Since last September, we’ve been following the saga of fraudulent budget foisted upon the North Miami Mayor and Council by City Manager Larry Spring and Deputy City Manager Arthur “Duke” Sorey.

As is usually the case in North Miami, the rampant corruption at City Hall only comes to light when an honest employee blows the whistle … and then gets fired for doing so.

In this particular case, the now-former Assistant Budget Director Terry Henley, who had been warning management for over a year about a looming deficit, was scapegoated and abruptly fired on September 19, 2018 – one day after the budget was passed.  Mr. Henley appealed his termination, and was finally granted a hearing before the Personnel Board on January 23 and January 24 of this year.

As you might expect, his hearing was not only popcorn-worthy, but also revealed that the corruption in the North Miami City Manager’s office is even worse than anyone imagined.

The first installment in this series covered Day 1 of the hearing, which was the testimony of Deputy Duke.  In the second installment, we reported on the first half of the hearing with Terry Henley on the stand.  The following is the rest of the Day 2 testimony.

By June of 2018, North Miami Deputy Manager Arthur “Duke” Sorey realized he needed to distance himself from the coming financial disaster (page 45 of the transcript).  In order to do so he told the City Council that he had no involvement in the budget anymore

Which, of course, was a complete lie.

The coming storm

On June 19, 2018, right before his first written reprimand by Duke,  Mr. Henley wrote his second memorandum (Exhibit 12) in order to document the nefarious deeds being perpetrated by management.  Knowing full well the treachery City Manager Larry Spring and his trusted Deputy are capable of, Terry Henley needed protect himself from becoming just another piece of collateral damage at their hands.

In his memo, Mr. Henley wrote, “On June 18, 2018, I was called to the Deputy City Manager’s Office to discuss the hard-copy report I submitted, General Fund Reconciliation Draft June 13, 2018, that detailed a S22M deficit in the development of the FY19 Preliminary Budget. I explained that after omitting supplemental requests and raises, the true deficit is less than $8M and is the result of growing operational expenses, the hiring of unbudgeted employees, exceeding the general fund budget for three years ($1.6M in FY16, SIM in FY17, estimated SIM in FY18), and the Deputy City Manager’s direction from the City Manager to add nonreoccurring revenue in the FY18 budget of $3M from SoleMia and $2M from Costco at SoleMia. The Deputy City Manager, Arthur Sorey, stressed that he told Council he has nothing to do with the Budget and the consequences will be all my fault and he ‘felt sorry’ for me and that I would be ‘the fall guy on this one’.

Terry Henley realized he was about to be scapegoated when in November of 2017, the job he had been doing for the past three years was advertised by the city.  On the other hand, he had just received a pay raise.

He continued his testimony (page 46) by saying, “And they just gave me a pay raise and it was very confusing. I’m doing what they’re telling me to do. They have all these years of experience. Arthur did the budget for two years. By this point, this is my fourth one I’m proposing. Larry Spring, his financial management background — I’m like, I got to trust these guys; they know what they’re doing. But the Chief of Staff told me I should document — or she told me to Google Larry, and I did. And I’m like I’m not going to be — I’m not going to get myself in that same situation.

When his attorney, William R. Amlong asked him if the city was trying to float a bond issue in 2018, Mr. Henley responded, “Right. In 2018 we were spending like crazy assuming like we already got the bond.”

Terry Henley was referring to that boondoggle General Obligation Bond that Larry Spring and Duke Sorey were so desperate to push through.  Fortunately, it was soundly defeated by nearly three quarters of North Miami voters last May.

When Mr. Amlong asked his client if he was aware of the necessity for accurate financial data in order to lure Wall Street had the bond passed, Mr. Henley concurred.  He added, “That’s also why I started writing these memorandums. I didn’t want to be the fall guy. And I didn’t want to have my name, my signature, on any bond documents that says the full faith and credit of the City I certify that these are the true finances. Absolutely. Because it was misrepresentation. It was — that’s the direction it was headed.

In that same June 19, 2018 memo, Terry also wrote, “The Deputy told me again that I was at fault and needed to fix this because, if I am not fired first, I will be next after the City Manager is fired around September/October this year”

Interesting how Deputy Duke was already counting on his boss, Larry Spring, getting fired!

Just saying.

