UPDATING: Crist Ally Mendelsohn Busted
Well, another Pulp exclusive has come to fruition: Hollywood ophthalmologist, Republican Party money man and former Charlie Crist advisor Alan Mendelsohn was federally charged today with fraud in connection to the Mutual Benefits case.
Mendelsohn cooperated with feds, telling them that he had made the corrupt deal with Crist's administration to stop the investigation. Mendelsohn made a federally tapped phone call to U.S. Sen. George LeMiuex to try to prove it, but LeMiuex
I'm not sold that Mendelsohn didn't have influence on Crist when he was Attorney General. After Crist's election in 2002, the state investigation cooled on Steinger, as I reported in-depth in June. Coincidence? Maybe, but I think there's a lot more to this story than meets the eye.
Also involved in this corruption probe are Broward County Mayor Stacy Ritter and her lobbyist husband Russell Klenet, as well as former state Sen. Steve Geller, who is now running for county commission against Sue Gunzberger.
Let's get this clear: Steinger had tens of millions of illicit dollars from the Mutual Benefits fraud and was pouring it into politics. His chief goal was to shut down to the state investigation, which was being conducted by the Statewide Prosecutor's Office under the supervision of the Attorney General at the time, Bob Butterworth.
In 2002, Crist ran for Attorney General against Democrat Buddy Dyer, now the mayor of Orlando. Dyer openly asked Steinger for campaign money and was feted in Fort Lauderdale with a fundraiser that raised tens of thousands of dollars for him.
To gain sway with Crist, he went to Mendelsohn who poured Steinger's money into GOP interests with the expressed goal of influencing Crist to stop the state investigation once he was elected Attorney General. But Mendelsohn was part of a small of army of Who's Who high-powered lobbyists and lawyers Steinger had hired to thwart the investigation. Leading the charge was Washington attorney Richard Ben-Veniste, a long-time Steinger chum who is best known as a Watergate prosecutor, the Democrats' counsel in Whitewater, and the 911 Commission. Also working for Steinger: Former Florida Statewide Prosecutor and Deputy U.S. Attorney General John Hogan, former state Deputy Attorney General Peter Antonacci, former Chief Assistant U.S. Attorney Jon Sale, and Klenet.
What cannot be disputed is that after Crist was elected attorney general, the tenor of the state's Mutual Benefits investigation changed dramatically. Steinger, according to sources close to him, was obsessed with getting rid of Statewide Prosecutor Melanie Hines and her chief assistant, Lisa Porter. Crist did replace Hines and Porter, a hard-charging investigator who at times had an openly antagonistic relationship with Steinger and his team, was taken off the case. Steinger personally took credit for this turn of events, though such a move could be explained as normal political protocol for a new AG.
Here's an excerpt from a New Times investigative report into Steinger and his efforts to stymie the investigation:
To really have influence at the Statewide Prosecutor's Office, Steinger needed the attorney general's ear, and he didn't have it with Bob Butterworth, the AG at the time. When election time came in 2002, he backed Dyer strongly but also hedged his bets with Mendelsohn, the Republican fundraiser with strong ties to Crist.
Crist won the race and immediately replaced Hines with Florida Division of Alcoholic Beverages and Tobacco director Peter Williams. The switch wasn't out of the ordinary, and there's no evidence that Steinger had anything to do with Crist's decision -- but sources say he privately took credit for it.
And there is little doubt that Williams was warmer to Steinger's lawyers and lobbyists than Hines. In fact, he met personally with Antonacci less than two months after taking the position. Antonacci wrote Williams a letter after the February 27, 2003, almost pleading with him not to bring a case against Steinger or the company.
"The company has consistently worked with the Legislature to assist in changing and making improvements in viatical legislation to protect policy owners and investors," Antonacci wrote. "... It also is significant that Mutual has consistently given back to the community by contributing generously to charitable organizations which affect patients suffering from AIDS. We are greatly concerned that an ill-advised prosecution would serve to put Mutual out of business, which would bring great harm to numerous innocent individuals."
In August, Antonacci and Ben-Veniste met with Williams and agreed that, should charges be filed against Steinger, he would be allowed to surrender at the Broward County Jail and post a $115,000 bond. On October 29, 2003, Antonacci arranged for Joel Steinger and the statewide prosecutor to meet personally to discuss a "global resolution to the pending investigations," as Antonacci put it in a memo.
Although details of that meeting aren't known, Williams and Antonacci then began drafting a settlement agreement that precluded any criminal charges against Steinger as long as Mutual Benefits paid the cost of the state investigation and put several million dollars in an escrow account to pay premiums on old AIDS policies.
The agreement also forced the sale of Mutual Benefits Corp. to a new entity and barred Steinger from conducting "day-to-day activities of Mutual Benefits." However, it specifically allowed Steinger to remain as a "consultant."
In other words, Steinger would be free to keep playing the same con games he'd been playing.
The federal grand jury was still targeting Steinger, and the delinquent SEC -- which should have shut down Steinger in 1998 -- was finally getting back into the act. On May 4, 2004, just a week after Steinger's big legislative victory, the SEC shut down Mutual Benefits and cleaned out its offices.
Mutual Benefits was finally out of business, but Steinger was still a free man.
You first learned here about Mendelsohn's involvement in the case back in February. Then in June we reported here that Steinger wore a wire for the feds in building the case against Mendelsohn. And there's going to be more to come.