Sink: Across the board cuts no longer work, we need money

Fresh after the Cabinet put a happy spin on the fact that the state's $139 million lost investment in Lehman Brothers is only a fraction -- .06 percent -- of the state's $24 billion portfolio, Chief Financial Officer Alex Sink said the turbulent economy is going to require some -- dramatic pause -- new revenue and fresh thinking by the governor and Cabinet.

"There's going to have to be budget cuts and we probably have to look at other sources of revenue depending on what our priorities are,'' Sink said. "Right after the election, the Legislature needs to get right back in here and forget the across the board cuts. Those ideas no longer work. They need to talk to the people of Florida and figure out what our priorities are."

Inspector general concludes state regulators weren't protecting Floridians seeking mortgages

In a scathing report on the state's oversight of the mortgage industry, chief inspector general Melinda Miguel of the Office of Financial Regulation told the governor and Cabinet today that "the laws, rules and processes were not sufficient to protect the people of the State of Florida.''

Few escaped blame in the report, which implies that not only state laws as enacted by the legislature were lax but the overseers -- from the Cabinet officials on down -- also failed to protect the public. The report was ordered by the Cabinet after a Miami Herald investigation into mortage brokers found lax oversight had granted mortgage licenses to bank robbers and other felons. The Cabinet had no discussion.

After the meeting, CFO Alex Sink and Gov. Charlie Crist both said they didn't think the former OFR chief Don Saxon, who resigned a month ago, had been vindicated.

"There's a lot of work to be done over there,'' Sink said. "Our first order of business is the advocate on behalf of Florida citizens and that wasn't being done at the Office of Financial Regulation, the report uncovered that...That's got to stop.''

She had no patience for a claim from the agency that they didn't have the resources. "If you don't have resources, you stand up at the podium over there and beat your head or your fist and you tell your bosses that you don't have enough resources and if you don't get those resources this is what will happen. Instead of, where I read in a report, that he was quoted as saying, 'Well, we worked behind the scenes.'''

State says it will reject State Farm's 47 percent rate hike

Florida Insurance Commissioner Kevin McCarty just announced that his office will reject the massive rate hike sought by State Farm. The company requested an average increase of 47 percent that would have meant rate hikes of as much as 63 percent or $8,300 in Dade County.

Deputy Commissioner Belinda Miller said that after the Aug. 12 public hearing and the subsequent review of State Farm's request, they determined the company couldn't justify the increase. State Farm now has 21 days to appeal. Download news_release_florida_office_of_insurance_regulation_issues_notice_of_intent_to_disapprove_proposed_rate_hike_for_state_farm_florida.htm 

Ash Williams resumes head of state pension fund

After a decade on Wall Street, Ash Williams will return to work in Florida government as head of the State Board of Administration. He will be replacing Robert Milligan, the state's former comptroller who took the job on as interim director last December, after then-director Coleman Stipanovich resigned in the wake of a run by municipal governments n the local government investment pool.

Gov.  Charlie Crist and the Cabinet unanimously approved Williams' appointment. He last headed the SBA in 1996 and was lured away to Wall Street where he managed investment funds for corporate clients. Back in Florida, he will manage the $166 billion Florida Retirement System accounts and make an annual salary of $325,000.

Cabinet to get more data on mortgage fraud, postpones Saxon's fate

A divided Florida Cabinet postponed any decision over the fate of the state’s top mortgage regulator Tuesday and decided to investigate The Miami Herald’s findings further before they move ahead with any sanctions.

The Cabinet ordered Don Saxon, commissioner of the Office of Financial Regulation, to report back in two weeks with proposed rules to tighten the regulation of mortgage brokers and loan originators and ordered the inspector general's office to coordinate with a plan to further investigate the problems exposed by The Miami Herald series.

Saxon told Gov. Charlie Crist and the Cabinet that he believes The Miami Herald series exaggerated the flaws of his office when it reported that the state granted mortgage brokers licenses to thousands of convicted felons, including bank robbers, racketeers and crack dealers.

"I believe there's been a rush to judgment by the media," Saxon said. "Unlike what's been reported in the media, we do not have a systemic problem of licensing felons."

