Miami mayor pushed for no-bid city contract benefiting his private employer’s partner

Miami Mayor Francis Suarez and his top aides spent months last year advocating for a no-bid city contract for a little-known software company that was simultaneously negotiating a partnership with a firm paying the mayor a $20,000-a-month salary.

The mayor’s advocacy on behalf of the software company, NZero — and the behind-closed-doors discussions involving its partnership with Suarez’s private employer, Redivider — were laid out in dozens of emails obtained by the Miami Herald.

The emails, dated December 2022 through April 2023, raise new questions about conflicts of interest involving Suarez, whose outside work for a local developer is already the subject of a federal investigation. They provide the clearest example yet of how Suarez has used his public office to benefit his private employers.

NZero tracks carbon emissions for companies and governments seeking to become more environmentally friendly. In late 2022, the company asked Suarez to help pitch its product to his city, according to a statement from the company. That was around the same time NZero said it entered into talks about a possible partnership with Redivider, a much smaller, less-established company seeking investors to build data centers.

At the time, Redivider’s CEO — Suarez’s boss — called the partnership with NZero a “key milestone” for his company. And Suarez, who was also a minority owner of Redivider, stood to personally benefit from any increase in the tiny fund’s overall value.

NZero’s pitch at City Hall had one potentially fatal flaw: The company was selling a service that was already provided by a city employee at no additional cost to taxpayers. Undeterred, emails show the mayor’s office pushed the city to purchase NZero’s largely-redundant services anyway.

“We had a great meeting with NZero the other day and would love to move forward with them,” wrote the mayor’s then-chief of staff, Nikolas Pascual, as he forwarded NZero’s pitch materials to the Office of Resilience and Sustainability, which oversees the city’s ongoing efforts to track and reduce its carbon footprint.

The forwarded thread from early March 2023, included a message mentioning the company’s planned partnership with Redivider. In the email, an executive with NZero referred to the partnership plan and push for a city contract as “parallel” initiatives and thanked both the mayor and his chief of staff for their help on both fronts.

Despite receiving the pressure from the mayor’s office, the resilience department ultimately rejected NZero’s proposal — but not before the company finalized its partnership with Suarez’s employer.

The circumstances surrounding the deal added to concerns from critics that Suarez, who has become a multimillionaire since taking office in late 2017, has been using his mayoral post for personal profit.

Anthony Alfieri, founding director of the Center for Ethics and Public Service at the University of Miami School of Law, said Suarez should have “recused himself and prohibited his staff from participating in the NZero negotiation with the city of Miami.”

The mayor’s refusal to separate his private interests from the activities of his public office, Alfieri said, is part of a pattern of behavior that “tarnishes public perception of his integrity and corrodes public trust in his administration.”

Suarez declined an invitation from the Herald to discuss the emails and his private business with Redivider. When approached by a reporter at City Hall last Thursday, he refused to answer questions, and a staffer asked for the questions in writing. The mayor did not respond to those written questions.

In addition to the federal investigation, the mayor’s outside work is the focus of an ongoing joint investigation between the Miami-Dade State Attorney’s Office and county ethics commission. The probe initially focused on a $10,000 per-month contract Suarez had with a developer seeking assistance from the mayor’s office. It recently broadened to include the mayor’s other business relationships, including Redivider, which was mentioned by investigators seeking more information from the city.

In a statement, a spokesperson for NZero acknowledged that the partnership talks with the mayor’s private employer coincided with the effort to sell his city on their product. But, the statement continued, the company “never paid or promised anything to Mayor Suarez nor Redivider for any introductions or for anything else, nor has Mayor Suarez ever been paid by NZero.”

The spokesperson said NZero’s interest in pitching Miami came from the city’s commitment to sustainability, which Suarez recently codified by signing an agreement to make the city carbon neutral by 2050.

Redivider CEO Tom Frazier told the Herald his “interactions with the city of Miami and the mayor’s office adhere to all legal and ethical standards.” Frazier said he had little knowledge of NZero’s interactions with the mayor’s office outside of the “information necessary for the preparation and dissemination of our press release.”

