Here’s how developers got around strict campaign finance laws this special election
Russell Galbut is one of Miami Beach’s most powerful real estate developers. He is behind some of the city’s premier projects in recent years, like the Five Park condo tower at the gateway to South Beach on Alton Road.
Campaign finance laws in Miami Beach aim to restrict deep-pocketed developers like Galbut from currying favor with elected officials. Developers and lobbyists seeking certain city approvals, as well as active city vendors, are barred from donating to campaigns under rules that have expanded over the past two decades.
But the restrictions didn’t stop Galbut — or, at least, his family — from making a mark in a recent special election to fill the late Mark Samuelian’s city commission seat. Galbut’s wife, Ronalee, made a $1,000 maximum donation to candidate Sabrina Cohen, according to campaign reports.
The city’s laws, which are among the strictest in MiamiDade County, say Galbut and others on a list maintained by the city clerk’s office can’t give to campaigns, either “directly or indirectly.” Still, the contribution from Galbut’s wife would be allowed under the rules unless the money came from Galbut himself.
“Married for 44 years and have never told my wife what to do,” Galbut said in an email, saying his wife is a close friend of Cohen. “Other than that I know nothing about the check you refer to.”
The wife of Jeffrey Bercow, a lobbyist for developers who is also on the prohibited donor list, made two $1,000 contributions to Cohen. Bercow said his wife, Julie, is “an inde
pendent person who makes her own decisions regarding political and charitable contributions.”
SOME UNINTENDED CONSEQUENCES
A Miami Herald review found that, despite the city’s efforts to curb the influence of money in politics, Miami Beach developers routinely circumvent the rules and contribute to campaigns in various ways.
More than $120,000 donated to campaign accounts and political committees tied to Cohen and Laura Dominguez — who defeated Cohen in a Dec. 6 runoff — came from developers or other real estate interests, according to campaign reports that list the occupation of each donor.
That accounts for at least 20% of their total contributions.
“While we believed that our campaign finance legislation would effectively address the problems, people found ways to get around it,” said Jose Smith, a former Miami Beach city attorney and a city commissioner when the campaign finance reforms were enacted in the early 2000s.
In many cases, developers are allowed to donate because they don’t have pending projects before the city, exempting them from the rules. Only those seeking a development agreement or a change in the city’s land use or zoning maps are restricted.
An entity tied to developer Michael Shvo’s real estate firm gave $5,000 to a political committee that supported Dominguez’s campaign, even as Shvo worked on a $750 million redevelopment of the historic Raleigh Hotel.
Shvo and other lobbyists for the project were named on the city’s prohibited donor list, but City Attorney Rafael Paz said they didn’t belong there because the Raleigh owners weren’t developers under the definition in the campaign finance code. Paz said Shvo only appeared on the list because Shvo checked “yes” on a lobbyist registration form that asked if his project involved a development agreement or land use change.
Even if Shvo were considered a developer, the donation may have been allowed under the city’s rules for giving to political committees.
The campaign finance ordinance was expanded to address PACs in 2016 after a committee raised over $1 million from local developers, lobbyists and vendors. But while the change meant candidates couldn’t actively seek donations from prohibited donors, developers were still allowed to contribute as long as a candidate didn’t solicit them.
Dominguez said she didn’t solicit the contribution from the Raleigh owners and wasn’t even aware it had been made. Shvo could not be reached for comment on what led to the donation.
Generally, Dominguez said, she only mentioned the PAC to potential donors if they asked her which committee was backing her candidacy.
“I wasn’t involved with the donations,” she said.
Neisen Kasdin, a former Miami Beach mayor who now does lobbying work in the city, said he believes the city ordinance has actually led to candidates relying less on their campaign accounts and more heavily on PACs, where contribution amounts aren’t limited and prohibited donors can more easily conceal their involvement.
“A lot of these restrictions were done under the banner of reform and good government, but what they succeeded in doing, basically, was making it more opaque and less transparent,” Kasdin said. “You actually enhance the concentration of money through PAC giving.”
Anthony Alfieri, a law professor who leads the University of Miami’s Center for Ethics and Public Service, added that campaign contributions from family members or corporate entities tied to people who are technically prohibited from donating “frustrate the regulatory purpose of [the city’s] legislation, notwithstanding political speech right claims to the contrary.”
AN IMPERFECT PROCESS
Most of the contributions reviewed by the Herald appeared to comply with the city’s rules.
In one case, an entity registered to the owners of the International Inn on the Bay hotel, Belsa and Ricky Tsay, gave $1,000 to Dominguez’s campaign despite being named on the city’s prohibited contributor list.
But city officials said they should have been removed from the list last year. The hotel on Normandy Drive reached a development agreement with the city in late 2020, resolving a dispute over the hotel’s historic designation. The city’s rules bar campaign donations for one year after a development agreement is reached.
The error demonstrates how the city ordinance creates an imperfect and difficult process — both for the city clerk’s office that oversees the prohibited donor list and for the candidates who must comply.
Dominguez, who was sworn into office earlier this week, said she or her campaign treasurer would check each donation to her campaign against the names of the prohibited vendors, lobbyists and developers.
“You see how cumbersome it is,” she said. “I can sympathize where a candidate can make a mistake.”
Donors who violate the ordinance can be fined $500. They can also lose contracts or be disqualified from city business for a year. A city spokesperson said there is no record of a vendor, lobbyist, developer or candidate ever being fined or otherwise disciplined for breaking the rules.
Experts say it’s unclear if the city ordinance would pass constitutional muster against a legal challenge, which it has yet to face.
Bob Jarvis, a law professor at Nova Southeastern University, said the law appears to conflict with the U.S. Supreme Court’s “Citizens United” decision in 2010, which broadly prohibited the government from restricting campaign contributions by people or corporations.
The ordinance “singles out various groups and says, ‘You don’t get the benefits of the First Amendment like other Americans,’ ” he said.
Regardless, Jarvis added, “it doesn’t matter because it’s so easy to get around the ordinance.”
“This is Swiss cheese,” he said.
OTHER WORKAROUNDS
In addition to donations from family members and contributions to PACs, the Herald identified several other ways developers can play a role in Miami Beach campaigns:
The city’s rules apply to projects with pending development agreements, but leases of city-owned property don’t require such agreements. Rishi Kapoor, a developer whose name was removed from the prohibited list earlier this year after city officials said it had been “erroneously” added, is seeking to lease a cityowned parking lot at 13th Street and Collins Avenue. While the project requires city approvals, it doesn’t require a development agreement. Entities connected to Kapoor gave $10,000 to the political committee backing Dominguez and another $10,000 to a PAC chaired by Cohen. Kapoor could not be reached for comment.
The rules address candidates but not ballot referendums. That’s why entities tied to Miami Dolphins owner and developer Stephen Ross could give nearly $1.9 million to a PAC supporting a November ballot question regarding the former Deauville Beach Resort site. Meanwhile, developers vying for leases near Lincoln Road gave almost $1 million to a PAC promoting a trio of ballot questions. (The ballot questions failed.)
The city restricts contributions in city elections but not in state or federal elections. Miami Beach commissioners running for higher office in recent years have received confirmation from the city attorney’s office that they can solicit donations from people on the city’s prohibited donor list. That includes Kristen Rosen Gonzalez, who ran for Congress in 2018; Micky Steinberg, a former city commissioner who ran unopposed for county commission this year; and David Richardson, who launched a state House campaign earlier this year before dropping out.
Aaron Leibowitz: 305-376-2235,