Mr. Henley ended his June 19th memo with, “The [Budget] Director position is still advertised to date and I have had no discussions with management about it. The City Manager has not given me any negative feedback about my performance. I was told by Personnel that the Deputy was the one who requested the advertisement. From what I have gathered about the Deputy City Manager over five years of working with him is that he is ethically challenged and responsible for the termination, hiring or relocation of many employees (in one case to Tampa) in North Miami for his own benefit.”

“Fifteen million in the red”

Terry Henley further explained that even with cutting all unnecessary projects, the city was still “fifteen million in the red” (page 52).  Two of the reasons were the cost of hiring of unbudgeted employees and the city’s plan to subsidize the garbage pick-up.

By way of example Terry said, “If the City Council appoints or approves a budget that doesn’t have a wellness coordinator in it, how does the wellness coordinator show up and collect a check for 65,0000?”

How indeed!

Mr. Henley further testified that he emailed Spring and Sorey about the $15 million projected deficit on July 14, 2017 — adding, “And July 14th is a Saturday, by the way. I do work weekends,” contrary to the lie told by Duke that Terry never worked nights or weekends.

Not only was Larry Spring attempting to keep the bad news from the City Council, he wanted to bury it from everyone at City Hall (page 57).  Terry testified about meetings with senior staff during the budget process in which Larry Spring “told everyone that there was a deficit. But he told me in front of the entire room, ‘Don’t tell them what the number is.'”

Beginning on page 60 of the hearing transcript, Terry Henley discussed his August 1, 2018 memorandum (Exhibit 13) in which he described a joint meeting with Deputy Duke, the budget coordinator and the budget analyst.  During this meeting, Terry brought up the fact that building department revenue can’t be used to balance the budget.

That’s when Duke lost all control and hurled F-bombs in the presence of everyone in the room.

Terry wrote, “The Deputy went on a verbal rampage cursing me out and screaming in front of the entire staff.  He said ‘Fuck’ a dozen times as he said it was my fault he was going to have to terminate people and I am to blame, especially since I am not working the weekends like him and this deficit is my fault, as I am not doing the work.”

As a result of Mr. Henley’s exposing the truth about the budget, he was again given a written reprimand, this time for his “lack of effort and attention to detail.”

WTF?

If anything, Terry was unrelenting in his “effort and attention to detail” in order to produce a legitimate budget.

In his memorandum, Henley wrote, “The allegation is a vague, bogus attempt to blame me for a budget crisis cause by management’s overspending and fake non-reocurring revenue.”

It’s the law!

Mr. Amlong then brought up the building department revenue (page 73), which we have already learned was prohibited by Florida Statute 553.80 to be used as revenue for the city’s budget.

As if on cue, the city’s lawyer, Brooke Erhlich, objected to this line of questioning on the grounds that “Mr. Henley’s understanding of that has absolutely nothing to do with the City’s discipline against him.”

When Mr. Amlong explained that his client was being disciplined for telling Duke it was illegal to use the building department revenue in the budget, lawyer Ehrlich said (page 76), “I don’t understand this.  The Florida building code and Mr. Henley’s interpretation of the building code has nothing to do with any of the discipline in the record that has been presented to this Board.”

Mr. Henley’s “interpretation?”

Perhaps if Madam Lawyer had attend a few Continuing Legal Education (CLE) classes, or at the very least cracked open a West’s Florida Statutes book, she’d know that municipal law is straightforward and hardly in need of interpretation by anyone – especially by a bush league lawyer.

Just saying.

At that point (page 76), North Miami Assistant Attorney Jennifer Warren who, unlike Ms. Ehrlich, appears to have actually studied municipal law, completely disagreed with Ms. Ehrlich’s “interpretation of this objection.”

Yeah, that was pretty awesome.

Ms. Warren also concurred that Mr. Amlong’s line of questioning is legitimate “if we’re expecting the budget director to follow the laws and balance our budget legally, not to make a sham budget that makes the City look good.”

After a Personnel Board member suggested that this line of questioning goes to whether Mr. Henley is incompetent or insubordinate, Ms. Warren opined, “It does. I actually do believe it does go towards that because the performance of his job is to make a legal budget, not to make numbers add up to what we want them to look like.”

Phantom Money

Desperate to shut Mr. Henley down and prevent him from revealing even more of the city’s legal violations, Ms. Ehrlich said “I would make an objection of we have beat a dead horse here and that we should — I think we all understand Mr. Henley’s point of view and we can move on to other subjects besides the building department.”