The partnership between Redivider and NZero was announced on April 26, 2023, in joint press release from the two companies. The announcement included a quote from Suarez, saying the partnership — in which NZero agreed to monitor emissions for Redivider’s planned data centers — would “set a new standard in carbon tracking transparency that will further Redivider’s ambitious Energy-As-Impact agenda.”

City emails suggest the mayor’s quote was actually written by the companies’ public relations representatives who, emails show, coordinated their plans for the announcement with the mayor’s then-communications director, Soledad Cedro. It is the second example of Suarez taking a pre-written statement from an an outside company and adopting it as his own.

Redivider’s CEO also offered Cedro general talking points and a list of “frequently asked questions,” noting “no doubt your office will get questions about the mayor’s quote.”

Redivider had just $1.4 million and six investors in late 2021 when the company brought Suarez on as a highly-paid advisor, the company’s only Securities and Exchange Commission filing shows. His work for Redivider was first reported by the Herald, but his earnings were not known until Suarez filed federal financial disclosures required as part of his short-lived presidential bid last year.

Suarez, who receives $130,000 in annual compensation for serving as Miami’s part-time mayor, had previously refused to identify the private firms that hired him on the side for consulting services, making it impossible to determine if his public duties and private interests overlapped. His federal filing showed that there were more than a dozen such companies, together paying him millions a year.

Suarez’s compensation package from Redivider included stock options and a small equity stake in the company, which has been pitching investors on its plans to build crypto-currency mining operations and data centers around the country in opportunity zones — distressed areas where investment is incentivized by the government.

The partnership between NZero and Redivider is still in place but dormant, according to the software company.

Redivider has yet to build any of its planned data centers.

Seeking a city contract

Even with the mayor as its champion, NZero’s pitch to the city was always a longshot.

By late 2022, when Suarez made NZero’s introductions at City Hall, the city was already successfully tracking emissions and was well on its way to completing an initial report on the subject.

The only obvious distinction between NZero’s proposal and the city’s in-house efforts was that the startup boasted “near real-time data” tracking, while the city produces an annual measurement.

Further complicating things for NZero, Miami’s carbon counting program is specifically tailored to meet the requests of the nonprofit organization C40 Cities, Miami’s partner in the initiative. The city had already paid a consultant to instruct staff on best practices for counting emissions year after year.

Undeterred, the mayor’s office worked with NZero to optimize its offer to the skeptical department head.

Together, the mayor’s staff and NZero executives toyed with the possibility of piggybacking one of the company’s existing contracts with another government to sidestep the city’s competitive bidding process. Records show NZero’s already-established contracts with the state of Nevada and city of Reno were worth around $5 million and $30,000, respectively.

Suarez’s aides set up a meeting with the city’s grant writers after NZero executives suggested they apply for an EPA grant worth up to $1 million, which the company’s website touted as a way to cover the cost of its services. And the mayor’s office also supported outreach efforts to Florida Power & Light, the source of the data NZero needed to build the proposed emissions dashboard.

It is not unusual for companies to pitch the city on their products and services, although the city usually prefers to handle most things in-house. What was unusual about NZero’s proposal was the involvement of the mayor’s office.

Although Suarez has said he considers cutting carbon emissions a moral imperative, the mayor had shown little interest in the technical nitty-gritty of the effort until he started pushing NZero’s product.

Throughout the process, emails show the mayor and his top aides pitched NZero’s services directly to the city’s resilience department, appearing to bypass the city manager, who runs the government’s day-to-day operations.

After months of meetings brokered by the mayor’s staffers, Miami’s resilience officials told NZero the city’s current tracking software was sufficient and they had no intention of moving forward with the company.

The final rejection came last summer, according to the company’s statement.

Officials in the resilience department were so uninterested in further discussion, the company said, that they even rejected NZero’s offer to make a small pilot dashboard so the city could test the product for free.