State Attorney Formally Closes Finance Investigation Against David Rivera

MIAMI (CBS4) – Congressman David Rivera is in the clear when it comes to accusations from the State Attorney's Office that he violated campaign finance laws.

State Attorney Katherine Fernandez Rundle released a final closeout memo officially closing the case against the embattled congressman.

"We are compelled to acknowledge at this time that we, along with our police partners, have exhausted all active criminal investigation avenues as to the allegations investigated," the memo read, in part. "As part of this inquiry we have been confronted with the fact that an elected official over a period of many years may essentially live off of a combination of contributions made in support of public office candidacies, contributions made in support of internal political party position candidacies, and indirect payments made as consideration for efforts as a political strategist while avoiding penal sanction."

For more than a year, Rundle has been investigating Congressman David Rivera for the possible violations.

The investigation, conducted by the Florida Department of Law Enforcement, focused on Rivera's years in the state legislature. Investigators discovered that Rivera collected hundreds of thousands of dollars in unreported donations.

But State Attorney Katherine Fernandez Rundle has decided there is nothing her office can do about the payments, because the donations were made under a little-known loophole in the campaign finance laws.

Click Here To Read The SAO Close Out Memo

CBS4 News also obtained a copy of FDLE's investigative summary of the case, which it presented to the state attorney's office on July 29. The FDLE report accuses Rivera of essentially living off of the money he raised for his political campaigns. "After a thorough analysis, FDLE identified a pattern of activity in which Mr. Rivera was utilizing funds collected during his political campaigns to defray personal expenses not related to campaign activity," the report states.

Click Here for FDLE's Investigative Summary

It noted how he paid off his personal credit cards with campaign money. "A review of Mr. Rivera's personal finances did not substantiate the legitimacy of these reimbursements," the FDLE noted. "From 2006 through 2010, FDLE identified approximately $65,000 in what are believed to be non-campaign related credit card charges that were paid for with campaign funds. These expenses included but were not limited to, pet services, dry cleaning, dental care, medical services, entertainment and travel expenses for his girlfriend."

The report also suggests Rivera double dipped his expense reports – seeking reimbursement both from his campaign and from the state for the same expense. "From 2006 through 2010, approximately $29,500 in charges were paid by campaign funds, even though Mr. Rivera was personally reimbursed for these same charges by the State of Florida and/or the District 112 office account."

The FDLE report also confirmed findings made by both The Miami Herald and CBS4 News that showed how Rivera provided false and misleading information on his financial disclosure forms. "Analysis of documents obtained to date supports the contention that Mr. Rivera purposely falsified his financial disclosure forms in an attempt to legitimize other source of income beyond his salary as a State Legislator," the report states.

Despite the overwhelming evidence of questionable conduct by Rivera, prosecutors were not able to charge him for two primary reasons, according to sources familiar with the investigation. First, in many cases the two-year statute of limitations had run out. And second, Rivera's reliance on the loophole in state law.

The decision by the state attorney did not come as a surprise. In December, CBS4 News and The Miami Herald first revealed the existence of this loophole -- a 14 word clause tucked in among the 31,890 words of the state's campaign finance law. The provision exempts candidates for a political party executive committee office from the campaign finance laws.

Between 2002 and 2010, Rivera ran for at least four of these political party positions including Miami Dade Republican State Committeeman.

State committeemen and women are usually unknown party functionaries that have little power or clout.  Nevertheless, using the relatively obscure position of Republican Party State Committeeman, Rivera was able to raise unlimited amounts of money and spend it with no oversight whatsoever.

Although Rivera is now clear of state charges, he remains under federal investigation for possible tax evasion.  The FBI and IRS are examining $510,000 in payments from Flagler Dog Track to a company, Millennium Marketing, created by Rivera's godmother, Ileana Medina, and which Rivera's mother, Daisy Magarino, is now listed as an officer.

CBS4 News first revealed the secret payment between Flagler and the company, Millennium, in December 2010. The payment was made for Rivera's work on the 2008 referendum that brought casino style slot machines to Dade county tracks.

The feds are examining when and if taxes were ever paid on that money and if Melennium Marketing was merely a front to hide payments being secretly made to Rivera. The federal investigation is expected to be completed in the coming months.