Mr. Amlong wasn’t having any of that.  He continued questioning his client about Duke’s insistence on using restricted building revenue to balance the budget (page 79), to which his client responded, “And that’s why I got written up when I expressed to the Deputy City Manager. And he cussed me and then sent me home.”

After that meeting on July 30, 2017, Deputy Duke got “very involved” in the budget process.

You will recall that when Duke was asked if he knew what GASB63 was and he had no clue.  Now it was Terry Henley’s turn to respond to the same question.

On page 80, Mr. Amlong referred to Exhibits 19A, 19B and 19C, and asked him to explain.  As we noted in our previous post, “GASB is the acronym for the Governmental Accounting Standards Board.  According to its website,  GASB was “[e]stablished in 1984, the GASB is the independent, private-sector organization based in Norwalk, Connecticut, that establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles (GAAP)”

Mr. Henley explained, “So what it says is that money that came in after September 30th, that money can’t be included for last year, so last years you need to make — let’s say it was 1.5 million. You need to make that entry negative 1.5 million for last year and then make it positive 1.5 million for next year. You can’t record it twice because of the date that it came in.”

But, Deputy Duke, on the other hand, ordered Mr. Henley to use money collected during the previous year and use it for the present projected revenue.  Or, as Terry put it, “This is another example of plugging a deficit with phantom revenue.”

Mr. Henley then went on to explain (pages 81 through 85) why he was written up for insubordination for pointing to Deputy Duke, who didn’t want to hear the truth, that he was double counting the same revenue from one year to the next.  Terry testified, “And if you look at the auditors’ report at the end, they’ll agree with me. So this is another revenue source and it’s what contributes to ongoing deficits.”

Mr. Amlong then referred Terry to his memos dated September 3, 3017 (Exhibit 18) and September 15, 2017 (Exhibit 18a), the second of which Terry pointed out was written on a Saturday.  “I was here at the office working. I work on Saturdays and I also wrote a memorandum because we had the budget hearing was on the 17th.”

No matter how hard he tried to get Deputy Duke to understand the GASB accounting, Terry testified that Duke ordered him, “Add this 1.3 million for GASB 63 for next year,” and he hangs up. I got to put it in. I can’t get written up again because I’m going to get fired.”

Between a rock and a hard place

Mr. Henley then testified that he was told to do an analysis of the temporary employment contracts (TEC) for the city (page 187).  (Note: According to our public records request, as of December 13, 2018 there were 177 temporary employees on contract with the City of North Miami.)

He explained that he had a difficult time completing this task because the department heads weren’t cooperating with his request.  He said, “And I had very little compliance or assistance. To get this — part of this three million dollar cut, it was including TEC, or Temporary Employment Contracts. That’s areas where we can cut. Considering we were hiring all these new full time employees, you know, it’s less temporary employees we need.”

Terry found himself caught in the middle.  Duke told him to make these cuts, but Larry Spring ordered him not to.  The department heads flat out refused to comply.  At that point, Terry began looking for another job.

Deputy Duke, who knew full well that the finances are a disaster, began to panic and told Terry “it’s either going to be you or Larry but one of you has got to be fired because someone is going to be blamed for this.”

On September 11, 2018, Spring and Sorey requested a status report on the TECs (page 90), who told them the department heads refused to make any cuts and that it was not his authority to tell them which employees to cut.  The human resource director agreed that it was up to the directors to make that decision.

Terry testified (page 91), “Considering that the City Manager was telling department heads not to cut, the Deputy City Manager was telling me to make cuts. It was a losing situation. I explained this to the Deputy City Manager over the phone. He told me it was my responsibility. I asked why management did not support me in my earlier effort to make cuts and why was this last minute, and the Deputy hung up on me.”

And finally, Terry testified that the “little snowball that eventually became a lot bigger” was the inclusion of the Sole Mia $4.9 million in the previous year’s budget.  It complicated everything because, as Terry testified (page 93), “No, the three million for Sole Mia buyout never came in. And the two million for Costco, it came in, but we used it to balance the budget. We planned it. We used it to balance the budget. We were told — Council gave direction to send it back. It’s still here. Well, it’s spent because it’s part of the operations.”