But Chief Financial Officer Alex Sink, who has called for Saxon to step down, countered his remarks, saying there are provisions in the law that could have both allowed him to issue sanctions against loan originators and others who committed mortgage fraud and that the office "could have been denying more '' brokerage licenses to questionable officials.

"My distress about the situation is that the commission is coming before us today telling us about some of the things his department is going to be doing and he's known about these issues certainly for many months . . . and we could have been doing a lot more before we got to this point today," she said. "To me, it's too little too late."

Sink complained that "this is a much bigger issue'' and said the mortgage broker profession "has been begging for years for tighter requirements."

Crist echoed Sink's concerns and said The Herald's investigative report was "disturbing and distressing," but he ultimately agreed to take more time to check out the allegations before deciding how to proceed.

"I appreciate the press. I understand the media has a function and a job and a duty, but I’m a trust-but-verify guy also," he said "We’ve all had an opportunity since the story broke to review."

The governor said his "confidence was shaken'' and while he appreciated Saxon's service, "we've got to elect to make a difference, not to mark time. . . . All of us have a duty to hear the alarm bells and understand and . . . avoid some of these unfortunate circumstances for the public."

Agriculture Commissioner Charles Bronson and Attorney General Bill McCollum both defended Saxon and urged the Cabinet to further study the matter before making any decisions on whether Saxon should be held accountable for brokerage licenses falling into the hands of financial criminals.

Bronson said his reading of the law governing Saxon's office was that it was obligated to issue licenses to brokers in most situations. "It doesn't look like it gave you much option," he said.

McCollum said he is aware there were bad characters who have been issued licenses in the mortgage business but wants to clarify "the current state of the law with regard to the powers the OFR has or doesn’t have," McCollum said.

Eikenberg says broker oversight was "outrageous"

  Gov. Charlie Crist's top deputy, Eric Eikenberg, said Florida's flawed oversight of mortgage brokers and loan originators was "outrageous" and promised that the governor will respond to the Miami Herald's investigative report when he returns from Europe later this week.

''We have a law in place to protect consumers, and from what we've been told, that hasn't occurred,'' Eikenberg told the Herald. More here.

Advocacy group for the poor seeks Saxon's ouster

ACORN, the housing advocacy organization for low income Floridians, is demanding the resignation of Don Saxon, head of the Office of Financial Regulation and the state's top mortgage regulator. The organization cited the Miami Herald's investigative report, Borrowers Betrayed, which revealed that the state allowed thousands of felons to obtain mortgage brokers licenses and operate as loan originators, committing at least $85 million in mortgage fraud and swindling hundreds of victims of their life's savings.

"Don Saxon needs to be held accountable for allowing these crooks to rob Floridians of their homes and livelihoods," said Carolyn Patmon, Head of ACORN’s Anti-Foreclosure Committee. "We need to send a message to Tallahassee that we will not allow the mortgage industry continue unabated with little fear of retribution."

Press conferences calling for Saxon's ouster will be held in Miami and Orlando on Thursday. For its part, ACORN has had its own problems with fraud within its own ranks, with an individual accused of embezzlement at its national office.

Dear Governor, it's the Lizard King again

The same group that sent a clemency application to Gov. Charlie Crist and the Cabinet requesting a posthumous pardon of Jim Morrison is trying yet again. Last week they sent a certified letter to Attorney General Bill McCollum, with yet another clemency application filled out, requesting that the state consider clearing Morrison's name.

Morrison, a native Floridian and lead singer of The Doors, was convicted of exposing himself during a notorious concert at the Dinner Key Auditorium in Coconut Grove back in 1969. During the performance the singer gave rambling monologues, used profanity and called on concert-goers to have sex with one another. He is also alleged to have pulled down his pants and feigned masturbation, which he denied doing. The trial featured contradictory accounts of what happened that night. But while Morrison was acquitted of a felony charge of lewd and lascivious behavior, he was convicted of indecent exposure and profanity. Morrison appealed his conviction, but he died of heart failure in 1971 before it was heard.

Dave Diamond, a cable TV producer and Ohio fan of The Doors, sent a letter last year to Crist, requesting a pardon. Crist, who went to Florida State University like Morrison, initially said he would consider it.  The Miami Herald also talked to Morrison's father, who said he would support a pardon as well. But so far there's been no action on the request and Diamond said he has gotten nothing back from the state that shows that they even reviewed the application he sent.

