state government affairs. On Sept. 24, 2020, Tyson sent a poll to the FPL officers and Matrix’s Pitts showing José Javier Rodríguez tied with his GOP rival — with spoiler Alex Rodriguez projected to take 4% of the vote.

In the text exchange, Tyson complained that the political consultant running the Republican Senate campaigns, Data Targeting’s Pat Bainter, wanted him to stop polling the district, fearing voter fatigue.

Holley responded that polling was only one of their strategies and added, “We are going to charge full speed ahead in all those seats.” Martell agreed: “We have our own [Miami-Dade County] strategy. Not stopping that under any circumstances.”

By the end of the month, Tyson’s nonprofit had donated $600,000 to Grow United, which passed on $550,000 to two Florida political committees that were coordinating with Matrix,according to internal Matrix emails and state campaign-finance records. The committees, The Truth and Our Florida, then paid for thousands of mailers.

The mailers were sent to voters not just in Rodríguez’s district but in the two other key Senate races where Matrix was also promoting ghost candidates in an attempt to siphon votes from Democratic candidates: Senate District 9 in Orlando and Senate District 39 in Miami. Like Rodríguez, the Democrats in those districts lost.

Nothing about the mailers could be traced back to FPL, Tyson or Matrix — or at least not publicly.

On paper, the political committees were headed by two women with no political experience who had been paid a few thousand dollars to lend their names to the committees by an associate of Tyson’s, Tallahassee political consultant Alex Alvarado.

In an interview with prosecutors, Tyson said he “had a hunch” his $600,000 donation to Grow United would help the political committees funding the mailers. But in a statement to the Miami Herald, he denied having a role in the operation.

“The documents themselves do not connect me to those organizations in the way you allege,’’ he said.

The labyrinth of nonprofits, passing money from one to the next and then the next, offered FPL a greater degree of separation and the ability to deny its involvement.

For instance, one typical series of transactions began with Matrix invoicing FPL for more than $2 million in September 2020. The political consulting firm then wired nearly $2 million to a nonprofit called People Over Profits. A week later, People Over Profits donated $500,000 to Grow United, where the records show Democratic operative Dan Newman was directing funds and keeping Matrix updated on how much he was raising and from where.

Those layers of financial transactions even confused Matrix, the documents suggest.

In a text message discussion about contributions to Grow United, one Matrix employee asked: “Is People Over Profits Dan?”

The answer? “Yes.”

Meanwhile, as details about the operation have emerged, they have led to a flurry of confusion and bitter feelings among the operatives.

While Newman may have been directing People Over Profits’ contributions, the group was formally headed by Sean Shaw, a former Democratic state legislator and candidate for attorney general.

Shaw told the Herald that only after the 2020 election did he learn that his progressive nonprofit was used as a vehicle to funnel money to Grow United, an organization secretly working to defeat Democrats. He said that while he “ultimately approved” where the funds went, Newman “and I determined how it would best be spent.”

Newman said in an interview he is confident the money he raised for Grow United went into Democratic Party causes, and was unaware the same fund was used to steer money to the ghost candidates. State campaign finance records show Grow United gave $530,000 to the Florida Democratic Party and its legislative campaign arm, just two weeks after it had financed the ghost candidate mailers.

Solar as threat

The 2019 bill that incurred Silagy’s wrath and set José Javier Rodríguez’s political destruction in motion would have allowed property owners to sell excess rooftop-generated solar power to neighbors and tenants through power-purchase agreements. Florida is only one of only four states that prohibit citizens from buying electricity from anyone other than a utility through power-purchase agreements.

Rodríguez filed the legislation for the third time in three years. It never had a chance of passage in the Republican-dominated Legislature, where FPL has spent the past decade building allies and investing in candidates on both sides of the aisle. That didn’t matter to Silagy, who wanted to make his life “hell.”

At a time when energy is shifting from fossil fuels to renewable energy, FPL, perhaps more than any other Florida corporation, retains the resources and might to elevate or destroy political careers. That formidable power, in turn, enables FPL to steer the legislative agenda — even surreptitiously drafting regulatory bills — through its army of Tallahassee lobbyists.

Silagy was promoted to head the company in 2011, after he successfully led a campaign to oust four members of the Public Service Commission, which had rejected the company’s rate increase request. Since then, FPL has spent millions to win allies in the Florida Legislature, the governor’s office and the PSC, and worked to avoid airing public debates about its policies by targeting opponents.

The defeat of Rodríguez and the two other Democrats who faced ghost candidates secured the Republican majority in the state Senate.