Mr. Amlong then asked Terry if he reminded Spring the money was to be sent back to Costco, he replied, “Yeah, I reminded him because there was a meeting in April. It was an earlier meeting, a Council meeting, when they said to send it back. And at an internal meeting, a staff meeting, when everyone left, I said, ‘Hey, you can’t put that in the super reserve. We’re using that to balance the budget.’ And he said he didn’t know about it. And I’m not going to repeat what he said after that.”

When the Council asked Larry Spring if the Costco money was included in the budget, he flat out lied to them (page 94).

Deputy Duke told Mr. Henley that Larry Spring wanted to meet him at City Hall on September 1, 2018 at 9:00 a.m., which was a Saturday.  Spring never showed up, so Mr. Henley texted him that there was still a $4.9 million deficit.  Spring was upset with the text – it being “sensitive information” – and called to order him to use $3 million from the reserves to plug the hole (page 96), which left only $7.3 million in the unallocated reserves account (page 98).

Mr. Henley wrapped up his testimony by testifying that during the six week period between the time of the first budget hearings and the final passage of the budget, he was written up twice despite all his previous outstanding evaluations.

The sacrificial lamb

In the end, Terry Henley made all the changes that Spring and Sorey ordered and on September 14, 2018 he turned in a budget that he knew was fraudulent because, as he put it (page 100), “I can’t fight them anymore because I’m going to get written up again.”

It didn’t matter.  His firing was already preplanned.

He testified, “At 5:30, as soon as I give to the City Manager’s executive assistant, I give her the final budget to post online, minutes later after I finish all the legwork, he calls me — Deputy City Manager calls me into his office and he hands me a write-up that says September 12th.” — two days earlier!

When Duke told him it’s not working out, Terry said, “You know what? I know what this is. Because you warned me about this 18 months ago. You warned me that I was going to be the fall guy.”

Worse, it appears  that the Mayor and Council were completely aware of the situation.

Mr. Henley continued testifying, “By that time they had already decided they were going to fire me because when it came to the budget hearing on Monday virtually no one on the Council asked me any questions when all the prior budget hearings, the last four — the last three that I did, I had one on one meetings with all of them. This year? None. And then the second budget hearing no questions asked of me. Astonishing. Very coincidental. Twelve hours after the budget hearing finished, I wake up at 6:00 a.m. The email doesn’t work on my phone.  So 12 hours after it finished, at like 9:00 or 10:00 p.m., 9:30, I’m getting separation papers. They started to explain them and I’m like, ‘No. I know what this is.’”

The city offered Mr. Henley a severance package of four weeks, and he countered with twenty, which is the maximum allowed by Florida law.

He testified, “By state statute I can get 20 weeks. I wasn’t even sure if I was going to take it anyways because just because you take a severance that the SEC, the state, federal government, the county, can’t come after you because my name is on this. I had legal representation. I was put in a situation, a losing situation. I didn’t have any choice. I can’t be looking behind my back seven years from now wondering if someone is going to come looking for me because of what I did in North Miami seven years ago when I took a four to six week severance.”

Considering how Larry Spring threw his previous budget director, Michael Boudreaux, to the wolves at the City of Miami, Terry Henley was taking no chances.

The Cross

The city’s outside lawyer Brooke Ehrlich then began to cross examine Terry Henley (page 107) for the sole purpose of trying to discredit everything he said on the stand.  But, no matter how hard she tried to trip him up, it didn’t work.

Ehrlich first asked him why he left his job with the Florida Department of Transportation.  Even though he replied that his position was dissolved because FDOT decided to hire an engineer instead, she insinuated that he was fired.

She then zeroed in on his most recent Performance Evaluation Report signed by Larry Spring on March 9, 2018, in which he gave Mr. Henley his first ever “Needs Improvement” rating in “Reports and Correspondence.”  As expected, she badgered him about this (page 109), despite the obvious fact that this rating was unwarranted.  You will recall that by the time Spring got around to signing off on this report, he and Duke were already conspiring to get rid of Mr. Henley.

Ehrlich then brought up a July 20, 2018 memo written by Deputy Duke noting the time he had that F-bomb temper tantrum and sent Terry Henley home for the rest of the day (page 113).  Duke called it an “administrative leave.”

She questioned Mr. Henley:

Ehrlich: And in that memo Mr. Sorey notes that he’s had lengthy discussions with you about oversights in the budget; isn’t that right?

Henley: That’s what it says.

Ehrlich: The memo also notes that on numerous prior occasions you were advised of your lack of effort and attention to detail; isn’t that true?

Henley: That’s what his memo says.

