Florida's candidates for governor have launched a war of words this week over who had a role in shady business practices that led to fraud charges at the former companies of Democrat Alex Sink and Republican Rick Scott. Can both draw blood? Here's the story.
Here are the ads:
Here's how Scott justifies the ad:
ANNC: Here’s what Alex Sink promised
SINK: As FL CFO I’ll continue using my business experience to cut wasteful spending.http://www.youtube.com/watch?v=jfpFr96Qr4M&feature=related
ANNC: But she billed the taxpayers for over four hundred thousand dollars of private plane use…44 times diverting the plane to her home…
Backup: “This week a St. Petersburg Times/ Miami Herald investigation revealed that Chief Financial Officer Alex Sink, the Democratic favorite for governor, has taken hundreds of flights on state planes -- more than $400,000 worth -- over her two and a half years in office. They include side trips to Tampa, near her home, sometimes to pick up or drop off family.” (Editorial: “Florida’s Frequent Fliers” Orlando Sentinel, 06/07/09)
“Sink, along with Attorney General Bill McCollum and Lt. Gov. Jeff Kottkamp, spent $51,000 of taxpayer money from July 1, 2008, through Feb. 15, 2009, commuting to their homes or taking ''unnecessary legs during business trips,'' according to the Department of Management Services' March 3 audit. Sink spent the most -- $27,200 -- while McCollum spent $12,600 and Kottkamp spent $9,900, according to auditors…The Herald/Times reported last week that Sink has diverted the state plane to her hometown of Tampa at least 44 times and McCollum has diverted the plane to the Sanford airport -- the airport closest to his Longwood home -- 53 times, to bring him home in between business trips...” (Klas, Mary Ellen “Audit: Top Florida Officials Spent $51K On Plane Commutes” Miami Herald, 06/30/09)
“Flights for the governor's office cost $61,000 in the first four months of this year. The office of the Chief Financial Officer's bill has been nearly $61,000 and the attorney general's office bill is nearly $49,000. That totals about $170,000 of the total cost of $216,000 for the flight charges during that period… But those charges also include staff employed by Crist and the cabinet officials. If you look at the flights of just the individuals during this fiscal year, McCollum leads with more than $77,000 in personal travel on the state plane, followed by Bronson at nearly $52,000, Sink with nearly $45,000 and Crist at almost $23,000. Lt. Gov. Jeff Kottkamp, a potential attorney general candidate himself who has caught heat for his travel expenses, racked up nearly $33,000 in state plane costs.” (Dunkelberger, Lloyd “The Planes Aren’t Buzzing, But They Do Produce Buzz” Sarasota Herald Times, 05/31/09)
ANNC: Sink promised to…
SINK: crack down on financial fraud.
ANNC: But she lost Billions of Florida’s pension fund.
Backup: “In the last 13 months, the state pension plan lost more than a quarter of its value, or $37.9-billion. It peaked at $138.4-billion on Sept. 30, 2007, and was worth $100.5-billion on Oct. 31.” (Freedburg, Sydney & Humburg, Connie, “Pension Fund Plummets,” St. Petersburg Times, 11/17/08)
“Sink said Lehman Brothers and JPMorgan Chase might have offloaded tainted securities on Florida and other states to keep them off their balance sheets. In March 2008, she called a news conference to unveil 10 proposed reforms of the SBA. No. 1: determine if Florida has a lawsuit against Wall Street. ‘The people of Florida deserve to know if there was wrongdoing with the sale of these investments to the LGIP,’ she said. ‘If so, we must hold those companies that sold the investments accountable.’ Echoing Sink, Crist said: ‘I think it reeks.’ The governor said Florida may have been ‘taken advantage of’ and singled out four firms - Lehman, JPMorgan, Credit Suisse and an affiliate of Kohlberg Kravis Roberts & Co. - that might have ‘dumped’ investments on the state. ‘Who knows,’ he said, ‘there could have been fraud involved in that.’ At a meeting of the SBA trustees in April 2008, McCollum promised his office's assistance in an investigation. "I think there were judgments and controls that weren't appropriate, and we could have done better around the margins,’ he said. ‘But the idea that there was some action on the part of SBA to go out and buy something extraordinarily risky didn't seem to be revealed.’ In May 2008, the SBA announced it had a legal case against Wall Street for peddling unregistered securities and a lawsuit could be ‘imminent.’ Instead, the agency extended the deadline for going to court. In July 2008, the SEC ordered a full-scale fraud investigation, not only of the three banks that sold the tainted securities but also of Florida's SBA. SEC investigators came to Tallahassee that October to take testimony from four SBA managers.” (Freedberg, Sydney P “Risk Won; Taxpayers Lost” St. Petersburg Times, 09/19/10)
SINK: And reform state contracts.
ANNC: But she gave $770,000 in no bid contracts to her former employer.
