Ponzi King Courted Charlie Crist Aide
Around the State
A top staffer in Gov. Charlie Crist's office and Fort Lauderdale lawyer Scott Rothstein were flying high in 2008.
Shane Strum and Ponzi king Rothstein chatted on Rothstein's chartered jet on their way to the Republican National Convention in Minneapolis, where Crist was on John McCain's short list for vice president.
The two men's conversation, witnessed by others on the plane, focused on how Rothstein's law firm, Rothstein Rosenfeldt Adler, could represent the state in a class-action suit states were pursuing against pharmaceutical firms.
Such contingency arrangements have proven highly lucrative to private law firms. For example, some attorneys pulled down as much as $112,000-an-hour representing Florida in the litigation against Big Tobacco.
Rothstein, who would later be indicted for running a Ponzi scheme that bilked Floridians out of $1.2 billion, was always looking to make a buck. And he wasn't bashful about using his money or his influence to ply politicians for personal gain.
Before he crashed and burned, the high-flying Rothstein had donated millions of dollars to political campaigns and parties across the country, with Charlie Crist being a prime beneficiary. The two were close enough that Rothstein reportedly paid $52,000 for a cake to commemorate Crist's 52nd birthday -- and he helped the governor blow out the candles.
In the summer of 2008, Rothstein shuttled Strum, then the governor's deputy chief of staff, and a handful of others to Minneapolis. The Fort Lauderdale attorney used some of that air time to press his case for a piece of state business.
"It was a major lobby job on Shane. The main focus was RRA's effort to allow it to represent the state in a class-action against pharmaceutical firms," recalls Roger Stone, a South Florida political consultant who was on board.
"The reasoning was, 'rather than do it in-house (through the attorney general's office), let us do it because we know the case," Stone related. Rothstein's 75-attorney law firm reportedly had connections with other states pursuing class-action damages against pharmaceutical firms.
But Rothstein's appeal fell flat because it was Attorney General Bill McCollum, not a political functionary like Strum, who needed to hear the pitch.
"It never went anywhere because McCollum doesn't like (contingency work)," Stone added. The attorney general has long promoted efforts to limit or cap contingency deals, and the 2010 Legislature finally passed a bill that does both.
Ryan Wiggins, spokeswoman for the Attorney General's Office, said, "We have not joined any pharmaceutical class action cases in the consumer or Medicaid areas, although we have investigated and/or litigated several pharmaceutical cases where there might also have been similar class action cases.
"We have not retained any outside counsel in a pharmaceutical case," she added.
Rothstein's bid for business also went nowhere because "he was largely politically inept," said Stone, a veteran political operative who worked on the 1984 Reagan campaign and was a post-presidential counselor to Richard Nixon.
"Rothstein lacked understanding of who's in control. You don't go to the governor to get the attorney general to do something. But Rothstein likes to go to the top, to take the fast track," said Stone, who had set up a consulting business with Rothstein.
Strum, through spokesman Sterling Ivey, said he remembers "talking about the convention and efforts to elect John McCain" during the flight. He declined to answer questions about payment for the flight.
Katie Gordon Betta, spokeswoman for the Republican Party of Florida, said the trip was counted as an "in-kind donation" valued at $2,000 for Strum and $2,000 for Crist attorney (now RPOF counsel) Jason Gonzalez, who also was on board.
Strum is a longtime friend of another passenger, former RRA attorney Grant Smith. Smith would neither confirm nor deny Stone's account and declined to speak on the record.
Though Crist elevated Strum to be chief of staff a year later in October 2009 -- a position he currently holds -- neither Strum nor anyone else is in a position to speak for the governor, Stone believes.
"Crist is his own staff. He's a total control freak. He has minions, not advisers. You're wasting your breath talking to Shane."
While Strum's fly-along failed to produce any business for Rothstein, the big-spending lawyer's empire was tumbling like a house of cards. Within a year, he would be under federal investigation on a series of racketeering and fraud charges.
In a statement issued with prosecutors after entering a guilty plea last month, Rothstein admitted he conspired to lure investors into spending millions to buy stakes in legal settlements that Rothstein's law firm purportedly had struck in employment disputes. In actuality, the agreements were complete fabrications.
Rothstein stated that he and his unidentified co-conspirators used funds from their Ponzi scheme to make political contributions to state and federal candidates in violation of campaign-finance laws.
Prosecutors also alleged that Rothstein laundered political contributions through large bonuses he paid to members of his law firm, which has since collapsed.
Among the biggest recipients was Crist's Senate campaign, which received $100,550 through Rothstein conduits. Since Rothstein's indictment, Crist's campaign has given back $9,600.
The Republican Party of Florida has said it would give Rothstein's $600,000 in donations to a charity. The state Democratic Party said it will return some or all of the $200,000 Rothstein donated.
Facing up to 100 years in prison, Rothstein is scheduled to be sentenced later this month.
Contact Kenric Ward at email@example.com or at (772) 801-5341.