In other words, Duke lies all the time.  Just because Duke says something doesn’t mean it’s true.

The badgering continued with Ehrlich asking Mr. Henley about the discipline he received and if he appealed it.  He responded, “No. I knew it was bogus and appealing it wouldn’t help.”

No kidding!

Every North Miami employee knows that when Spring and Sorey want to falsely accuse you of something and make you the scapegoat, they make damn sure no one gets in their way.

Just ask former North Miami Police Commander Emile Hollant.

Lawyer Ehrlich continued, “And in early August, based on your own testimony, you were asked to do an analysis of the TEC [temporary employment contract] employees to determine whether they were operational, whether there were operational and administrative necessities to continue those contracts in the coming year, correct?”

Mr. Henley again explained that he met with department heads to discuss the cuts needed, but none of them were willing to cooperate.  He was also undermined by Deputy Duke himself, who said he was cutting $500,000 from the police department, according to the city’s own exhibit (page 117) and then hired 25 more cops.

News flash, Duke.  That’s not how you do it.

(Note: North Miami provided its own list of exhibits)

Mr. Henley also brought up Code Compliance Manager Crystal Kordo, and Parks & Rec Director Derrick Corker, both members in good standing of the Deputy Duke’s Friends & Family Plan, and both of whom defiantly told him to take a hike (page 119).

The Smackdown

Brooke Ehrlich then brought up the dated and notarized memos that Terry Henley wrote documenting Duke Sorey’s skullduggery that led to his wrongful termination.  She even insinuated that he didn’t write them as the events were occurring but after he was fired.

Ehrlich: But how do we know what date you prepared this?

Henley: Well, have you ever got anything notarized?

SMACK!

That line of questioning was so patently ridiculous – the Henley Memos are public records, after all – she finally gave up on her own foolishness.

She then asked him why he even wrote the memos, and he replied (page 124), “When the Chief of Staff warns me about the SEC going after Larry Spring’s former budget director for a civil security fraud that’s when I reached out to an ethics professional and he recommended that I do this when I explained that management doesn’t like sensitive information emailed. He said, ‘You need to start getting it notarized then and you need to get out. You need to get another job.’”

Ya think?

Still desperate to get a rise out of him, Ehrlich asked Terry where he kept the memos.  When he replied that they were on the city server since he emailed them to himself.  He specifically mentioned that the memo dated September 14, 2019 was written and emailed on a Saturday.

In response, good old Brooke amped up the stupid to an even higher level (page 125):

Ehrlich: So these are documents you’re preparing 2 while you’re at work?

Henley: Well, on Saturday I can work and write a memo.

Ehrlich: You were preparing these documents while you were at work but you’re not sending them to anyone employed by the City of North Miami?

Henley: I’m employed by the City of North Miami and I sent it to myself.

SMACK!

Ehrlich then questioned Mr. Henley about the separation package that was offered to him (page 130).  He responded that he was offered “four weeks not to sue the city or say anything.”  He also explained that just because he was offered a package, they never told him he was fired.  Although he countered with an offer of twenty weeks, no decision had been made and, therefore, he was still employed at that point.

Ehrlich: And yet, despite the fact that you made that demand you still, it’s your testimony you didn’t think you were terminated?

Henley: No. I wasn’t. They didn’t tell me I was terminated. I said, “If I were to consider this, I want those things in it,” like the non-disparaging disclosure. Go ahead. I’ll let you continue.

SMACK!

Lawyer Ehrlich then ask if he requested that the city to “somehow hide his disciplinary record.”  When he responded that he did, she asked him, “And as assistant budget director for the City of North Miami, you were aware of public records law, were you not?”  He admitted he was aware of the law.

Ehrlich: Mr. Henley, wouldn’t it be true that to change, or destroy, or alter records in your personnel file would be a violation of public records law?

Henley: I asked for it not to be included in my personnel record. That doesn’t mean I asked for it to be destroyed.

SMACK!

Nevertheless, she persisted:

Ehrlich: Based upon that training and your experience, would it constitute a violation of the City’s policy with regard to public records for the City to change, or alter, or remove documents from your personnel file?

Henley: To remove? If they were ever put in, yes.. I’d like to elaborate.

At that point, she cut him off since he was about to explain that he was requesting they not be included in the first place, but she obviously didn’t want his answer to be on the record.

It was, however, futile.  Anyone can clearly understand that Mr. Henley did not want the bogus disciplinary actions to be a part of his permanent record.

