Statute of limitations bars action against questionable votes

Marion County Hospital District Offices located at 2547 E Silver Springs Blvd, Ocala, FL 34470

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Posted July 21, 2023 | Jennifer Hunt Murty

A five-year statute of limitations will bar any action against Rich Bianculli, a trustee of the Marion County Hospital District (MCHD), related to two questionable votes in 2014 and 2017 concerning a contract the board gave an investment advisor, Berman Capital.

Following a report by the “Gazette” last month about an apparent conflict of interest between the district’s longtime trustee and Berman Capital, which was entrusted with a third of the district’s investment, the Marion County Board of County Commissioners (MCBOCC) asked the county’s attorney, Guy Minter, to look into the situation.

The commissioners are responsible for appointing and removing trustees from the district’s board.

Minter informed the commissioners by email that he had reached out to the Florida Ethics Commission, which informed him that the dates of the votes meant they were barred by a five-year statute of limitations and the ethics commission had no jurisdiction to take action in the matter.

MCHD investments, totaling $275,661,698 during the last reporting period, are broken up equally among the investment companies of Cresset Berman, Graystone, and Truist.

MCHD started investing approximately $213 million in 2014 when the county, with approval from Marion County voters, decided to lease the county hospital, Munroe Regional Medical Center, to a private healthcare company. The hospital lease has changed hands a few times since then and is now held by AdventHealth.

The money from the lease came to the MCHD trustees to be used to meet the health needs of Marion County residents.

The three investment companies are overseen by an investment consultant, Park Place, which advises the trustee board. Cresset Berman, formerly known as Berman Capital Advisors, and Truist, formerly known as SunTrust, have continually invested money for the MCHD since the hospital was leased. Graystone replaced another investment company, Simon Quick, formerly known as Massey Quick, in 2022.

Berman’s entry into an arrangement holding roughly $88 million of MCHD investments raises some transparency concerns. When the lease money was received, Bianculli, chair of the investment committee, suggested that the board allocate the investments among three companies: Goldman Sachs, Massey Quick, and SunTrust.

It’s not mentioned in the 2014 district meeting minutes, however, that Massey Quick’s contract with MCHD includes an extra party, Berman Capital. Under the investment agreement with MCHD, Berman Capital and Massey are independent and serve as “co-advisors” to MCHD.

Following the initial report, the attorney for the district, Joseph Hanratty, has pointed out that Massey Quick’s request for proposal, or RFP, noted co-advisory agreements with Berman in response to its RFP. However, Massey’s response to the district’s RFP did not use any of Berman’s assets to qualify for the district’s contract and Berman wasn’t the only company Massey disclosed having “co-advisory” arrangements with, yet those companies aren’t named in the district’s 2014 contract.

According to a report by in November of 2011, Berman contracted with the more established Massey to handle all of the “due diligence” for Berman’s investments as it did not have the in-house capacity to do so.

At the time the district entered into the 2014 agreement, Berman was only three years old, and considered a “boutique” investment firm serving wealthy individual investors. It had no institutional clients. Yet, under the district’s contract, Berman’s investment advice was weighted above Massey’s.

The contract seems to be silent about how the two companies split fees paid by the district for services.

The 2014 district investment contract acknowledges that Berman Capital connected MCHD with Massey Quick. However, contracts for investment management companies did not require a middleman since companies were solicited through requests for proposals issued from the district.

Most government entities use RFPs in their procurement process to create an even playing field for vendors and encourage competitive bidding. Ideally, this process makes business transactions with the government more transparent and competitive.

Under the contract, Berman’s investment advice seemed to be weighted superior to Massey. The contract reads that Berman was “exclusively responsible for: (I) assisting the Client [MCHD] in determining the initial and ongoing suitability of MQ’s recommendations for the Client’s investment portfolios and/or strategies.”

New documents obtained through archives of the Marion County Clerk’s office indicate that at least 40 investment companies responded to the district’s RFP in 2014, but Berman did not.

The district’s office could not produce many records from this 2014 RFP, citing statutes do not require them to keep the records for that length of time.

During the July 2014 meetings, Bianculli, as the investment chair, failed to disclose to the trustees that he was on the advisory board of Berman Capital. But according to archived internet records from the company’s website before and after he made the motion to approve the contracts, he is listed as an advisory board member of Berman Capital.

Disclosures filed by Berman as late as 2021 reflected MCHD being the only institutional client in the firm’s portfolio.

Following the “Gazette’s” initial report, Commissioner Craig Curry asked county staff during a July 10 meeting whether or not the county’s procurement office could assist the district with RFPs in the future.

The clerk of the court, Greg Harrell, advised against being involved in the district’s business other than appointing trustees. He mentioned nothing of their ability to remove them.

Commissioner Michelle Stone told the “Gazette” that the district’s CEO, Curt Bromund, told her he was preparing a list of inaccuracies about our first report.

Bromund, upon request by the “Gazette,” deferred to the district’s legal counsel. Neither Bromund nor the district’s attorney have provided any list of “inconsistencies” for correction since requested on July 12.

Despite repeated attempts by phone, text and email, Bianculli has not responded to requests for comment.

As previously reported, in 2017, Berman would get its own one-third of the available investment funds. The decision to give Berman a third of the investment funds was made by the trustees without sending out a request for proposals to other investment firms.

In documents obtained since our initial report, by 2017, Massey continues its services to Berman, and Berman identifies them as a co-advisor in their mandatory financial disclosures. This time, however, Berman’s 2017 contract with the district does not name Massey.

Bianculli was the district’s investment chair when the 2014 and 2017 decisions were made. However, in the 2017 vote, Bianculli recused himself from the vote to approve Berman’s contract. Minutes of hospital board meetings and at least one witness in attendance indicate there was no conversation about why he recused himself.

A conflict-of-interest form filed by Bianculli and obtained by the “Gazette” indicates that the reason for the recusal was that his son was an intern at the Berman investment firm and that Bianculli himself had investments at the firm.

The conflict-of-interest form, however, is not attached to the Aug. 28, 2017, meeting minutes, according to the MCHD website. There also is no indication in the meeting minutes that the conflict was stated on the record.

Bianculli became the chair of the MCHD at the next meeting and has remained the chair for almost six years.

According to Bianculli’s son Maximilian Bianculli’s LinkedIn page, within days of Berman receiving the $80 million MCHD investment contract in 2017, while still an undergrad student, he transitioned from being an intern to having a paid part-time position with Berman, where he worked until he graduated from college in 2019, when he went full-time. Currently, his LinkedIn page says he works as an Investment Reporting Analyst for Berman.

As chairman of MCHD since 2017, Bianculli has continued to make decisions related to Berman, and no other conflict-of-interest form has ever been filed.

Neither Justin Berman, principal for Cresset Berman, nor Maximilian Bianculli, have responded to inquiries by the “Gazette.”

While Rich Bianculli has served as chair, term limits for trustees have been renegotiated. Historically, MCHD trustees only served two four-year terms. Now, they can serve unlimited terms if appointed by the commissioners.

The commissioners have never taken action to remove a trustee, although they have authority to do so.

It should be noted that Bianculli’s net worth according to early financial disclosures was valued at $16 million and he is a significant campaign and PAC contributor in local elections, including supporting some of the county commissioners.

Under the bylaws of the MCHD, conflicts of interest must be disclosed to the board and the board has a duty to investigate those conflicts of interest. Hanratty maintained that Bianculli has not violated Fla. Stat. 112.3143 as it relates to voting conflicts, but he declined to explain his conclusion.

There was no explanation provided for why Bianculli failed to disclose that he was a “business associate” with Berman when he made the motion to approve a contract with Massey Quick and Berman in 2014; nor to disclose the nature of his Berman conflict to the other trustees in 2017 or since then when making decisions related to their relationship with Berman.

Hanratty wrote the “Gazette” prior to the first report that “no public official is under any obligation to answer your inquiries.”

The board is subject to the state’s open government, or Sunshine Laws, which means their meetings are publicly noticed, although members of the public rarely attend the meetings. The records are public, and trustees are not to discuss district business outside of a regularly noticed meeting.

Currently, the trustees are Bianculli, who has served as a trustee continually since the lease inception and served as the chair of the board since 2017, Ken Marino, Ram Vasudevan, David Cope, and added within the past two years, Teresa Stephens, Rusty Branson and Harvey Vandeven.

The district board is set to vote on its chair at the July 31 regularly scheduled meeting. Bianculli has not attended the last two meetings.


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