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IG Report: Many said 'Yes' to ill-fated Digital Domain tax grant

Senate President Don Gaetz has grown fond of saying, about the legislative process, “It takes three ‘Yeses’ to get to ‘Yes’ and only one ‘No’ to get to ‘No’.”

When it comes to the ill-fated $20 million grant to a now-bankrupt Port St. Lucie film studio, several legislative power players said ‘Yes’ to a deal that later cost taxpayers dearly.

The long list of abettors, unveiled in a recently released Chief Inspector General report, includes former Gov. Charlie Crist, former economic development head Dale Brill, current Chief Financial Officer Jeff Atwater, former House Speaker Larry Cretul, former U.S. Representative David Rivera, former Rep. Kevin Ambler and former Lieutenant Gov. Jennifer Carroll.  

In a process that Brill said involved taking great energy to “deliberately and intentionally sidestep the process,” Digital Domain was able to corral enough support from Tallahassee power players to get $20 million in taxpayer grants over the objections of the organization responsible for vetting such awards.

According to the report, Enterprise Florida advised against giving Digital Domain such a large grant in 2009, raising questions about its financial stability.

But there were several other power players who said ‘Yes,’ allowing the company to circumvent the vetting process and gain access to a large pot of taxpayer cash.

Last year, Digital Domain went bust in a high-profile bankruptcy.

Gov. Rick Scott ordered his Chief Inspector General Melinda Miguel to investigate how the deal came together.

According to Miguel’s report, here’s a timeline of how the ill-fated deal came into existence:

June 2008: Digital Domain CEO John Textor called Dale Brill, head of the Office of Tourism, Trade and Economic Development, expressing interest in setting up a digital film studio in Florida. Textor said he would need $100 million in economic incentives from the state to make it happen.

January  22, 2009: Textor submits his business plan to Enterprise Florida, which is responsible for vetting economic incentives deals, and deciding which companies are worthy of receiving taxpayer grants.

April 16, 2009: After Enterprise Florida CEO John Adams called the financials of Digital Domain “extremely weak,” the organization  said it could only recommend a cash grant of $6.1 million.

April 2009: Rep. Kevin Ambler called Brill to his office, to discuss how to get Digital Domain the full $20 million, without the support of Enterprise Florida. Brill obliged.

May 2009: The Legislature put a $20 million appropriation in the budget for the Digital Domain project, circumventing the vetting process.

May 22, 2009: Gov. Crist sent a letter to Senate President Jeff Atwater and House Speaker Larry Cretul, seeking approval of the Digital Domain project (which was included in the budget Crist would later sign). There’s no evidence that Cretul or Atwater objected to the funding. Last year, Atwater said he did not know about the deal until it was too late.

June 2009: The Legislative Budget Commission, chaired by Rep. David Rivera, approved the funding of the project.

June 1, 2009: Brill sent a  memo to Crist, recommending the $20 million funding for the project.

June 24, 2009: Crist approved the award.

Summer 2009: An unnamed legislator on the Economic Development Policy Committee began to criticize the Digital Domain deal, sparking an investigation by then-Rep. Jennifer Carroll.

Nov. 12, 2009: Carroll sent a letter to Crist, saying she had looked into the Digital Domain deal, and found that there was no impropriety.

Ambler, who had pushed for the deal, was later hired by Digital Domain. He claimed “legislative privilege” and declined to discuss details with the inspector general.

The company went bankrupt last fall, and the state is trying to recoup its losses in court.

The IG report found that no laws were broken in the deal, and that a similar award “could happen again today if the Legislature appropriates funds and gives the Executive Branch the discretion to expend those funds.”

Throughout the report, the Inspector General makes it clear that several lawmakers and agency officials were complicit in the decision to award Digital Domain $20 million, with few raising a flag to the questionable deal.

It's a lesson in how power often works in the state Capitol.

Crist could not be reached by investigators, but his chief of staff Eric Eikenberg told them that Textor had been "very aggressive" and had "a presence in Tallahassee."

Brill said he had concerns about the deal but never "threw himself on the sword" because he likely would have lost his job.

Former Senator Ken Pruitt, then vice chair of the Legislative Budget Commission, told the IG's office that he did not think there were any controls that could be put in place to stop this.

Lawmakers are cracking down on economic incentives deals this year, hoping to bring more transparency to the process. Some are criticizing the process altogether, saying that Florida should not continue to send money to corporations who might later go belly-up.

"There needs to be more oversight and accountability of the public's money," said Dan Krassner, executive director of the independent government watchdog group Integrity Florida.  

 Scott used the IG report as an opportunity to take a jab at Charlie Crist's administration.

“This Inspector General report shows two things – first, our current economic project vetting process is in place for a reason, and second, that process was clearly circumvented by the previous administration for the Digital Domain deal," he said in a statement. 

 Meanwhile, Textor came out to defend himself, saying that Enterprise Florida had vetted the program and agreed to provide funding for Digital Domain. 

"The disclosures in the IG report finally allow the public and policy makers to see that the project was fully vetted, and most importantly, approved by Enterprise Florida," he said in a statement.

 

Comments

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No More Rick Scott

The IG found no laws were broken unlike Rick Scott's Columbia HCA whose fraud because the largest Medicaid heist in history.

Conservative

"With the release of the largest proposed budget in Florida history, the transformation from perennial outsider to dyed-in-the-wool politician is all but complete for Gov. Rick Scott. The political class should be proud of the short work this turned out to be."

http://www.bizpacreview.com/2013/02/02/is-governor-rick-scott-a-dead-man-walking-17876

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