Ehrlich immediately changed the topic to grill him (page 138) about the looming budget deficit that he had already described at length.  No matter the question, Mr. Henley had the answer.  Clearly frustrated, she whined that he didn’t let her finish a question before answering.  Terry’s lawyer, Mr. Amlong, finally said, “Madam Chair, she asked the question. She’s not getting the answer that she wanted.”

SMACK!

Ehrlich then asked Mr. Henley why never told the City Council that he was “being asked to do something improper with regard to the budget” (page 141).

He replied, “You mean, did I ask to get fired?”

SMACK!

Clearly frustrated, Brooke Erhlich tried to blame Terry Henley for the delay in the city’s implementation of several programs, including the transparency portal, OpenGov (page 142) and the workforce management program, ExecuTime (page 144).  She asked him if it was true that “due to his inaction,” neither became operational during his tenure at the city, to which he replied, “No. That’s not true.”

If Brooke Ehrlich had done her homework, she would have known this was the responsibility of the city’s Information Technology Department, not the Budget Department.

She would have also known that that both programs had already been implemented and were completely operational before Terry Henley was fired.

SMACK!

Obviously, whatever amount of money city officials – or rather, North Miami taxpayers – are paying for this crack legal representation, it’s way too much.

The Non-Audit “Audit”

As soon as the news broke that Spring and Sorey were pushing through a fraudulent budget, North Miami residents demanded an outside, independent audit of all of North Miami’s finances. At the September 25, 2018 Council meeting, Councilman Scott Galvin requested that the “City put out an RFP” for “an additional, third party, nonpartisan firm to come in and complete an audit.”

However, as we reported, Larry Spring protested that the internal auditor, Anthony Brunson, P.A., is “a third party, independent, by accounting standards and all other legal matters, independent of the city.”  We also told you that Anthony Brunson, P.A. is contracted with the City of North Miami to the tune of up to $75,000.00 a year, courtesy of North Miami taxpayers, “to provide the city with internal auditing services on an as-needed basis.”

Needless to say, Larry Spring was able to sweet talk the Mayor and Council into dropping the issue, North Miami residents be damned.

In its defense against the allegations of Terry Henley, and in lieu of an actual audit, the city produced a letter from Anthony Brunson, P.A. dated November 29, 2018.

In fact, in this letter Mr. Brunson himself noted that he did not perform an audit.

He wrote:

The information presented is based on discussions with and documents provided by senior management members of the City of North Miami, Florida (City). We have not independently verified the information gathered or contained in this report and, accordingly, our procedures do not constitute an audit, review, or compilation of the information provided. Thus, we do not express a conclusion or provide any other form of assurance on the completeness or accuracy of the information.

Our assistance was directed to those comments and/or financial allegations in connection with the City’s fiscal year end budget for years 2017 and 2018 presented in Henley’s letter that you identified as being of concern to you. In performing our services, we performed inquiries and analysis based upon the information made available to us, and relied on the sufficiency, accuracy, and reliability of the information provided by the City.

Well isn’t that special?

The accounting firm contracted and paid $75,000.00 a year by the City of North Miami performed an “analysis” of Terry Henley’s allegations of fraud, relied solely on “discussions with and documents provided by” City Manager Larry Spring and his trusted Deputy, Duke Sorey, and found they did nothing wrong.

There’s absolutely nothing to see here, folks.  Move along.

After chastising Mr. Henley for not specifically using the terms “sounding the alarm” or “whistle blowing” in his memos and getting nowhere fast, Ms. Ehrlich again abruptly switched topics.

She then asked, “Mr. Henley, are you aware that the City had an independent audit done regarding the claims that you’ve made?

He replied, “It’s not an audit.”

Mr. Amlong then objected on the grounds that this “so-called audit” was performed after Mr. Henley was terminated.

As we already reported, on Day 1 of the hearing “the lawyers for both sides agreed that no evidence relating to after the day Terry was fired would be entered or used for testimony (page 114 of the Day 1 transcript).”

We also wrote, “This verbal agreement would eventually come up and bite the city’s lawyers in the ass, as you will see in Part 2 of this series.”

Knowing full well the can of worms this “so-called audit” will open, Mr. Amlong offered to put it into evidence (page 149).

Ms. Ehrlich immediately changed the subject.

