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Buchanan under fire

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Story Transcript

VOICEOVER: Florida Congressman Verne Buchanan won his seat two years ago by running as a savvy businessman. But now his business practices are under attack.

CARLO BELL, FMR FINANCE DIRECTOR, VENICE NISSAN DODGE: I don’t understand how this guy isn’t in jail.

VOICEOVER: And charges of corruption leveled by former employees are threatening to blow up Buchanan’s campaign and turn Florida’s 13th Congressional District from red to blue this November.

REP. VERN BUCHANAN (R-FL-13): That’s a complete smear campaign.

VOICEOVER: Vern Buchanan built a fortune selling cars. With a stake in more than a dozen dealerships, Buchanan amassed assets estimated at more than $100 million. His ability to generate money made him a top fundraiser for Florida’s political elite, like former governor Jeb Bush and current Senator Mel Martinez. Buchanan chaired the Florida Chamber of Commerce and was the co-chair of the Republican national finance committee. This combination of money and connections made Buchanan a natural choice to run for the House in South Florida’s 13th Congressional District. The 13th is a high-profile seat. It once belonged to Katherine Harris of Bush-Gore-Florida-recount fame. Harris had given up the 13th to pursue her unsuccessful run for the Senate, and Vern Buchanan stepped into the void with help from some heavy hitters. President Bush, Vice President Cheney, and Mitt Romney all appeared in his behalf. Fittingly, the vote tally for Katherine Harris’s former seat was hotly contested.

NEWS REPORTER (VOICEOVER): Eighteen thousand ballots cast on touch-screen voting machines failed to record a vote.

VOICEOVER: After a disputed recount, Buchanan was declared the winner by 369 votes. Buchanan spent $5.5 million of his own money in pursuit of his seat. It was the most expensive House race of the 2006 cycle. Now, just as Buchanan is heading into the home stretch of his 2008 reelection run, allegations of corruption are bubbling up in the local press, threatening to engulf his campaign. This summer, several former dealership employees, most of them Republicans, have filed lawsuits against Buchanan, accusing him of everything from cooking the books to importing undocumented immigrants to work on his beach-front mansion. Carlo Bell was finance director of Buchanan’s Venice Nissan Dodge dealership in 2005. Bell says that he and other employees were pressured to write personal checks to Buchanan’s campaign, checks they would be reimbursed for with cash. In his lawsuit, Bell recalls a meeting headed by senior executive Don Caldwell.

BELL: He told us that he was going to reimburse us, pay us cash, in other words. We would write a check for $1,000, and he would pay us $1,000 in cash. And I asked Don, and I said, "You know, Don, this doesn’t feel right. Is this legal?" And he just said—basically, what he said was, "Look, are you a team player or not?" And, you know, I took that as a threat. I took it as, you know, either I was going to have to do this or I was probably going to be looking for a job. So eventually I said, you know, "Yeah, Don, I guess I’m a team player," you know? I didn’t have any choice. So he handed me $1,000 in cash.

INTERVIEWER: He personally did?

BELL: Oh, yeah. He had a big wad of cash in his hand. Yeah. And he passed out cash to four or five guys that I know of, and they all wrote checks for $1,000.

VOICEOVER: Don Caldwell vigorously denies Bell’s account, saying he never reimbursed employees for donations to Buchanan’s campaign. But Bell says everyone in that meeting wrote checks and got cash. Bell stands by his account and predicts his former colleagues will be subpoenaed and have to testify under oath.

BELL: And then the next thing they’re going to do is they’re going to have to provide their bank statements. And if they find out that they did in fact deposit cash at the same time they wrote the check, then they will suffer the consequences for lying under oath.

VOICEOVER: The infusion of personal checks came at a crucial time in the primary campaign. Buchanan was behind in the polls and eager to prove to party leaders that he could generate popular support. Records show between September 23 and 30, 2005, Buchanan’s campaign received $110,000 from his businesses’ employees and their families. At Sarasota Ford, then Buchanan’s main base of operations, employees say they also felt the pressure to donate to the boss’s campaign. Joe Kezer, formerly financial director of the dealership, was the first to blow the whistle on Buchanan in what has become a string of lawsuits. He says Buchanan personally pressured him for a $2,000 donation while at work.

INTERVIEWER: Can you describe that?

