J.T. Burnette testifies in trial, says DoubleTree deal was confidential
TALLAHASSEE, Fla. (WCTV) - Businessman J.T. Burnette took the stand Tuesday during his trial on federal corruption charges in connection with development deals in Tallahassee.
Burnette is accused of paying Maddox a $100,000 bribe to abstain from a vote and kill a downtown hotel project which would have competed against Burnette’s hotel.
He’s also accused of arranging $40,000 in bribes from a company called “Southern Pines Development” to Maddox. That was a front company for the FBI as agents investigated possible corruption in Tallahassee.
Burnette faces nine charges, including racketeering, extortion, honest services fraud, and making false statements. His trial began July 12.
Burnette began his testimony by discussing his background. He is originally from Monticello, Florida.
“My family was a tad bit spotted,” he said.
Burnette said his mother developed a drug addiction, and he went to live with his grandparents. He said his grandfather was a truck driver. Burnette’s cousin, Melissa Oglesby from KaiserKane, was the government’s first witness. Burnette said the two were raised as brother and sister.
Burnette testified that he began his first business when he was 17 and still in high school, weatherizing houses in Jefferson County.
“With what was going on in my life, I kind of became a workaholic,” he said.
Burnette said when a storm hit Panama City, he went to the area with his roofing license.
He said he thought after that, he’d retire and go back to school. He said he did a couple of years at Tallahassee Community College but realized “business is my thing.”
Burnette testified that only about 10% of his business is in Tallahassee. He called most of what he’s done in Tallahassee his “passion projects.”
“I would make money outside of Tallahassee and then invest those dollars in Tallahassee.”
One government witness testified that Burnette had about 15 companies.
When asked why he had so many companies, on the stand Burnette said “I’m a starter, not a finisher.” He added that he believes he’s skilled at putting together good teams, and mediating between people with different “superpowers.”
Burnette testified that in his career, he’s bought and renovated six or seven hotels, but has never built a new one. He said he had a different approach in Tallahassee than an outside developer might, speaking to the local government about what’s needed in the area.
Burnette testified that he first met Scott Maddox before 2008; at that time, Maddox was not in office.
The two worked together with a group trying to build a second fueling station at the private part of Tallahassee’s airport to bring down prices. Burnette said they were up against “old Tallahassee, industrial revolution type stuff.”
When one other man involved with Eagle Aircraft threatened not to pay Maddox for his work after the deal passed the City Commission 3-2, Burnette said he saw Maddox’s vindictive side.
He testified that he paid Maddox instead to avoid the conflict.
He also said he hired the Maddox Horne law firm in 2015 for assistance with a building issue in Clearwater, Florida.
When asked about his relationship with Maddox, he said “a lot of times in business, you keep your friends close, and your could-be enemies closer.”
Burnette testified that when Maddox ran for office in 2012, he was asked to be on the campaign finance committee.
During an August 28, 2012, meeting, Maddox asked Burnette if Pro Bank, where he was a shareholder, could give Carter-Smith an $800,000 loan.
Burnette said Carter-Smith’s finances were “a train wreck,” and agreed to loan her $500,000.
During that conversation, Burnette testified that Maddox also told him Carter-Smith still had certain clients he could help her with, because he had told the city attorney he had a conflict. Burnette said that list included McKibbon.
“So I knew Scott was out as early as 2012,” he said.
Burnette then testified about selling Hotel Duval, preparing to sue McKibbon, and working to purchase the Doubletree.
In 2008, Burnett and his partner, Chad Kittrell at Hunter and Harp, tried to purchase the plot of land on the corner of Tennessee and Monroe streets, where McKibbon was set to build the Aloft.
Burnette said they believed a Hyatt Place would be a better fit for that corner, but McKibbon did not sell. They also moved the Aloft back from the corner, further south on Monroe Street.
The defense showed an exhibit of the old Governance webpage, which included a blurb about the Floridan Hotel. As of that time in 2008, Burnett knew of Maddox’s involvement with MHG.
Burnette testified that he tried to buy the Doubletree in July 2013, when he still owned Hotel Duval. He said Charles Simon was not interested.
The defense walked through a purchase and sale agreement for Hotel Duval, Burnette testifying that it’s “very sensitive in the hotel business with a transition of power.”
Burnette pointed out that it’s often difficult to get the ball rolling, and confidentiality is important because false starts can destroy your reputation.
Around that time, McKibbon was preparing to build a Hampton Inn on the corner. Burnette says as an owner of Hotel Duval, on August 6, they received a notice of their new neighbors.
Burnette testified that he was “ticked” about the proposed McKibbon project, sitting caddy-corner to the Gateway Building.
He said McKibbon was trying to build less than what they had promised, as an outside developer, when he had to build four times what he wanted. Burnette said he had hoped to build a one-story Walgreens where the Gateway Building now stands, but the city pushed him to build a four-story building with underground parking, promising a garage would be built next door.
