CARLOS HARRISON Herald Staff Writer

The federal investigation of alleged corruption in Hialeah was one of the worst-kept secrets in Dade history. And, in the opinion of the investigators, Raul Martinez had practically begged to be its target.

"He thrust himself, he thrust himself, into the attention of the U.S. attorney's office," said former Assistant U.S. Attorney Roberto Martinez. "It was as if he were saying, 'Investigate me.' So we said, 'OK.' "

It began with a Miami Herald series entitled Hialeah: Zoned for Profit in late January and early February 1985, detailing an apparently monumental level of political profiteering in Hialeah, without any suggestion that Martinez was involved.

The stories prompted a federal investigation. At first it focused on council members who allegedly traded votes for cash. The key suspect: Councilman Sebastian Dorrego.

"It was during the Dorrego investigation that we started realizing the incestuous nature of things out there, with the mayor at the hub of the relationships," said Mark Schnapp, who at the time was chief of the public corruption unit in the U.S. attorney's office.

It took five years to put it all together.

"It was like grabbing air, there was just so much of it," Schnapp said.

The investigation was slowed by its own snowballing proportions, hampered by language barriers and once, completely derailed by a devastating leak of critical wiretap information.

And there was plain bad luck.

One potential witness committed suicide, hanging himself the morning he was to meet with the FBI, for reasons that remain unclear. Another, drawn into an undercover role after unwittingly playing a central role in the first attempt to crack the corruption, died of a heart attack.

One witness fought to convince investigators that he was the victim of attempted extortion at City Hall. His problem was he was telling them in the wrong language.

Julio Navarro, a Hialeah businessman, told the FBI that Dorrego was demanding $15,000 for his vote on a zoning change. Navarro even got agents to tape a telephone call with Dorrego's middleman.

But the intercepted conversation was in Spanish. The tape gathered dust.

Then prosecutor Bob Martinez (no relation to the mayor) was
put on the case. The only Cuban-born member of the U.S. attorney's corruption unit at the time, Martinez listened to the Navarro recording and discussed it with Schnapp.

The case was incredibly weak, they agreed. The recorded conversation skirted the purpose of the payoff. It involved an intermediary, not Dorrego himself.

They decided to go ahead.

A grand jury began gathering evidence in the spring of 1985. Simultaneously, the prosecutors and the FBI decided to run an undercover operation in Hialeah: An FBI agent would pose as a businessman looking for a zoning change -- and willing to pay cash to get it.

They got unexpected help from a loudmouthed Surfside inspector named Kevin "Waxy" Gordon, who liked to tell people he could make things happen.

Gordon was unwittingly helping the FBI infiltrate suspected labor racketeering at the Port of Miami by guiding an undercover informant into the docks. The feds decided to use Gordon in Hialeah.

It wasn't hard. On Aug. 21, Gordon met "Gino" -- the FBI "businessman." Gino said he wanted to do business in Hialeah and asked Gordon how much it would cost to take care of zoning problems.

"I can't say offhand," Gordon answered. "(Mayor) Martinez never prints a menu."

The feds had wiretaps on Gordon's phones, approved by then- U.S. District Judge Alcee Hastings.

The whole thing blew up on Sept. 9, just as Gordon was warming up. FBI agents taped a Gordon phone call that led them to suspect Hastings had leaked information about the Hialeah investigation.

Hastings would later be cleared in U.S. Senate impeachment hearings of disclosing the information -- but in 1985, it didn't matter: Fearing for the lives of the agents and the informant, the feds shut down the sting.

The investigators went back to building a case on reconstructed evidence rather than with an active sting operation.

By then, Schnapp was busy with another case. So was Bob Martinez. They did nothing with the Hialeah case for the next six months.

But someone else did.

In November 1985, a disgruntled former associate of the mayor telephoned Tommy Nevins, a brash and burly cop in the Hialeah Police Department's tiny intelligence unit. Julio Castano, former executive assistant to the mayor, had stories to tell.

Castano implicated the mayor in possible wrongdoing with then-Councilman Silvio Cardoso and with developers Renan Delgado and Santiago Alvarez.

In February 1986, Nevins convinced Castano to tell the FBI.

"I've got a guy who can blow Hialeah wide open," Nevins told a friend in the FBI.

A meeting was set for the morning of Feb. 26.