When Janet Keels, the coordinator of the Office of Executive Clemency, was asked about the application several months ago she did not know about it and said "Isn't he dead?" Keels also said that the state should probably deal with the clemency applications from the living first.

Diamond said in an e-mail that he and other supporters will "continue this effort since we feel we have more than proven our case," which includes citing precedents from other states where posthumous pardons have been issued.

Crist votes against paying more for SBA chief

Gov. Charlie Crist was the lone no vote on a plan presented Tuesday morning on how to hire the next director of the State Board of Administration. That plan, put together by acting director Bob Milligan, calls for next SBA chief to earn anywhere from $250,000 to $350,000.

But both Chief Financial Officer Alex Sink and Attorney General Bill McCollum supported the recommendation, saying they want the next head of the SBA to have an investment background.

"We need to do this right and we cannot expect to see the confidence restored if we do not pay,'' McCollum said. "I want to invest what we need to in this."

McCollum noted that the bonus scale offered to managers of the state's multi-billion investment fund has remained in the 5 to 8 percent range while other states offer as much as 75 to 100 percent.

The panel also agreed to hire a head-hunting firm and spend as much as $111,000 to conduct a nationwide search for the best candidate for the job and, Milligan said, the focus will be on leadership and financial expertise.

Here come the lawyers to the SBA

Following a suggestion from Interim Director Bob Milligan, the audit committee for the State Board of Administration voted today to hire an outside law firm to assist with the controversy surrounding with the Local Government Investment Pool.

The move to hire outside lawyers was urged by both Gov. Charlie Crist and Chief Financial Officer Alex Sink. Tara Klimek, a spokeswoman for Sink, said the push for outside attorneys was another way to reassure investors about what is going on with the pool. Several people, including Pat Frank, the clerk of the court for Hillsborough County, have raised questions about the legality of what the trustees of the SBA have done to the local pool, including limiting money to the assets and using November interest payments to help out Fund B, the segregated group of investments that caused the near collapse of the pool.

"This is to provide more confidence to investors,'' said Klimek. "There have been a lot of rumors...This is to answer those legal questions.''

Crist and Sink urge Milligan to hire "outside counsel" to look at state board

Gov. Charlie Crist and Chief Financial Officer Alex Sink have released a somewhat cryptic joint statement that says that they have suggested that Bob Milligan, interim director of the State Board of Administration, to hire "outside counsel" to assist the SBA.

The joint statement says: "It is essential that we examine recent events with the Local Government Investment Pool.  In the interest of our government investors and to restore confidence, all investments sold to the state of Florida must be reviewed."

Sink has already pushed for auditors to review what happened at the Local Government Investment Pool - which nearly collapsed when investors rushed to take out billions they had in the account run by the SBA.

What's not said on the release: No mention of Attorney General Bill McCollum, who is the third trustee that oversees the state board.

The release comes on the heels of an annoucement earlier today that the SBA has secured a AAAm rating from Standard and Poor's for the good assets left in Fund A of the Local Government Investment Pool.

Milligan appointed interim head of SBA

The trustees of the State Board of Administration has named former Comptroller and current insurance consumer advocate Bob Milligan as the interim executive director of the SBA. Milligan will start on Wednesday, taking over for Coleman Stipanovich, who resigned under fire last week from his job as executive director.

Among the top jobs for Milligan: Conduct a national search for a permanent executive director as well as put out a request for proposals to run the Local Government Investment Pool. BlackRock Inc., the giant N.Y. investment firm, was hired last week to run the troubled state fund on an interim basis.

Milligan announced he will hold a Jan. 3 meeting with all investors concerned about the local pool. A spokeswoman for Chief Financial Officer Alex Sink, who hired Milligan as the insurance consumer advocate, said that someone would fill in for Milligan's consumer advocate job while he takes over the reins of the SBA.

End of the year deadline could prompt legal fight over SBA fund

During a nearly two hour meeting between consultants from BlackRock Inc., the investment manager hired to run the troubled Local Government Investment Pool, and local government officials came this big looming unanswered question: What happens on Dec. 31?

That's the deadline, according to Patsy Heffner, Osceola County Tax Collector, that roughly $1 billion now held by tax collectors must be handed out to cities, counties and schools. Heffner reminded everyone that tax collectors are legally obligated under Florida law to distribute property tax money by that deadline. She questioned how the State Board of Administration can block tax collectors from carrying out their legal obligations, unless state law is changed between now and the end of the year.

