To: The City of Miami Beach

From: The Miami-Dade County Commission on Ethics and Public Trust

Re: City of Miami Beach/Club Madonna

Date: January 29, 2009

On December 3, 2008, the Ethics Commission held a hearing on this matter for the purpose of making a probable cause determination. At the conclusion of the hearing a motion to find probable cause resulted in a 2-2 tie, thus the motion to find probable cause failed and the case was dismissed. However, the Commission determined that the dismissal should be accompanied by a Letter of Instruction

Wherefore, the Miami-Dade County Commission on Ethics and Public Trust hereby issues this Letter of Instruction.

The history of this case is rather long and involved. The salient facts are these:

Leroy Griffith (Griffith) is the owner of Club Madonna located within the City of Miami Beach (the City). Club Madonna is an adult entertainment establishment that provides, among other things, exotic dancing and nude female entertainers.

Miami Beach City Code sections 6-40 and 6-41 prohibit the sale of alcoholic beverages at an establishment that permits partial or total nudity. In approximately February 2004, Griffith, through his attorney, contacted the City and advised them that based on new case law it appeared that these ordinances were likely unconstitutional. Griffith was seeking to have the City amend its ordinance to allow for the serving of alcohol in establishments with partial or total nudity, such as Club Madonna.

On March 17, 2004, the City Commission considered a resolution to amend ordinances 6-40 and 6-41. The motion failed by a vote of 4 to 3. Commissioners Cruz, Garcia and Steinberg supported amending the ordinance to allow the serving of alcohol; however, Commissioners Gross, Bower, Smith and Mayor Dermer voted against the amendment.1 It should be noted that Mrs. Jane Gross, wife of Commissioner Saul Gross, appeared at this Commission meeting and spoke out against the amendment. As early as February 2004, Mrs. Gross2 had started a campaign of e-mails and phone calls to express opposition to allowing alcohol to be served at Club Madonna.

In approximately May 2004, Griffith filed a lawsuit alleging libel, slander and defamation against Mrs. Jane Gross for some of the comments she made at the March 17, 2004, City Commission meeting and for some of the e-mails she circulated.3

Griffith’s attorney in the libel case sent a letter to both Mrs. Gross and Commissioner Gross in May of 2004 demanding a retraction of the allegedly libelous statements and announcing their intention to sue. As a result of that letter, the City retained outside counsel, Richard Ovelmen (Ovelmen), from the law firm Jorden Burt, to represent Commissioner Gross in the event the commissioner was sued.

In December of 2005, the City Commission authorized a resolution to pay Jorden Burt $5316.33 for its successful representation of Commissioner Saul Gross. The City paid this sum, having deemed the representation of Commissioner Gross successful because, after reviewing Ovelmen’s legal argument negating any liability on the part of Commissioner Gross, Griffith only filed suit against Mrs. Gross and chose not to pursue a claim against Commissioner Gross.

Griffith filed suit against Mrs. Jane Gross, and Jorden Burt continued to represent her. In approximately September 2004, after a hearing before Judge Ronald M. Friedman, Ovelmen was successful in obtaining a dismissal, with prejudice, of the lawsuit against Mrs. Gross. Although the lawsuit was dismissed with prejudice, two issues remained concerning the Griffith v. Jane Gross lawsuit: (i) whether or not Griffith would protract the litigation by seeking a rehearing and filing an appeal of Judge Friedman’s decision, and (ii) whether Mrs. Gross would seek payment of her attorney fees pursuant to Section 57-105 of the Florida Statutes. Griffith’s federal lawsuit, challenging the constitutionality of the City’s no alcohol ordinance, was pending against the City while these two issues regarding the Griffith v. Jane Gross lawsuit remained unresolved.

On June 8, 2005, July 6, 2005, and July 27, 2005, the City held attorney-client sessions pursuant to section 286.011(8), Florida Statutes, to discuss the pending litigation against the City in Griffith’s federal lawsuit.