Roosting chickens

She then brought up city exhibit, “binder tab 13,” which was apparently an analysis of Mr. Amlong’s  September 21, 2018 letter, and which publicly exposed the fraudulent budget scandal in the first place.

Again Mr. Amlong objected (page 154) on the grounds that “this report analyzes the letter that she objected to” entering into the record as an exhibit.

At that, point the Chairwoman asked North Miami Assistant Attorney Jennifer Warren to remind her what was agreed upon.  Ms. Warrant responded, “My recollection of an agreement was that I believe both Counsels at one time had speculated that they would agree that they would not — they would limit the scope of everything to everything up to the termination of Terry Henley and nothing after.  But I don’t recall any agreement among Counsel in regards to this audit report which is allegations of City practices while Terry Henley was employed with the City.”

Mr. Amlong interjected (page 155), “Madam Chair, my recollection of it is that they sought to introduce the police report about Mr. Henley’s being escorted out of the building when he came back.  I objected to that. And [Ehrlich] said, “Well, all right we’ll agree — you know, if you’re objecting to anything after him being terminated, that’s okay. And I said, ‘No, I’m not objecting to that. I am objecting to this not being relevant, not having any tendency to prove that something is more likely or less likely to be true.”

Mr. Amlong stipulated, however (page 156), “Now if you want to get into this fine.  If we’re going to get into this, this is an analysis of my Exhibit 4 which is my September 21st letter to Mr. Cazeau.  So we’re now opening a whole new chapter here. And you know, if they want to deal with that, that’s fine.”

Which is the very same thing that the city’s outside counsel wanted to avoid bringing into the record!

OOPS!

Yeah, keep shelling out those tax dollars for outside lawyers, North Miami!

But we digress.

On page 159, Brooke Ehrlich tried again to bring up the non-audit “audit.”

Ehrlich: Okay. And are you aware that an independent auditor did an analysis of that allegation and found that the budgets were balanced and do not reflect deficits?

Henley: That’s not true. I’m aware of the nature of information provided by the audit which I would like to read. It’s one paragraph that will really sum it up.

Ehrlich (ignoring his response as usual): And isn’t it true that the auditor also found that the City’s audited financial statements for these periods do not reflect unexpected budget versus actual expense variances?

Here we go again.

Mr. Amlong, of course, had no choice but to object to her line of questioning.

Amlong:  Objection. We’re getting [into] hearsay that is way beyond the pale here. We’re asking for an expert opinion of an auditor who is not here to be subject to cross-examination, or voir dire, on the bodies of that expert opinion.

Ehhrlich: I’m merely asking whether Mr. Henley is aware that an auditor did an analysis and found that his allegations were unsubstantiated?

Amlong: And it’s not relevant that the auditor did — it’s more prejudicial than probative that an auditor did an evaluation if we don’t know anything about who the auditor is or what kind of an evaluation he did.

Boardmember Hindmarsh: Or if he’s on the pay roll of the City.

BINGO!

As we previously reported, North Miami’s internal auditor, Anthony Brunson, P.A. is contracted with the City of North Miami to the tune of up to $75,000.00 a year, courtesy of North Miami taxpayers, “to provide the City with internal auditing services on an as-needed basis.”

This firm is paid to make the city look good.

Once again, Mr. Amlong told the Chairwoman that this line of questioning is “opening up a whole new chapter.”

And once again, Brooke Ehrlich responded (160), “The chapter has been opened by Mr. Henley during his testimony. It’s his testimony regarding these facts, the City — what he alleges the City did or didn’t do.  I’m merely asking if he’s aware that these allegations were found to be unfounded.”

Oh, we see what you did there, Brooke.

In response, Mr. Amlong shot back, “The chapter would have been opened if my September 21st letter had been admitted.”

You know.  The very same thing that she desperately tried to keep out of the record!

And, yeah.  We’re sensing a pattern here, too.

Phantom witness

Ehrlich one again asked to move the non-audit “audit” into evidence “for purposes of this inquiry.”

And Mr. Amlong once again objected, “It is hearsay from an expert testimony from an expert who has not been qualified as an expert offering opinion testimony whom I am not being allowed to cross-examine.”

Furthermore, Mr. Amlong said, “This hearsay addresses the issue of evidence being offered for the truth of the matter asserted. This is not truth. This is opinion testimony. This is Mr. Brinson’s opinion. If Mr. Brinson is going to express to this panel an opinion about my letter to Mr. Cazeau, then I should be able to cross-examine Mr. Brinson about his credentials and how he reached this opinion.”

