"Florida Agency Clears County Official of Conflict of Interest in Airport Deals"

Thursday, June 10, 2004

Florida Agency Clears County Official of Conflict of Interest in Airport
Deals
The South Florida Sun-Sentinel


The state Ethics Commission has cleared Broward County Commissioner John
Rodstrom of any wrongdoing when he fought to scale back expansion of the
Fort Lauderdale-Hollywood International Airport at the same time he was
helping Miami finance expansion of its airport.

Investigators said in their report released Tuesday there was not enough
evidence to conclude Rodstrom profited from his votes or his decisions
had been influenced by his business interests. They also dismissed a
complaint that he violated the conflict-of-interest laws by handling a
bond deal for the city of Hollywood, a key critic of the airport
expansion.

The Ethics Commission's decisions were a major coup for Rodstrom, coming
less than three months before he faces a re-election challenge. His
change of heart on building a second runway has been a central issue in
the campaign.

Citing corporate policy, Rodstrom referred questions to the bond
underwriting firm he works for, Citigroup Global Markets. A spokeswoman
would say only that the firm was pleased with the rulings, but other
county commissioners depicted it as vindication for Rodstrom.

Rodstrom told investigators during their yearlong review that he began
to question the runway project when he realized the depth of opposition
within his district and saw new information on the environmental impact
and cost of the work. He said the timing of the Miami and Hollywood bond
deals was coincidental.

"Having served with John and watching him struggle with the airport
issue, I knew it had nothing to do with his outside employment, but the
amount of information he had received," County Mayor Ilene Lieberman
said. "I never felt John had any conflict."

In 2002, Rodstrom brokered a $299 million bond issue for Miami
International Airport as part of his work as an underwriter at
Citigroup, then known as Salomon Smith Barney. The deal hinged on
Miami's continued dominance in the market, and records showed the Miami
airport was concerned that more competition from Fort Lauderdale could
harm its ability to pay for massive construction plans.

Then last year, the city of Hollywood enlisted Rodstrom and Citigroup to
sell $115 million in bonds. At the same time, city officials were
lobbying county commissioners to reconsider the airport expansion.

Florida ethics law prohibits officials from voting on matters in which
they have a financial interest, and two Fort Lauderdale residents
supporting the airport expansion filed complaints against Rodstrom. He
could have faced removal from office, a fine of up to $10,000 per
offense or forfeiture of part of his salary as a commissioner if the
Ethics Commission decided he acted improperly.

Investigators concluded there was no conflict in part because Miami and
Hollywood chose Citigroup as an underwriter long before commission votes
on the airport expansion. With the Miami deal, they also said the impact
of the expansion on competition between the airports was "speculative at
best."

Citigroup earned $519,400 as lead underwriter on the Miami bond deal and
$311,966 on the Hollywood deal, according to the investigative report.
Although Rodstrom does not receive a direct commission for deals he
handles, the company rewarded him in 2002 with a $320,000 bonus for
producing more than $10.6 million in revenues, the report stated.

Rodstrom's challenger in the August Democratic primary, airport activist
Randy Dunlap, said he was not surprised by the decision, but depicted it
as misguided. He criticized Rodstrom for not revealing his business
connections during the airport debate.

"It was not so much whether John was a criminal and sold his vote, but
his obligation to disclose his relationship," Dunlap said. "He has an
obligation to acknowledge that he had a financial relationship with a
competitor. With government in the sunshine, people have a right to know
what is going on."


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