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The Water Cooler Title: Money Matters Follow Rubio Marco Rubio took the stage in front of 2,000 cheering supporters in Sarasota earlier this month and delivered a stark warning: Government debt is destroying America. "Government cannot continue to spend more money than it takes in!" exhorted the Republican U.S. Senate candidate. The crowd roared. For 16 months, Rubio has carried this message of fiscal responsibility to great applause across Florida. What Rubio does not tell the crowds is that he has gone deep into debt and struggled to make his payments, with Deutsche Bank initiating foreclosure proceedings on one of his homes in June. Rubio resolved the foreclosure case, but debt has been a constant companion. In 2005, he carried more than $1 million in debt with mortgages on three homes, a home equity line of credit, a car loan and more than $150,000 in student loans. As he tried to meet his obligations, Rubio engaged in a series of financial transactions that led to accusations that he received special treatment because of his political connections, abused campaign cash and engaged in deals where a conflict of interest existed between his political position and financial benefit. Such deals seem to contradict the principles Rubio espouses on the campaign trail: calling for balanced budgets as he strained his own, and criticizing government waste as he arranged unadvertised government jobs for himself. They include: • Arranging the $135,000 home credit line in 2006 from a bank controlled by political supporters who valued his home at 25 percent above the purchase price a month after the sale closed. • Selling another home for a large profit in 2007 at a time when the market was on the way down. The sale was made to the mother of a politically influential chiropractor who was lobbying Rubio over a lucrative state insurance issue. • Securing no-bid employment contracts in 2008 at a public hospital and state university in Miami at a time when both agencies were cutting employees and slashing millions from their budgets • Using his Republican Party credit card to cover expenses such as car repairs, purchases at Apple's online store and movie tickets that appear to be personal in nature. Some call it a tale of two Rubios: a fiscal hawk in public who has struggled privately to keep his finances together. "Marco Rubio spent money like a drunken sailor," said state Senator Mike Fasano, R-New Port Richey, a supporter of Rubio's Senate rival, Gov. Charlie Crist. "This is a person who has gotten in way over his head with his personal finances but he's running for the United States Senate and talks about being personally responsible and fiscally responsible. It's ludicrous." Rubio's supporters say his financial issues show a man at times struggling to support a large family, distracted with political and professional responsibilities and failing to fill out proper paperwork, but not engaging in unethical behavior. "Every time you point a finger at someone, three fingers are pointing at yourself," said Rebeca Sosa, a Miami-Dade County commissioner who blames Crist for exaggerating Rubio's financial issues. "Marco has demonstrated throughout his years and services that he is a responsible fiscal person." Poor but ambitious Rubio now owns one of the largest homes in his small town of West Miami and he has earned as much as $414,000 in a year. But he often points out, on the campaign trail and in TV ads, that he came from humble beginnings. His parents immigrated from Cuba and worked hard at modest-paying jobs to support their four children: Rubio's father was a bartender, his mother a hotel maid and Kmart cashier. Rubio graduated from law school at the University of Miami in 1996 with more than $165,000 in student loan debt. His family grew quickly to include four children. His wife, Jeanette Rubio, is a stay-at-home mother. Friends say he was studious, hardworking and determined to be successful. In law school Rubio was close with a group of fellow Cubans that included Marlene Quintana, now a lawyer in Miami. "He would always say how he admired and respected his parents and the sacrifices and struggles they had gone through to give him opportunities," Quintana said. Cuban parents have high expectations, Quintana said. "It was inbred in us since we were little." Rubio was tagged early on as a rising political star. Former Gov. Jeb Bush called to congratulate Rubio after he won a seat on the West Miami City Commission in 1998 at the age of 26. Other Republican leaders, such as former state party chairman Al Cardenas, supported Rubio's campaigns. Cardenas hired Rubio at his law firm after witnessing his zealous organizing for Bob Dole's presidential campaign in 1996. In 1999, Rubio won a seat in the Legislatur,e and his financial fortunes rose with his political ones. He never made more than $96,000 as a lawyer until 2004, the year after fellow legislators chose him to be speaker of the House for the 2007 and 2008 sessions. The House speaker is one of the three most powerful positions in state government. Soon after he secured the spot, Rubio took a job making $300,000 a year at the politically connected statewide firm of Broad & Cassel. Between 2002 and 2005 the firm did $4.5 million worth of legal work for the state and represented many clients who had business with Florida. Meanwhile, as Rubio's salary soared, he took on more debt. In 2003, he purchased a 1,340-square-foot Spanish Mission-style cottage in West Miami for $175,000. But shortly after securing the speakership position and the Broad & Cassel job he was ready to trade up. In December 2005, Rubio bought a new two-story home with a two-car garage just a few blocks from his old house for $550,000. He kept the old house and rented it out. The new house is hardly a mansion -- four bedrooms, 2,649 square feet -- but it is large for West Miami, where one-story bungalows are the norm and many people park in their front yards because even carports are a luxury. That year, Rubio also went in with another lawmaker on the purchase of a $135,000, 1,228-square-foot home in Tallahassee. The house slipped into foreclosure briefly this year after the two men failed to pay the mortgage for five months. They immediately came up with $9,524 to make the foreclosure filing go away. By the end of 2005, Rubio had three home mortgages, a home equity line of credit, a car loan and more than $150,000 in student loans -- a total debt load of $1,025,444.58, according to the financial disclosure statement he filed with the state. That same year, the Republican Party of Florida gave Rubio a credit card to use at his discretion. Questions about spending In 2007 and 2008, Rubio charged nearly $100,000 on his Republican Party credit card, according to records released by the party. The party has refused to release records from before 2007. The Internal Revenue Service has clear rules that campaign donations, which are not taxed, must go toward election activities. Many donations to political