School Candy Machines Rob Taxpayers

After a yearlong investigation, Miami-Dade officials still can't say whether the county has been ripped off by Gilly Vending, which supplies sodas and snacks at county facilities in the northern half of Miami-Dade, in addition to many Miami-Dade and Broward schools and other public places. In court documents and police files, a former Gilly partner claims the company routinely skimmed profits, twice helped former Miami-Dade Commissioner Miriam Alonso launder money and plied county procurement officials with gifts to protect its contract.

Gilly's owner, Gilda Rosenberg, denies it all. She says the allegations were contrived by her ex-partner, Ileana Morales, in an effort to ''extort'' money in a protracted legal battle over the company. Rosenberg founded Gilly Vending in 1983 and gave Morales a 50 percent stake in the company a few years later. ''It was generosity; it was stupidity,'' Rosenberg said in an interview with The Miami Herald.

Their nasty split in 1998 spawned five lawsuits, five appeals and a criminal assault charge against Rosenberg for ramming her car into Morales' sister's car. (Rosenberg pleaded guilty, and her conviction was withheld.) Eight years later, the two remain tied together in one way: Both are listed as possible witnesses in the money-laundering case against Alonso, whose top aide was Morales' mother.

Last year, the head of Miami-Dade's General Services Administration recommended banning Gilly from county business, saying the company's financial reports were "neither reliable nor accurate.'' Last week, county officials agreed to continue doing business with Gilly, after the company promised to provide better financial records -- and pay the county more money. Despite the allegations, Gilly is now poised to win a new contract expanding its business to all county facilities. That deal must still be approved by county commissioners.

''I didn't do anything illegal,'' Rosenberg said. "I wouldn't be doing business for 25 years if I was doing anything wrong.'' Under its current contract -- first awarded in 1995 and renewed several times since -- Gilly Vending is supposed to pay the county 30 percent of the income from the snack and soda machines at county buildings north of Flagler Street.

The county received $95,441 in commissions from Gilly last year.
But in court hearings four years ago, Morales said the company routinely skimmed the nickels and dimes taken from machines before adding up the company's income -- concealing Gilly's true profits and lowering its payments to Miami-Dade.

''Gilly Vending never paid 30 percent in commission,'' Morales testified. Rosenberg and her lawyers deny Morales' claims. Rosenberg noted that she used the nickels and dimes to buy supplies from a wholesaler.

Gilly attorney Tim Crutchfield said that many company records could have refuted Morales' charges -- including detailed meter reports generated by the vending machines -- but they have disappeared. However, a financial expert Rosenberg hired to determine the value of the company also concluded that Gilly had underpaid the county, court records show. Crutchfield said the expert's findings were wrong, and argued in court papers that the nickels and dimes added up to only about $500 a week.

County Auditor Cathy Jackson told The Miami Herald that Gilly's income reports before 2003 were not verified with meter reports -- and some of the records the company did provide contained "a lot of discrepancies. She admitted her record-keeping was not as good as it should be,'' Jackson said. Rosenberg and her accountant insist they provided all the records requested by auditors, and said the report found only minor bookkeeping flaws.

Morales talked to the Miami-Dade police. She described Gilly Vending's role in Alonso's alleged scheme to steal campaign money. She said checks to Gilly from Alonso's 1996 campaign were converted to cash for Alonso and her husband. Rosenberg told detectives she provided two fake business receipts for the Alonso campaign at the request of Morales' mother -- but she said she didn't know how the receipts were used, records show. In campaign-finance reports, Alonso said Gilly Vending was paid $14,000 for ''phone bank'' work. Alonso and her husband are accused of using bogus business receipts to conceal their theft of about $105,000 from three campaign accounts -- but not for the 1996 campaign.

Miami-Dade County is just one of Gilly Vending's many public clients. The company also has machines at the Port of Miami and Miami Dade College and in many Miami-Dade and Broward schools. Rosenberg has offered to increase her payments to Miami-Dade from 30 to 41 percent if she wins the new countywide vending contract. She also has guaranteed the county a minimum of $250,000 a year, and tossed in an extra $37,500 to the county "as a good corporate citizen.''

Wendi Norris, the director of Miami-Dade's GSA, said in a memo that the arrangement ''repays the county for any potential undercounting in the past.'' But Rosenberg and her lawyer, Alex Heckler, insist that Gilly never cheated the county in the first place. ''It in no way is restitution,'' Heckler said of the $37,500.

Rosenberg said political connections have not played a part in her success. "I am straight as an arrow. I don't need any favors.'' But one county worker described Rosenberg to Miami-Dade public-corruption detectives as "aggressive in her business contacts.'' The police were investigating accusations -- again raised by Morales -- that Rosenberg gave county employees gifts to protect her contract. Morales told investigators that she passed sealed envelopes to three GSA employees for Rosenberg. One employee admitted receiving ''trinkets'' from Rosenberg years ago, but the police closed the investigation with no arrests. Rosenberg called these accusations "a plain bullshit lie.'' ''We give out a lot of baskets'' of slow-selling chips and chocolate, ''to try to keep momentum,'' Rosenberg said.
But ''nobody is going to sell themselves for a basket of chips,'' she said. (excerpted from the Miami Herald)

Commentary: First of all, in Miami, any government official will sell their ass for a bag of potato chips. So what's this all about? A couple of lesbians split up and then their matrimonial property dispute leads to allegations of widespread corruption in the Candy Machine business? Is there nothing above corruption in Miami??? Is Miami the ultimate cesspool of corruption? Can't even the school candy machines be free of the taint of public corruption?