Heffner brought up her concerns following comments from BlackRock officials that they may allow local governments to make additional withdrawals from the troubled pool in the first quarter of 2008, although probably only an additional 5 to 10 percent of their holdings in Fund A, the more than $10 billion part of the pool that still has highly-rated investments.

Crist calls emergency SBA meeting

Gov. Charlie Crist has decided to call an emergency meeting of the trustees of the State Board of Administration for Tuesday at 3:30 p.m.

The meeting comes a week after the SBA trustees - Crist, Chief Financial Officer Alex Sink and Attorney General Bill McCollum - voted to break up the Local Government Investment Pool into two separate accounts and place limits on when cities, counties and school districts could withdraw money they had invested into the pool. On Nov. 29, the SBA trustees froze access to the pool after local governments withdrew $10 million in a two week period.

Somewhat quiet day at troubled state fund

The State Board of Administration reported $77.4 million worth of withdrawals from the troubled Local Government Investment Pool, although they also reported $26.6 million in deposits for a net reduction of $50.8 million.

Clay County Utilities chose to pay a 2 percent penalty - $272,151 - in order to withdraw $13.3 million. There is now $10.24 billion left in the primary fund set up last week by the state and BlackRock, the N.Y. investment firm hired to manage the fund.

Another half a billion withdrawn from the fund

The State Board of Administration reported that another $560 million was withdrawn Friday morning from the Local Government Investment Pool by investors. This now brings the total of Fund A, the account that still allows withdrawals, to be $10.2 billion. There were some people who did deposit some money in: This morning's deposits were $1.5 million.

Since reopening the pool to investors after it was frozen for a week, roughly $1.75 billion has been withdrawn. BlackRock, the N.Y. investment firm now in charge of the pool, said earlier this week that there was about $2 billion that could be cashed out of the account fairly easily.

Blackrock report on state fund: separate high risk

Blackrock, the financial consulting firm, completed its emergency analysis of the state's Local Government Investment Pool to the State Board of Administration and presented it to the state late Monday. The conclusion: six percent, or $867 million, of the funds are securities in default, 8 percent or $1.2 billion are "under stress" and 86 percent or $12 billion are in high quality money market funds.

Their recommendation: the high risk should be contained in a separate fund. The governor and Cabinet is meeting now to discuss the details.

Here's Blackrock's report: Download black_rock_report.pdf

Crist gives lukewarm endorsement for agency head

Gov. Charlie Crist did not give a glowing endorsement of Coleman Stipanovich, the executive director of the State Board of Administration, when asked about him at a press conference on Monday. The state board is coming under fire for the turmoil surrounding the local government investment pool, which Crist and his fellow board members froze at an emergency meeting last week.

When asked how high his "confidence was" in Stipanovich, Crist would only say "he works hard." Stipanovich, who is the brother of J.M. Stipanovich, the powerful lobbyist and one-time campaign manager for Jeb Bush, was named executive director while Bush was governor and works at the pleasure of Crist, Chief Financial Officer Alex Sink and Attorney General Bill McCollum.

When asked however if his job were in jeopardy, Crist said "I wouldn't say that."

State puts a freeze on investment pool

The State Board of Administration _ made up of Gov. Charlie Crist, Chief Financial Officer Alex Sink and Attorney General Bill McCollum _ voted at an emergency meeting to put a freeze on the local government investment pool, meaning that cities and counties with money in the $15 billion account cannot take any money out until at least next week.

The move comes in the wake of counties and cities withdrawing large amounts of money in the last two weeks. Since Nov. 14 roughly $10 billion has been withdrawn from the pool, sparked by fears that investment managers had placed money in companies that have been hurt by the housing market slump and credit shortage across the nation.

Coleman Stipanovich, the executive director of the state board, urged Crist, Sink and McCollum to adopt a five-point protection plan for the pool that included pledging money from the Florida Retirement System to back up the pool. But this idea was flatly rejected and Sink said that the state needs third-party advice about how to proceed.

Cabinet appoints new revenue director

The former general counsel and long-time legislative director of the Department of Revenue, Lisa Echeverri, 42, was named the agency's new director by Gov. Charlie Crist and the state Cabinet today.