It never happened. At 8:30 a.m., Nevins got a call on his car phone: Castano had hanged himself in his bedroom closet after an argument with his wife.

Nevins went back to work on an unrelated case.

In March 1986, Schnapp finished his other case and reopened the grand jury investigation of Councilman Sebastian Dorrego.

The FBI arrested Dorrego on Sept. 12, 1986. Nevins, who by then had left the police department, had a source and information on Dorrego he wanted to share. He helped the prosecutors gather information for the impending trial and tried to point them toward the mayor.

But the prosecutors were concerned with Dorrego, not the mayor -- until Martinez suddenly demanded their attention.

The mayor made himself custodian of the city's records, personally receiving the federal subpoenas and inspecting documents before handing them over. He publicly demanded to know if he was the target of an investigation. He admitted to the prosecutors that he had debriefed at least one witness who had testified before the Dorrego grand jury, trying to learn what the prosecutors were looking into. And he attacked the investigation in the press.

"It bordered on the bizarre," Schnapp said. "Rather than going to the press, you'd think a mayor of a town would say, 'This is horrible. How can I help?' "

Prosecutor Martinez: "Instead, he took us on. He came head on."

The mayor and the prosecutors met publicly at Dorrego's trial.

Julio Navarro, the victim of the 1984 attempted extortion, testified that the mayor once tried to buy his land at a steep discount. When he refused to sell, Navarro said, the mayor vetoed a zoning change Navarro sought -- and Dorrego demanded the $15,000 payoff to override the veto.

Martinez took the stand on Feb. 25, 1987. He sparred bitterly with Schnapp for 3 1/2 hours, then accused the prosecutors of "trying to indict me politically."

Dorrego was convicted. And the mayor was on center stage.

Then the case stalled again. Prosecutor Martinez went into private practice. Schnapp was promoted. The three FBI agents on the Hialeah case transferred to other cities.

Peter Outerbridge, a new federal prosecutor, was put in charge of the Hialeah case in the spring of 1987. Special Agent Brian Jerome came in from the FBI.

They had a lot to learn, but they were committed to the case.

Outerbridge, recognized for his ability to analyze information from records, began building a paper trail.

By the end of the summer of 1987, they had pieced together what appeared to be possible crimes involving the mayor in two real estate projects belonging to former Councilman Silvio Cardoso, the apparent intimidation of a Hialeah contractor who opposed a rezoning, and possible bid-rigging and extortion on a hotly contested U.S. Housing and Urban Development project.

In October 1988, two prominent witnesses lined up against the mayor: Cardoso the councilman and Alberto San Pedro, convicted a year before on unlawful-compensation and drug- conspiracy charges. Both faced charges of illegally obtaining FBI files. They struck a deal: leniency in exchange for their information against the mayor.

But Martinez had to wait. Outerbridge was deep in a complicated sidelight to the Hialeah case, which ended in the indictment of three Trust Bank officials in December 1988.

In April, Outerbridge got promoted. Assistant U.S. attorneys Steve Chaykin and Bruce Udolf took the Hialeah case.

Under rules imposed by U.S. Attorney Dexter Lehtinen, who threatens to fire any of his assistants who talk to reporters without authorization, Chaykin and Udolf cannot comment on the case. But observers credit them for making the elusive indictment a reality.

Under their supervision, witnesses went before the grand jury twice a week. More than 125 subpoenas, for documents and personal appearances before the grand jury, were issued. The list of apparent conspirators grew. The instances of alleged extortion started looking solid for the first time. San Pedro was giving new meaning to an old and ominous promise to Mayor Martinez that had been picked up on recordings in the drug- conspiracy case years before:

"He doesn't know that if I have a turn I can put his a-- in jail," San Pedro had said.

A decision had been made to use one of the most potent statutes in the federal arsenal against Martinez: the Racketeering Influenced Corrupt Organization charge. It allowed the prosecutors to build their case with alleged crimes from a decade before. It made Martinez liable for 20 years on each count, and subjected his property and assets to seizure, if he was convicted.

But Chaykin and Udolf went further. As the reach of the alleged corruption became apparent, the prosecutors made a critical decision to broaden the indictment -- and the list of co-conspirators. They reasoned that, added together, the individual instances of alleged corruption indicated that Hialeah's government was being used as an illegal enterprise.

They had, in effect, gone full circle. Tuesday's indictment depicted a network of apparent corruption -- with the mayor at the center.