Republican legislators demonstrated their appreciation for FPL’s election-cycle contributions by giving fast-track approval status to the company’s priority legislation in in 2021 and 2022, including a long-sought bill to undermine roof-top solar expansion by raising “net-metering” costs and fees and lowering the reimbursement rate for energy sold back to the utility.

After pushback from the state’s growing solar industry and a public relations crisis over rising FPL utility bills in Northwest Florida, Gov. DeSantis vetoed the bill in June.

‘FPL being FPL’

Before launching the ghost candidate scheme, Matrix considered another approach to fulfilling Silagy’s command to “make [José Javier Rodríguez’s] life a living hell”: funding a primary challenger to the progressive Democrat.

In a June 2019 memo to Pitts, Newman noted that defeating Rodríguez would be a challenge. “Many operatives and donors are heavily invested in his success because he’s had three [successful] highly-contested races over the last four cycles,” Newman wrote.

He suggested it might be difficult to find dirt on the candidate who was “known for his clean living” and concluded by suggesting they mount what most party loyalists would consider an affront: a primary campaign.

Newman suggested they secretly recruit Miami state Rep. Nick Duran, another Democrat, to challenge the popular Rodríguez.

In the memo, Newman estimated the effort to elevate Duran and sink Rodríguez would cost $3.35 million to $3.85 million “with a request of $3M from the client.” He suggested they force Rodríguez to spend money early and “capture his base” by recruiting a third progressive candidate to siphon away votes.

In a statement to the Miami Herald and Orlando Sentinel on Thursday, Newman said his goal with the memo was not to encourage a primary against Rodríguez but discourage it.

“I wrote this memo in an effort to dissuade anyone from running a primary campaign against Senator Rodríguez. I knew the $3M price tag would be too high for any funder given the low likelihood of success,’’ he wrote. “My suspicion seems to have been correct because I never received a response of any kind to the memo and deemed my effort to be successful.”

Newman said he considered the client to be Matrix, and “had his suspicions” that FPL may have been behind it, but never discussed it with Pitts.

By October 2019, however, records show Tyson forwarded the memo to FPL’s Martell, echoing the warning about the challenge of unseating Rodríguez in Senate District 37.

“It’s bleak for an R to win in 37, plain and simple,’’ he wrote in an Oct. 3, 2029 email. Then, Tyson outlined a schedule of focus groups around the state for the other races the FPL executive was watching, and included a voter projection model for Rodríguez’s district.

Duran said neither he nor his political consultant had ever been approached about challenging Rodríguez but he was not alarmed that such a proposal was contemplated.

“FPL is involved, probably, in a lot of things,’’ Duran said. “It’s part of their operation — a large company and a large footprint. It makes sense they are involved here, based on the size of the company and how much of a footprint they have in the state. It’s FPL being FPL.”

What’s next?

In addition, a criminal investigation by the public corruption task force of the Miami-Dade state attorney has uncovered details about the elaborate scheme, including that Alex Rodriguez was paid $45,000 by Artiles, the former senator, to jump into the race.

On the night of the 2020 election, over drinks at an Irish pub in Seminole County, Artiles took credit for engineering Alex Rodriguez’s candidacy and Garcia’s victory, prompting the state attorney to seize Artiles’ files and computer, and launch an investigation.

Artiles and Rodriguez have both been arrested on felony charges. Rodriguez pleaded guilty. Artiles, a close ally of FPL during his time in the Legislature, is heading to trial.

Two Matrix consultants, Newman and Tyson, received “prior to” letters from prosecutors, seen as a signal authorities are seeking their cooperation in the criminal case. But neither FPL nor Pitts, the former Matrix CEO have been charged.

A text conversation going back to 2016 between Pitts and Martell, the FPL vice president, demonstrates their wariness about creating a paper trail for the C4s that might expose their secret operation.

Martell told Pitts said he wason the phone with Silagy and needed the bios of the people Pitts had put in charge of two C4s. Pitts replied that one was set up in the name of his college roommate and the other used a Birmingham political consultant he trusted. But the ex-roommate and political consultant were in charge on paper only.

“Bottom line is we are the ones with the checkbooks and in control 100%,’’ Pitts explained.

Channeling Mission Impossible, Martell replied, “This text is self destructing in 30 seconds.”

“Yep,’’ Pitts answered. “And that’s why I like face to face.”

Mary Ellen Klas can be reached at meklas@miamiherald and @MaryEllenKlas

©2022 Miami Herald. Visit miamiherald.com. Distributed by Tribune Content Agency, LLC.

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