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Palm Coast Saturday, Jun. 20, 2020 5 months ago

Former and current Palm Coast employees say they've been interviewed by the FBI about Mayor Milissa Holland

The relationship between the city and Coastal Cloud continues to fuel opposition, including from one of Holland's campaign opponents.
by: Brian McMillan Executive Editor

Although Mayor Milissa Holland and City Manager Matt Morton say they are not aware of any FBI investigation into matters at City Hall, several employees told the Palm Coast Observer that they have been interviewed by investigators about Holland's relationship between the city and her private employer, Coastal Cloud.

The first public acknowledgment of the FBI's investigation came during a press conference on June 20, by Michael Schottey, a former city employee who is one of four candidates running against Holland for mayor in the August primary. He shared emails that he says show Holland is using her public office for personal gain, which is against the law.

In the emails dating to 2017 and 2018, Holland reminds city officials in Orlando that she is mayor of Palm Coast, and then she offers services provided by Coastal Cloud. She uses her city email for some; most are conducted using her Coastal Cloud email.

Holland declined to comment about the emails. (The city responded to Schottey's press conference in a June 22 letter here.)

“We are clearly in the midst of a political season, and it seems we have a desperate candidate that would rather draw the attention from their campaign in an effort to defame their opponent,” she said in a phone interview with the Palm Coast Observer.


FBI investigation

Because of his perception of Holland’s actions, Schottey said, he resigned from his previous position as communications officer for the city of Palm Coast. After he resigned, the FBI met with him for two hours.

Schottey also said that City Manager Matt Morton confirmed to him that the FBI is investigating Holland.

“It’s over,” Morton said one day, according to Schottey. “They got her.”

“When I asked what he was referring to,” Schottey said during his press conference, “he said the FBI was on the mayor’s trail, and he said he was worried she was going to prison, and he was worried he was going down with her.”

However, in a phone call after the press conference, Morton said he didn’t remember such a conversation.

“I don’t remember this feeling of, ‘We’re going to jail!’” Morton said. He added: “I have never been interviewed by any law enforcement agency, never been contacted by FDLE, FBI, Sheriff’s Department, ever, and I’m not personally aware of anyone who has. … That rumor has been floating around for months. No one has ever been contacted from the city. I have no knowledge of any of that stuff. … Those are just ugly rumors.”

Holland said she has not been contacted by the FBI or other agencies, either. And, she said, “I am told that no one at City Hall had been interviewed by the FBI.”

However, several others — current and former employees — have echoed Schottey’s statement and told the Palm Coast Observer that they, too were interviewed by the FBI about matters at City Hall, specifically the city's relationship with Coastal Cloud. They declined to reveal their names for fear of retribution. Some were also interviewed by the Florida Department of Law Enforcement and the Ethics Commission.


'Hurts credibility of local government'

When contacted by the Palm Coast Observer on June 20, former City Manager Jim Landon said that he had been interviewed by the FBI about a year ago, as well. He was terminated in September 2018.

Coastal Cloud's software development was offered to the city for free, a $300,000 investment. He reiterated that he had always supported the city's relationship with Coastal Cloud — until it became clear that the city would be required to pay for Salesforce licenses to participate in the arrangement.

"As soon as you have a proposed cost to a local government of over $100,000, it is highly unusual not to request proposals, request bids, have some kind of public competitive process," he said. "It may not be illegal, but it is definitely not best practice. And it definitely hurts credibility of local government." He said he felt Holland had acted unethically in the process.

However, Holland and Coastal Cloud co-founder Tim Hale have challenged Landon's view of the agreement. Coastal Cloud had not kept it a secret that Salesforce licenses would be required; in fact, the company had emailed Landon about it, and he had responded and hadn't voiced any opposition.

He didn't voice his opposition in a public workshop in August 2018, either, when Hale made it clear that for the city to participate, the city would have to buy Salesforce licenses to build what would eventually become known as Palm Coast Connect. Moreover, the City Council voted 4-0 (Holland was absent) to approve that agreement, and then voted 4-0 (Holland recused herself) to approve buying the Salesforce licenses in November 2018.

In a previous interview with the Palm Coast Observer, Hale said he was frustrated with the critics of Coastal Cloud. While Landon said the partnership hurts credibility, Hale sees the opposite: Palm Coast Connect provides data and a new level of accountability to City Hall, and not everyone is willing to accept more accountability.

"This is changing the game of how the city could work, and it would be a shame if this puts ice on that," he said.


'Failed the trust'

In his press conference, Schottey said urged cooperation with investigations from outside agencies.

“I am begging current employees of the city of Palm Coast to do the right thing,” Schottey said.

He continued: “I am here to call on Milissa Holland to resign. I believe she has failed the trust this city put in her when we elected her. If she will not resign, I am calling on the council members of Palm Coast to stand up as four votes against her one and censure her for her conduct.”

Brian McMillan has been editor of the Palm Coast Observer since it began in 2010. He was named the Journalist of the Year for weekly newspapers in North America by the Local Media Association in 2012. He lives in Palm Coast with his wife and five children. Email...

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