For some unfathomable reason – perhaps out of sheer ignorance – the Chairwoman allowed Brooke to continue.  “Now based on your own testimony, you’re aware that the City engaged in an independent auditor to do an analysis of the allegations that you made in that letter?”

Terry responded, “That was a letter.  It wasn’t an audit.” (page166)

Nevertheless, Brooke Ehrlich continued asking stupid questions, and Terry Henley continued to school her in the basic aspects of budgeting, while reminding her once again that “This is not an audit.”

Brooke Ehrlich again brought up the now infamous Costco $1.9 million.  She stated that the auditor reviewed the September 17, 2018 Council minutes and “could not identify or corroborate any statement made by the City Manager concerning Costco revenues.”

Mr. Henley replied, “He’s absolutely false and I’d love to show you the minutes.”

She, of course ignored him.

And for the record, we’d love to see those minutes, too.  But for some reason they’re not posted on the city’s website.

Plugging the budget

Ehrlich continued grilling him about the non-audit “audit” (page 173).

Ehrlich: You also alleged that you were instructed to add five million to two million from Costco pay it forward Sole Mia payments and three million from other phantom Sole Mia buyout payments – that never materialized.  That’s your allegation?

Henley: Correct.

Ehrlich: And in response to that the auditor said that they cannot substantiate what may or may not have been discussed, true? They were not present during your conversation; isn’t that true?

Henley: And their discussions are based on what the City staff told them.

Ya think?

The questions about the non-audit “audit” kept on coming as she continued to ask Mr. Henley to verify what the city-contracted auditor wrote.

And Mr. Henley kept repeating that’s what the report says, but the auditor “provides no documentation or any numbers so I can’t verify his stuff.”

By the time she asked him, “Okay. But this was the auditor’s finding, was it not?” Mr. Henley seemed exasperated by her ridiculous line of questioning (page 179).

He testified, “This person who is not here wrote this. I can agree that what you’re reading is what he wrote. I can’t validate it. And he says he can’t validate it either in his very first page. This information can’t be validated and it can’t be used for anything. I mean, read the first page before you ask me these questions.”

And, once again, she ignored him.

It all came to a head when Brooke Ehrlich attempted to put words in Mr. Henley’s mouth by cherry-picking excerpts from his memos (page 181).

Henley: If you read the rest of my sentence before that, it says, “Henley is not saying anything illegal, just that the contribution from enterprise to the general fund has increased.” But you’re missing the first sentence out of that.

Ehrlich: Mr. Henley, these are your allegations, are they not?

Henley: It’s not my complete allegation.

Ehrlich: Okay. But this is included in your allegations, yes?

Henley: That sentence is part of my allegation. Part of it.

Ehrlich: And the auditor found, or states in response –

Finally, Mr. Amlong also had enough and stated, “Madam Chair, for the rule of completeness if she’s going to try to impeach Mr. Henley’s allegation, I would ask that she read the entire allegation.”

Ehrlich finally wrapped it up by posing a question that was more of a statement (page 185).

Ehrlich: But the auditor found no wrongdoing with this.

Henley: I’d love to ask him.

Except, as Mr. Amlong already noted, the city-contracted auditor, Anthony Brunson, didn’t bother to attend the hearing, so he couldn’t be questioned.

By the time Mr. Amlong finally had his chance for re-direct, the Chairwoman noted that it was already 10:30 p.m.  She asked him how much time he would need (page 187).

Mr. Amlong replied that it would have been 10 minutes until the city’s outside counsel entered the non-audit “audit” into the record.

“Now it’s going to be considerably longer.  I wasn’t expecting this.  This is a very complicated report.  And, going back to my September 21^st letter, I think we could be here for a while.”

Oh, goody!

After endless discussion, the Personnel Board finally agreed to hold the follow-up meeting on Thursday, January 31, 2019.

It was cancelled.

The meeting was then scheduled for Monday, February 11, 2019.

It was cancelled.

We can’t help but wonder if North Miami city officials finally realized that they’re totally screwed and are considering a deal.

In fact, two independent sources have told us that settlement talks are in progress, but we have been unable to verify that information.

However, if this is true, it would be the first smart thing that Larry Spring and Duke Sorey have done since – well, ever.

We can’t wait to see what happens next.

Stephanie