During these closed, attorney-client sessions, some Commissioners expressed concern that negotiating with Griffith to resolve his claim against the City would create the appearance that his lawsuit against Jane Gross had coerced the City to engage in those negotiations. In an effort to allay that concern, City Attorney Murray Dubbin suggested that the Commissioners consider asking Griffith to pay the attorney fees that Jane Gross had incurred before any negotiation with the City concerning the pending Griffith v. the City lawsuit went forward. An assistant city attorney communicated with Griffith’s lawyer concerning the issue of Griffith paying Jane Gross’s legal fees.

Griffith refused to pay Jane Gross’s attorney fees. Ultimately, Mrs. Gross settled her lawsuit with Griffith, agreeing to be responsible for her own attorney fees. Griffith dismissed his lawsuit against Mrs. Gross with prejudice.

Leroy Griffith/Club Madonna also filed an Ethics Complaint alleging that City of Miami Beach Commissioner Saul Gross violated section 2-11.1(d) of the Conflict of Interest and Code of Ethics ordinance (voting conflict) and, along with the rest of the city commissioners named in the complaint, violated section 2-11(g) of the Conflict of Interest and Code of Ethics ordinance entitled, “Exploitation of Official Position.”

Section 2-11.1(d) states, in pertinent part:

[N]o person included in the terms defined in Subsection (b)(1) shall vote on or participate in any way in any matter presented to the [City Commission]…who would or might, directly or indirectly, profit or be enhanced by the action of the [City Commission].”

Section 2-11.1(g) states, in pertinent part:

No person…shall use or attempt to use his official position to secure special privileges or exemptions for himself or others…”

The complaint filed by Griffith contained no factual allegations of its own. Instead, Griffith attached a memorandum prepared by the Ethics Commission’s Advocate which explained why the Advocate himself declined to file a complaint against the respondents.4 The complaint alleged that the respondents exploited their official position when they discussed the Leroy Griffith v. Jane Gross lawsuit in executive session; that they used or attempted to use their official positions to negotiate a strategy, free from public scrutiny, that interjected city attorneys into the private lawsuit between Jane Gross and Leroy Griffith for the specific purpose of benefiting Jane Gross.

The City has consistently maintained that the lawsuit that Griffith brought against Mrs. Gross was frivolous and only instituted against her in order to bring pressure against Commissioner Saul Gross to persuade him to change his vote on the ordinance change Griffith was seeking. Payment of Mrs. Gross’s legal fees was a point of negotiation as far as the City was concerned. Respondents maintained that they did nothing improper; that Leroy Griffith’s lawsuit against Jane Gross was totally frivolous and nothing more than an attempt by Griffith to exert pressure on Commissioner Gross and the City to pressure them to concede to his ordinance amendment.

There is not much dispute about the facts of this particular case. Complainant alleges, however, that those facts reveal that the City and respondents, in particular, tried to extort him into paying Mrs. Jane Gross’s legal bills as a condition of having the City entertain his attempt to amend City ordinances 6-40 and 6-41 regarding the sale of alcohol at establishments that permit partial or total nudity.

After hearing the arguments of the City and of the Advocate, this Commission could not reach a consensus as to probable cause, thus a finding of no probable cause was entered with respect to respondents Cruz, Gross and Smith. We did, however, feel that a Letter of Instruction should be issued that focuses on the fact that extraordinary caution should be exercised whenever a local legislative body considers using its powers when they are confronted with a perceived assault on one of their family members or the integrity of the legislative body itself.

As stated previously, the uniqueness of the situation, i.e., that a commissioner’s wife was involved in litigation with the same person who was suing the City, should have prompted the City Attorney’s Office to exercise a heightened degree of caution. Any discussion wherein it might even appear that the City would attempt to use its official leverage to secure payment of attorney fees to a commissioner’s wife, in her own private lawsuit, should have raised significant red flags to the City Attorney.

The fact that consideration of the strategy suggested by the City Attorney took place in an executive session Commission meeting, outside the public’s eye, created an additional risk that the strategy would be misperceived by the public. Publicly explaining to the citizens of Miami Beach how the Commission felt about Griffith’s alleged pressure tactics, in retrospect, would have been the better course of action to pursue irrespective of whether such course of action was legally required.

