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South Fla. pols wondered where campaign cash came from. The answer led to a beleaguered N.J. developer

Philadelphia Inquirer logo Philadelphia Inquirer 10/7/2021 Jacob Adelman, The Philadelphia Inquirer

Shelly Petrolia was catching up on some paperwork from her campaign to remain mayor of her seaside South Florida town when she noticed an unfamiliar name among her contributors: High Point Services LLC.

Why was this obscure New Jersey firm interested in the city of Delray Beach?, she wondered.

Unraveling this small mystery reveals a curious subplot in the saga around a much larger firm, National Realty Investment Advisors, which pitches outsized investor returns in TV and radio ads from its development projects. Many of those projects have been in Philadelphia, where it’s already built or renovated more than 1,000 homes.

As The Inquirer has reported, NRIA is under investigation by the FBI and federal and state financial regulators, and a former key executive has separately been charged by federal authorities with fraud.

No criminal charges or civil complaints have been made against the company, which is racing to finish its projects up and down the East Coast in time to deliver promised returns on the $560 million it has collected from investors. It recently disclosed that it now uses cash from new investors to pay existing ones.

And one of the major projects it’s depending on to start generating profits is in Delray Beach.

A big builder in Philly advertises huge investor returns on radio and Fox News. Now the FBI and SEC are tuning in.

In that town, Mayor Petrolia phoned the lawyer who had dropped off the $1,000 check to get an address for High Point so she could send a thank-you note.

The lawyer was a former Delray Beach mayor named Tom Carney who had represented NRIA locally in the past. He gave her High Point’s Secaucus, N.J., address, she said. But he told her not to worry about the thank-you.

Petrolia didn’t know it at the time, but High Point was one of three New Jersey companies contributing to Delray Beach politicians with a common link to the Palm Beach County city: All were started by NRIA employees. And NRIA needed officials’ approval for its $59 million apartment project there.

None of the giving breached any Florida election laws, which permit any person or company to contribute up to $1,000 per candidate in a local election, as long as they’re doing so of their own volition, said Jan Jacobowitz, a former member of nearby Miami-Dade County’s ethics commission.

But it does arguably violate the intent of those laws, which are meant to limit how much a particular person or business can direct to a candidate, said Jacobowitz, now a legal ethics consultant and a professor at the University of Miami.

“It doesn’t seem to be illegal, but it goes against the spirit of the law,” she said.

NRIA said in a statement that “any and all political donations of which [it] is aware were lawfully made.”

Campaign-finance records show that NRIA-linked money started flowing into Delray Beach campaign coffers in November last year about the time that the company started seeking government approvals for its 301 Apartments project on a 1.5-acre site it acquired in the city’s scruffy Railroad Corridor section.

It was one of the about 20 major projects up and down the East Coast that the company was struggling to finish within the time frames on which it had based its financial projections. Another is a massive apartment complex on South Philadelphia’s Delaware River waterfront at what was once part of the proposed site for a Foxwoods casino resort.

Since the proposed five-story, 100-unit Delray Beach apartment project was to be taller and with more dwellings than area land-use rules permit, NRIA needed a majority of the city’s five-member commission to approve a change to those regulations at the site.

Three of those commissioners were nearing the end of their three-year terms and seeking reelection. Among them was Deputy Vice Mayor Adam Frankel, who received a total of $5,000 linked to NRIA in November and December.

The cash came in the form of $1,000 checks from the company itself, from its chief executive Rey Grabato and from Glenn La Mattina, its chief operating officer. But the two remaining $1,000 checks came from less immediately identifiable sources.

One was from High Point, which New Jersey records show was started in 2019 by Patryk Golaszewski. His LinkedIn profile lists him as an NRIA operations manager.

Another arrived from AJ Sales & Marketing Inc., which New Jersey records list as having been founded in 2012 by Arthur R. Scuttaro, records show. NRIA’s website lists A.J. Scutaro as a vice president for project management. (The company said Scutaro — with one “t” — was the family’s proper spelling based on immigration papers.)

Later in December, another set of five $1,000 checks reached Ryan Boylston, another Delray Beach commissioner up for reelection. Four were from NRIA, Grabato, High Point and AJ Sales & Marketing. The last came from X-On Advisors LLC, a New Jersey company established by La Mattina, the chief operating officer, in 2012.

As for Petrolia, she received $1,000 each in late February and early March from NRIA, Grabato, High Point and John Farina, president of U.S. Construction Inc., NRIA’s Philadelphia-based contractor on other of its Delray Beach projects.

In all, the NRIA-linked contributions to the three commissioners came out to $14,000.

Golaszewski, Scutaro and La Mattina did not respond to LinkedIn messages asking about their companies’ contributions. Farina did not respond to a text message.

When legislation for the 301 Apartments came up for a vote in its first of two readings on Feb. 9, Boylston and Frankel joined a third commissioner who was not in the middle of a reelection bid to form a majority in support of the legislation.

Boylston said in an interview that he supported the proposal because it would help revitalize what he saw as a blighted section of the city. Frankel did not respond to phone and text messages.

Joining the two-member minority opposed to the project was Petrolia, who said she feared it would displace members of the working-class Haitian community that owned businesses in the industrial area and lived nearby.

In a follow-up vote, after her NRIA checks arrived, Petrolia switched her vote to be in favor of the project. In an an interview, she said she remained opposed and that her switch had been a tactical maneuver. Under commission rules, she said, her “yes” vote gave her standing to potentially call for a new vote to kill the project in the future.

In fact, she said, she hadn’t associated NRIA — or the checks — with the 301 Apartments proposal because that project’s approvals were being handled by a lawyer other than Carney and nobody known to be associated with the company had participated in hearings on the project.

She said she was stunned to learn of the link.

“I don’t know if they think they can buy somebody,” Petrolia said. “But they can never buy me.”

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