parties come from large corporations like Florida Power & Light and U.S. Sugar that are trying to influence state policy. Rubio's credit card records show he put many questionable expenses on his party credit card, including: $1,000 at Braman Honda in Miami for repairs to his family's minivan; $765 directed toward Apple's online store; $10.50 at an AMC movie theater in Miami; $761.54 at Costco; and $80.60 at Borders, among many other items. Many of his charges appeared to be for everyday items like food. Rubio insists that he kept an accounting of his personal expenditures and paid American Express directly so that campaign funds were not used. He argues that other charges were not personal. The minivan was damaged at a political event, he said, so the party agreed to pay for repairs. Through his spokesman, Alex Burgos, Rubio declined to be interviewed for this article. But Burgos wrote in an e-mail to the Herald-Tribune, "There were instances when personal charges were made by error, for which he made direct payments to American Express at the time the statements would come in." Rubio also admitted that he double-billed the Republican Party and the state of Florida for airplane tickets. He repaid the party $2,400 for the tickets after media reports. Citing confidential sources, the St. Petersburg Times/Miami Herald newspapers reported this year that Rubio's credit card spending is under investigation by the FBI and IRS. Rubio, however, said that he is not under investigation by either federal agency -- and he boldly predicted that he never would be. "It's just not true," Rubio told a Herald-Tribune reporter following a well-received speech at the 2010 Victory Dinner at Walt Disney World. "I have never been contacted by anyone. I'm not going to because it's not true." Rubio's supporters say any issues with how he spent campaign donations were minor clerical mistakes. "My sense is he was in the middle of this political effort and didn't cross the t's and dot the i's as he should have," said Cardenas, the former state party chair. "He should have been more careful, but I don't think it goes to his character. He just didn't spend adequate time making sure paperwork was done properly." Rubio's critics are not convinced. "Instead of going out and earning a living like every other Floridian, he's living off campaign contributions," Fasano said. What is clear is that Rubio never seemed to have enough cash. In December 2005, Rubio closed on a new home for $550,000. By January 2006 the house had been appraised at $735,000 and he landed a $135,000 home equity line of credit from a bank controlled by his political supporters, according to Miami-Dade County records. The home is now assessed at $392,000 for tax purposes. Burgos said the deal was not unusual for the time period. "Marco and his wife signed a contract on a pre-construction home in December 2004," Burgos wrote in an e-mail. "By the time they closed in December 2005, the home had appreciated in value significantly. This was due to thousands of dollars in additions he made to the original construction and due to the fact that this was the middle of the housing boom." Power and money Another questionable deal arose in May 2007, when Rubio sold his first home -- the one he purchased in 2003 for $175,000 and had been renting -- to Nora Cereceda. At the time of the sale, Cereceda's son -- chiropractor Mark Cereceda, who runs a chain of clinics -- was aggressively lobbying Rubio over a state insurance issue. Nora Cereceda paid $380,000 cash for the house, a $205,000 profit for Rubio at a time when the market had begun to drop. A man who answered the door at the house recently said Nora Cereceda was not home. She did not return a message left at the house. Dr. Cereceda lives on the same street. He told news organizations at the time that his mother wanted to live close to him. The sale price was comparable to other sales at the time, but the home value has since dropped nearly in half, to $215,403, according to the county property appraiser's website. Shortly after Dr. Cereceda's mother purchased the home, Rubio removed the House's block on the insurance provision and voted for it himself. Governor Crist and the Senate had already come out in favor of the bill and Rubio was the main holdout. The legislation extended the state mandate that drivers purchase $10,000 worth of personal injury insurance. Many of Dr. Cereceda's customers are injured drivers who pay with insurance. More questions Questions about whether Rubio's political position helped him financially came up again in 2008, when a term-limited Rubio was leaving the Legislature and planning his next move. Florida International University announced Rubio had been hired to teach political science classes and do research part time for $69,000 a year. The job was never publicly advertised. That year, the university cut 23 degree programs and 200 jobs. Another 200 jobs were cut the next year. Thomas Breslin, chairman of the faculty Senate at Florida International University, said some faculty members complained about Rubio's being hired at a time of deep budget cuts. "The Rubio hiring for many was salt in the wound," Breslin said last week, recalling the Senate's discussions at the time. Rubio had been a good friend to the university. He helped secure $15 million for a hurricane center, $11 million for a medical school, $2.5 million for a student academic support center and millions more in other budget requests for FIU while he was speaker of the House. Burgos points out that Rubio raised much of his salary from private donors. After joining the FIU faculty, Rubio subsequently paid his boss, Dario Moreno, the professor who helped get him hired, $12,000 to conduct polling for his U.S. Senate campaign. Moreno stopped working for Rubio when the payment was reported in the media. Around the same time, Rubio landed a $8,000-a-month consulting contract with Jackson Memorial Hospital, Miami's large public hospital, just months after he helped secure an extra $20 million state budget allocation for the hospital during his speakership. "FIU or a plumbing company or a electrical company -- whatever he will do he's going to be criticized, but how can he make his life?" asked Sosa. "He's trying to work for heaven's sake." Sosa spoke this week from her office at Miami's downtown government center. Later that evening, she attended the county commission's first budget hearing of the year. Big cuts are on the table and hundreds of county workers showed up to protest. Employees at Jackson Memorial, which receives county tax dollars, wore purple shirts with the slogan "Save Jackson." Omayra Hernandez, a mental health nurse with 25 years of experience, said Rubio's nearly $100,000 contract is "definitely concerning" at a time when "we're losing staff and seeing more patients, more suicides, more depression, more everything because times are hard and people can't cope." Hernandez added, "We need to be spending our money more wisely."
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