JOE KEZER, FMR FINANCE DIRECTOR, SARASOTA FORD: Yeah. He just came up to me, put his arm around me, said, you know, "We’re in a crunch for qualifying"—and, again, I don’t know all the terminologies, but they had to raise X amount of money, I think, to show the party that he had the earning ability, you know, and the backing, and also he had to have X amount of dollars by a certain date."

VOICEOVER: Unlike Bell, Kezer was not repaid, but in exchange for the money, Kezer says Buchanan did have a treat to offer: a week’s stay for free at his personal, multi-million-dollar Colorado chalet.

KEZER: Yeah. In exchange for the money, he offered me to stay at his place in Colorado.

VOICEOVER: Like Carlo Bell, Kezer says he donated the money because he didn’t want to be fired. Eventually, though, Kezer did get fired, he says, for refusing to go along with illegal business practices. He got a job at another dealership, but then, on the same day that the press reported that Kezer had filed a lawsuit against Buchanan, he got fired again. Kezer agreed to talk with us, but he asked us to meet him at a hotel, rather than at his home. Like Kezer, many of Buchanan’s other former employees fear retribution for speaking out about his practices.

FORMER EMPLOYEE: [inaudible] with the witness [inaudible] whistleblower protection thing going on. And if I ain’t [inaudible] here by my own, they’ll cream me. You know, Vern’s going to come after people, I guarantee you.

VOICEOVER: One former employee also preparing to serve Buchanan would only speak with disguised features. Buchanan and his people claim the payments were just a kind of sales bonus, known in the colorful language of car sales as a spiff. But our inside source says spiffs are paid to salesmen on the floor, not managers like Carlo Bell and Joe Kezer.

FORMER EMPLOYEE: You know. And then they’re trying to say, "No, it was a spiff." Well, there are no spiffs given out in the car business to managers in cash. If it’s a bonus, you throw it on their check at the end of the month when you do your saddle-up bonus checks. You don’t hand managers cash. You give spiffs to salesmen, that’s it.

VOICEOVER: So far, seven lawsuits have been filed in Florida, and at least four more pending. They charge Representative Buchanan with fraud in his business and political dealings. All the whistleblowers who filed suit have consulted with this man, consumer advocate Duane Overholt, a former car salesman who’s made it his life’s work to expose auto fraud. He claims fraud was systematic at Buchanan’s dealerships.

DUANE OVERHOLT, CONSUMER ADVOCATE: We know that they are producing fake documents a number of ways at the Buchanan dealerships. They had computer systems in house; they had a outside entity that was producing fake tax returns; they were producing SSI letters, social security letters, fake bankruptcy discharge letters. Okay? All these are federal crimes.

SCOTT RUSS, FMR FINANCE DIRECTOR, SUNCOAST FORD: Forging the cred-apps, power bookings, tax returns, falsified tax returns, taking people’s cars in on trades and not paying them off. I mean, they did deceptive advertising. I don’t know how illegal that is, but—.

VOICEOVER: Scott Russ is another former finance director turned whistleblower who has consulted with Overholt and filed suit. Russ says that during his two years at Suncoast Ford, he was frequently threatened for refusing to cheat customers. Citing fear for his job and his family’s safety, he asked that we meet him at an undisclosed location along the interstate. Russ says the message throughout the dealership was clear: get the sale, no matter what it takes. Those who couldn’t afford to buy a car could always be set up with hefty bank loans at subprime rates. Russ claims that salesmen routinely used TurboTax to create fake IRS documents.

RUSS: They’re making their own W2’s. They hooked up with an accountant to make tax returns, ’cause with subprimes they look for proof of income. Well, they got a hold of somebody to make whatever proof of income that was needed to get the deal funded.

VOICEOVER: Although rare in the industry overall, one common swindle reported at dealerships owned by Buchanan is known as power booking. That’s when a dealer lies to the bank, falsely reporting that cars are loaded with luxury options when they aren’t. The bank ends up approving loans for more money than the car is worth. The difference goes to the dealer, and the buyer doesn’t even know it’s happening. Customer Eve Abaza says a Buchanan dealership, Sarasota Ford, did it to her.

EVE ABAZA, SARASOTA FORD CUSTOMER: I just bought just regular old Mustang. It was a V6, it’s a convertible, and it was red. It has power seats, power locks, and that kind of stuff. But by the time the bank got it with my falsification, it was a GT Shelby, it was a V8, it was loaded, it had a serious radio, and a six-changer CD.

INTERVIEWER: But it doesn’t have any of those things.

ABAZA: It doesn’t have any of those things, and I’m being charged for it.