Backup: “Without declaring a potential conflict, Sink has had a stake in matters benefiting her former employer and other companies that she owned stock in before she placed her assets in a blind trust. Because of the trust, it can't be learned how much of a financial interest, if any, she had in the firms at the time of her decisions. That's the point, Sink says: She didn't know what interests she had, so she had no conflict to declare. Sink voted with the governor and other Cabinet members to allow negotiated, or no-bid, bond deals for a financial underwriting team that includes her former employer, Bank of America. One transaction resulted in $770,000 in fees for a subsidiary of the bank and its newly acquired Merrill Lynch unit.” (Freedberg, Sydney P. & Smith, Adam, “With Blind Trust, We Can’t See,” St. Petersburg Times, 8/2/09)
ANNC: Alex Sink says one thing…does another.
Here's how Sink justifies the ad:
Here's how Scott justifies the ad:
ANNC: Alex Sink on TV
SINK: “a lot of questions about Rick Scott…the company he ran was fined…”
ANNC: Hold it. Alex Sink’s own company was fined $6.75 Million by the US attorney…and fined for “deceptive sales practices”“In addition to the class action suit, an investigation by the U.S. Attorney’s Office in Tampa led Bank of America Corp. last month to agree to return an additional $11.5 million to investors and pay a civil fine of $6.75 million to the U.S. Attorney’s Office.” (Ostrowski, Jeff “NationsBank Fund Investors To Recoup Losses,” Palm Beach Post, 01/05/01)
“NationsBank Corp.’s securities subsidiary will pay $850,000 to settle a 3-year-old state investigation into deceptive sales practices in Florida that were first exposed in the Tampa Bay area.” (Keefe, Robert “NationsSecurities Fined Over Sales” St. Petersburg Times, 05/21/97)
“The SEC's Levitt said Monday it was his agency's first case against a national bank and its securities division for "the deceptive and misleading sale of securities on the bank's premises" to some 13,000 investors, most of them elderly. At $ 10 a share, NationsBank took in $ 304.3 million from sales of the two government bond funds, called term trusts. Increases in interest rates in 1994 caused a sharp decline in the value of the shares. ‘We will not tolerate deceptive practices that prey on investors,’ Levitt told a news conference. ‘Americans must be confident that our markets are open and fair.’” (Gordon, Marcy “NationsBank Blurred Line Between Bankers And Brokers, Regulators Say” Associated Press, 05/04/98)
“NationsBank’s securities arm is paying $6.75 million to settle allegations that it misled investors - many of them elderly customers who traditionally kept their money in federally insured accounts - about the risks of investing in two of its mutual funds.” (Moore, Pamela, “Case Costs Bank $6.75 Million,” Charlotte Observer, 5/5/98)
Sink’s bank was forced to pay back $30 million for fraud charges“Years after settling fraud charges with the former NationsBank for $ 30-million, the plaintiffs have yet to be paid.” (Harrington, Jeff “Wait Drags On For Settlement Check” St. Petersburg Times, 06/15/00)
“More than 7,000 NationsBank customers who were misled into risky investments finally will be reimbursed - more than three years after the megabank settled a class action lawsuit over questionable sales practices… The suit, brought in U.S. District Court in Tampa, was settled in 1997 for about $29 million. Attorneys will receive $3 million, Alpert said… In addition to the class action suit, an investigation by the U.S. Attorney's Office in Tampa led Bank of America Corp. last month to agree to return an additional $11.5 million to investors and pay a civil fine of $6.75 million to the U.S. Attorney's Office.” (Ostrowski, Jeff “NationsBank Fund Investors To Recoup Losses,” Palm Beach Post, 01/05/01)
SINK: “I ran my company with honesty and integrity”
Really? Sink’s bank preyed on investors…many of them elderly…with risky investments“The SEC's Levitt said Monday it was his agency's first case against a national bank and its securities division for "the deceptive and misleading sale of securities on the bank's premises" to some 13,000 investors, most of them elderly. At $ 10 a share, NationsBank took in $ 304.3 million from sales of the two government bond funds, called term trusts. Increases in interest rates in 1994 caused a sharp decline in the value of the shares. ‘We will not tolerate deceptive practices that prey on investors,’ Levitt told a news conference. ‘Americans must be confident that our markets are open and fair.’” (Gordon, Marcy “NationsBank Blurred Line Between Bankers And Brokers, Regulators Say” Associated Press, 05/04/98)
All while Alex Sink took home 8 million dollars.“According to news reports, Sink earned $2.6 million in 1999, $3.4 million in 2000 and $2.8 million in 2001. That equals $8.8 million over three years. While that amount squares with the ad, it's worth noting two caveats.” (Jacobson, Louis “Sink Did Help Complete Merger” St. Petersburg Times, 02/24/10)
Here's how Sink justifies the ad: