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DAVID KARPEight years of financial records have been subpoenaed from the Tampa Bay Economic Development Corp., which operated as an arm of the city to administer loans.
TAMPA - A federal grand jury that will hear from six city employees today also wants to review financial records about the city's work with a nonprofit lender.
The grand jury has subpoenaed eight years of financial records from the Tampa Bay Economic Development Corp., a nonprofit that operated as an arm of the city to administer loans.
TEDCO helped finance the Tampa Heights revitalization program under former Mayor Dick Greco and oversaw loans through the city's Challenge Fund and the U.S. Small Business Administration.
The subpoena seeks all records that detail TEDCO's financial transactions with the city government from 1995 to the present.
Documents with the subpoena carry the name of FBI agent Scott Cheney, who has been conducting an investigation of former city housing chief Steve LaBrake.
Cheney's name also appeared on subpoenas delivered Aug. 15 to the six city employees expected to appear in U.S. District Court this morning. All six worked under LaBrake.
Federal authorities began investigating LaBrake in 2001 after he and his then-girlfriend, Lynne McCarter, who worked as his aide, began building a luxury house in South Tampa. Two companies that were awarded thousands of dollars in city business under LaBrake helped the couple construct the house.
LaBrake has denied any wrongdoing and has not been charged. He said last week that he has supplied the FBI with documents refuting allegations against him.
The subpoena for records suggests that the two-year investigation into LaBrake may not be over soon.
About four city workers have been running two copy machines for the past week to prepare all the documents, said Ed Johnson, manager of east Tampa development and community lending, who has overseen the copying.
It could take FBI agents weeks just to read the thousands of pages.
"We are obviously providing them with the information that they have requested," said Liana Martino, chairwoman of TEDCO's board of directors. "We are cooperating fully."
Martino said she didn't know why federal prosecutors sought the records.
TEDCO operates as a private nonprofit corporation, but its staff includes city employees paid with tax funds. The city has also guaranteed thousands of dollars worth of TEDCO's loans.
In June 2002, the Tampa City Council approved a $1.07-million bailout for TEDCO when its loans on property in Tampa Heights came due.
This year, Mayor Pam Iorio cut the city's financial ties to TEDCO, saying the nonprofit should operate on its own. Iorio said she supports TEDCO's economic development goals, but doesn't think the city should underwrite them by supplying staff.
None of the six city employees expected to testify before the grand jury today worked for TEDCO. But all six were involved with the city's housing program and worked out of the same office at the German-American Club, where TEDCO operates.
The six employees met last Wednesday with Donald Smith, an attorney hired by the city to explain how the grand jury works. "The city's position was for them to cooperate, and they wanted them to understand that," Smith said.
Smith did not discuss what any of the employees know or might testify about.
At least one of the witnesses had retained her own private lawyer, City Attorney Fred Karl said.
Vernell Savage, manager of the city's community redevelopment agency, said she didn't see any reason to hire her own lawyer. Months ago, an FBI agent interviewed her about the city's housing department. She said the agent asked her general questions about how the office operates.
- David Karp can be reached at 226-3376 or karp@sptimes.com