VOICEOVER: Eve said she ended up paying $25,000 for a car that should have cost about $15,000. The lawsuits piling up against Representative Buchanan claim he knew thousands of customers like Eve Abaza were being cheated on a routine basis.

OVERHOLT: It’s very clear by the documents themselves that illegal acts took place against the consumers, tax issues, against the State of Florida, okay? But it also shows that these same issues surely reflected the employees were also ripped off, that the only one that really benefited and benefited the most was the corporation, and the corporation was run by Buchanan.

BUCHANAN: I’m Vern Buchanan. I approve this message because [inaudible].

VOICEOVER: After featuring his auto sales experience in his first run for Congress—

BUCHANAN: I’m a businessman, not a professional politician.

VOICEOVER: —this year, Buchanan is intent on creating distance between himself and his troubled dealerships.

INTERVIEWER: If any of the allegations about fraud in the dealerships prove to be correct, what will you do to correct them?

BUCHANAN: Well, again, I don’t work in the dealerships. We have a corporate group that deals with that.

BELL: The last couple of years since he’s been in Congress, no, he probably hasn’t had any dealing with any of his stores. That much I believe. I’ll give him the benefit of the doubt on that. But before he was in Congress, he was involved day-to-day in his stores. His office was at Sarasota Ford. He was there every day. To say that he’s hands-off and he doesn’t have any knowledge of the day-to-day goings-on in the store is just not plausible. It doesn’t make any sense. Somebody that owns 51 percent of a multi-million-dollar business knows what’s going on in their store day to day.

RUSS: You know, it’s amazing, watching TV and seeing some of the things that I’ve seen on TV, where he’s been asked in certain situations, "Do you know what’s going on in your businesses? Do you know this is happening?" And, you know, he shrugs his shoulders and he shrugs himself to it. "I have no idea what’s going on. That’s why I have people in place." If he doesn’t know what’s going on, what is he doing with his businesses? He’s not a proper businessman. He should be knowing. I mean, that’s his responsibility.

INTERVIEW: Is it plausible that he wouldn’t know what’s going on?

RUSS: There’s no way.

VOICEOVER: Buchanan’s troubles may just be beginning. The latest accusation against Buchanan may be the most explosive. Richard Thomas, a former director of fixed operations at Sarasota Ford, filed a lawsuit on August 7, alleging that Buchanan imported illegal immigrants to work on his $8-million home on Longboat Key. Other employees claim that the immigrants slept at the dealership and that Buchanan’s brother used a Sarasota Ford van to transport the workers to and from Buchanan’s home. Richard Thomas said he fears retribution, and he declined to appear on camera. But after a public forum, ANP asked Buchanan about Thomas’s charges.

INTERVIEWER: Would you categorically deny that you or your brother or your businesses have ever hired illegal or undocumented immigrants?

BUCHANAN: Not that I know of. I don’t do that. Thank you.

INTERVIEWER: [inaudible] construction of your house?

BUCHANAN: No. I mean, it’s nonsense.

VOICEOVER: Buchanan has taken a hard line against undocumented immigrants in his brief career on Capitol Hill, cosponsoring a bill to make English the official language of the United States. When asked to respond to a detailed list of questions, Buchanan spokesperson Sally Tibbetts replied with a one-sentence email: "These are absurd, politically motivated statements," she wrote, "being made by former disgruntled workers." ANP asked the congressman how he planned to respond to the allegations if they turned out to be true.

INTERVIEWER: Would you take any position on how they should be remedied if the fraud charges prove to be valid?

BUCHANAN: Well, first off, that’s going to be way after the election. But the operating partners do that; I don’t do that.

VOICEOVER: In case you didn’t catch that:

BUCHANAN: Well, first off, that’s going to be way after the election.

VOICEOVER: This time around, Vern Buchanan seems to feel safer saying he’s not a businessman but, rather, a politician.

TEXT ON SCREEN: The Florida Democratic Party has called on the FBI to investigate the "very serious allegations of fraud and violations of election laws" by Rep. Buchanan.

Executive Producer: David Murdock

Producer/Editor/Camera: Harry Hanbury

Producer/Interviewer: Danielle Ivory

Music: Joel Langley

Special Thanks: Ed Freeman

Research support was provided by the Investigative Fund at The Nation Institute.

DISCLAIMER:

Please note that TRNN transcripts are typed from a recording of the program; The Real News Network cannot guarantee their complete accuracy.