Burnette testified that they received the notice because McKibbon was trying to change the zoning of the plot of land, and he learned he had legal grounds to sue.
“Win lose or draw,” Burnette said, “you got checkmate for three years.”
Burnette said he and Kittrell approached the Doubletree owners again, pointing out that the Hampton Inn would be direct competition to the Doubletree.
He testified that the Hampton Inn was not in competition with Hotel Duval, comparing the situation to Ford versus Chevy. In that metaphor, he said the Hampton Inn would be like another “Ford dealership” down the road from the Doubletree “Ford dealership.”
Burnette said he was concerned about filing the PUD lawsuit, because he explained it would be against the city of Tallahassee, burning up the political capital he believed he had built with Imagine Tallahassee.
He and his partner went back-and-forth with Charles Simon on the Doubletree purchase as they bumped up against the legal deadline to file a suit.
Ultimately, on September 19, 2013, Burnette filed a petition to sue the city.
“This was the heart-wrenching piece,” Burnette said. “They were forcing us to do something and not forcing our neighbor to do the same thing.”
Court recessed just after noon and resumed at 1:20 p.m. with Burnette still on the stand.
Tuesday afternoon, JT Burnette discussed an October 2013 meeting with Paige Carter-Smith. He testified that he learned from her that former Governance employee Reggie Cardozo was now working at the GSA at the White House.
Burnette called the GSA the “holy grail for an 8(A) company.” His cousin, Melissa Oglesby, ran KaiserKane, an 8(A) company.
He believed it would be very important for KaiserKane to connect with Cardozo, because their main contact at the Bureau of Prisons was retiring.
“We knew we had a coming hole in the workload,” Burnette explained.
The defense then jumped back to the McKibbon issue and lawsuit. Burnette said Commissioner Nancy Miller was angry about the suit, but that Mayor Marks was on their side.
In October of 2013, Burnette closed on the Hotel Duval sale, and in November of 2013, they agreed to drop the lawsuit, allowing them to have conversations with commissioners.
He said they “transitioned to political instead of legal.”
Around this time, Burnette also negotiated a contract between KaiserKane and Governance. He said originally Paige Carter-Smith wanted $5,000 a month, but instead Burnette agreed to pay a $10,000 for 3 months, rather than a full yearlong contract.
“Let’s take 90 days to see whether the relationship you have is really beneficial to KaiserKane,” he explained.
In January 8th, an email from Paige Carter-Smith to Burnette had a proposed contract; Burnette modified it within an hour of receiving it.
Between December 2013 and February 2014, Burnette described extensive negotiations to purchase the DoubleTree. He said by December 30th he was “at his wits end,” but they signed a Purchase Sales Agreement on January 6th, with a built in due diligence time period.
“Did you ever tell Paige Carter-Smith or Scott Maddox prior to this date that you were interested in buying the DoubleTree?” Tim Jansen asked.
“Absolutely not,” Burnette replied.
“Did this contract have a confidentiality clause?” He asked.
“I’m sure it did,” Burnette replied.
Burnette testified that he that Maddox and Carter-Smith called him, asking about McKibbon, saying it would cost him $100,000.
Burnette said he suggested reworking and renewing Governance’s lobbying contract with KaiserKane instead.
When KaiserKane received an invoice for $100,000 on March 12th, 2014, Melissa Whitaker e-mailed Melissa Oglesby, asking whether to pay it. She said no, and that she would talk to Burnette.
She and Burnette had a 42 minute phone call on March 31st. Burnette testified he had told her he had agreed to extend the contract, but the original contract did not run out until April.
“I was negotiating on the best interest of KaiserKane,” Burnette said.
April 10th was the last day of the original KaiserKane and Governance contract; Burnette said the $100,000 paid on April 14th was an extension.
Burnette also testified about loans from KaiserKane, which Melissa Olgesby also discussed two weeks ago on the stand as a government witness.
He said on March 31st, 2014, he asked Oglesby for a “one day bridge loan” for $2.2 million.
“I mean, we were family,” he said.
He used the money to purchase the DoubleTree, and it went back into KaiserKane’s account in less than 24 hours.
The defense wrapped up questioning of Burnette on the McKibbon allegations around 4:15; they then discussed the FBI agents until about 5 before adjourning for the day.
Burnette confirmed “Mike Miller” had introduced himself at the 2016 Chamber Conference.
Burnette described him as “cagey,” but said, “Anything I can do to help bring capital to Tallahassee, I am on your team.”
The two exchanged numbers; Burnette added, “I don’t carry business cards at all because I don’t even know what my title is.”
He said at his first meeting with Miller at the DoubleTree, he recommended Will Butler.
“I was under the impression that he [Mike Miller] didn’t know how to value properties in Tallahassee and Leon County,” Burnette said.
He will be back on the stand at 9:00 a.m. Wednesday.
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eOn January 8th, Burnette received an email from Paige Carter-Smith with a proposed contract for Gov
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