Although the City Attorney suggested the strategy, the city commissioners themselves, especially Commissioner Gross, should have been concerned that if they successfully used their official power to persuade Griffith to make a direct payment of money to Mrs. Gross, that action could easily be perceived by the public as inappropriate unless fully and fairly explained to the public and Griffith himself. The City must keep in mind that actions which may themselves be perfectly legal and ethical are subject to misinterpretation when not publicly explained. We define ethics as knowing the difference between what you have a right to do and what is the right thing to do.

In our opinion, ethical behavior is quite simply the doing of what is right, what is good. In the realm of public governance, that generally means doing what is in the best interests of the citizenry. This should be a simple task. It should not require the burdensome interpretation of legalese or engaging in lengthy analysis in order to discern what is being done for the “public” good or what might be being done for a personal or private good. It would not be unreasonable, in our opinion, for the average person reading the transcripts of the executive sessions held by the City, and without the benefit of a public discussion, to conclude that the City appeared to be orchestrating their powers to specifically obtain a benefit for Commissioner and Mrs. Gross.

While we understand and accept as valid the predicament the City found itself in because of the lawsuit filed against a commissioner’s wife, we are compelled to reiterate once again that it is so often the mere appearance of impropriety that shakes the public’s trust in their elected officials.

Since the City was confronted with such a unique situation (i.e., being involved in litigation with a party the City felt was exerting unfair leverage on them by suing a commissioner’s wife), the City should have been on heightened alert to ensure it did not use or even appear to use its power and/or resources to bring a personal benefit to a particular commissioner and his wife. If in fact the City wanted to “send the message” to the public that it would not tolerate being “blackmailed” by Griffith’s guerrilla tactic lawsuit against Jane Gross, it would have been much more effective to follow a course of action that was as transparent and open to the public as possible. Indeed, it is our instruction that should such a situation ever arise again, every effort should be made to keep the separate litigations separate; they should not be intertwined at all.

In the end, this Commission was itself deadlocked by a 2 to 2 vote as to whether probable cause existed to sustain this complaint or not as to respondents Cruz, Gross and Smith.5 Obviously, Ethics Commission members were swayed by the persuasive arguments of the City. There is no doubt that the City believed it was justified in doing what it did and acted appropriately in dealing with the Jane Gross lawsuit.

We hope this Letter of Instruction impresses upon the City of Miami Beach, as well as all governments subject to our jurisdiction, that they must be mindful that their own best interests and those of their citizens are best served by open, honest and transparent governance regardless of whether it is “legally” or “ethically” required.

Moreover, we again remind the City that the Ethics Commission is always available to provide opinions and guidance to elected and appointed officials and government employees. Had the City presented this matter to us before taking the actions they chose to take, they might well have prevented many of the problems this entire situation has created.

1 Mayor Dermer and Commissioner Smith approved the resolution on its first reading on January 14, 2004.

2 Mrs. Gross owns property on Washington Avenue not far from where Club Madonna is located.

3 The City maintains that the lawsuit brought against Mrs. Gross was, in essence, a sort of “Slapp suit.” A “Slapp suit,” which stands for “strategic litigation against public participation,” is a device available for shutting down and intimidating members of the public who voice opposition to a proposed project. Typically what happens before this kind of suit is filed is that a developer or other applicant seeks governmental approval for a controversial issue. There is an ensuing rally and outcry by concerned citizens, in this case, Commissioner Gross’s wife. In order to intimidate objectors, the applicant files a “Slapp suit.”

4 The Ethics Commission’s Advocate had investigated the identical issues raised in the Complaint approximately one year prior to the Complaint being filed. In his June 21, 2007, “Close-Out Memorandum,” the Commission’s Advocate concluded that under the facts presented: “…it would be difficult to sustain an ethics complaint…”

5 The Commission did make a unanimous finding of no probable cause as to Respondent Murray Dubbin. Earlier the Ethics Commission dismissed the complaint as to Respondents Bower, Dermer, Held, and Gonzalez on motion of the Advocate.

About Charles Branham-Bailey

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