Echeverri replaces Jim Zingale, a 34-year veteran of state government, who is becoming the interim head of the Agency for Enterprise Information Technology. The newly-created agency will focus on IT development between agencies in state government and provide coordination for large-scale, multi-agency projects. Zingale will retire in February.

Highway Safety and Motor Vehicles wish list: Outlaw kids in backs of pickup trucks, hire more troopers

The Department of Highway Safety and Motor Vehicles will present on Tuesday morning its 2008 legislative proposals and 2008-09 budget request to Gov. Charlie Crist and members of the Cabinet. The lengthy list of items includes several changes to state law the department is seeking, including clamping down on letting kids ride in the open bed of pickup trucks.

Right now state law says minors have to have a seat belt if they are riding in the back of a truck that is on a "limited-access" roads, which usually means interstate highways and expressways. The department, pointing out that eight people killed in 2006, wants to ban minors riding in the open bed of trucks on all roadways.

Other legislative proposals the department would like lawmakers to consider: Making it easier to authorize police officers to draw blood from a driver who causes an accident that kills someone; Extending the term of drivers licenses to eight years; changing some of the fees charged to motorists.

The agency's budget proposal includes recommendations to let the department accept credit cards (which will require a transaction fee), give all troopers with less than 10 years of service a $500 pay raise, and add 60 positions to the Florida Highway Patrol. The department says the FHP continues to have a problem recruiting and retaining people to work as troopers.

(Of course this 2008 proposal is being submitted during the same week that lawmakers are poised to slash 57 positions from the FHP in order to save $3.7 million.)

Crist and board make a $1.27 billion decision

Gov. Charlie Crist and his two fellow members of the State Board of Administration _ Attorney General Bill McCollum and Chief Financial Officer Alex Sink _voted today to approve implementation of a new state law that bans Florida from investing in companies that do business with Iran or Sudan.

The State Board will now have up to 12 months to divest Florida's holdings in 21 foreign companies identified by SBA staff that do business in the two countries. Right now, Florida's $137 billion retirement system has assets worth $1.26 billion in these companies, including owning $303 million of equities in Royal Dutch Shell. McCollum praised the new law and contended it was the right fiduciary decision because both countries are "terrorist" nations and investments placed in those countries could wind up being risky.

Also on hand for the SBA decision: Sen. Ted Deutch, the Delray Beach Democrat who helped push the new divestment law. "This is a step that will help defend our country and hopefully end genocide,'' said Deutch.

Gelber and Rich call for renewed oversight of foster care

House Democratic Leader Dan Gelber and Sunrise state Sen. Nan Rich have each asked their presiding officers to convene a special legislative committee to investigate the child abuse cases that have emerged in news reports over the past few weeks.

"It is clear that we are having a problem keeping children in state custody safe,'' Rich, a Democrat, wrote in a letter to Senate President Ken Pruitt.

Gelber takes a swipe at DCF, run by Democrat and former Attorney General Bob Butterworth, but both he and Rich imply that the tragedy calls for more oversight from the Republican-led legislature. Said Gelber: "The allegations in the Herald and in a Channel 4 news story suggest that this was an entirely avoidable tragedy that resulted from serious lapses by both DCF and Our Kids.''

Rich also noted that, in light of the upcoming budget cuts, the legislature must consider "what impact budget cuts would have on this important child safety net.'' Download letter_to_speaker_rubio_regarding_dcf_oversight.pdf;  Download nan_rich_letter_to_pruitt.doc

Crist cuts off the Admiral

In an unusual display from his normal easy-going style, Gov. Charlie Crist today cut off former Admiral LeRoy Collins Jr., the secretary of the Department of Veterans Affairs, during a discussion of the Florida National Guard that occurred during this morning's Cabinet meeting.

Collins was beginning to talk about whether the National Guard was "overtaxed" with all of its responsibilities, including the war in Afghanistan and Iraq. While acknowledging that he has no direct control over the guard, Collins, who once was the U.S. Navy liaison to the Florida National Guard, began to say that he did in fact have an opinion on the topic.

That's when Crist cut him off, saying that he was the "commander in chief" and that he had been assured by Major General Douglas Burnett that Florida's guard was up to its current tasks. When asked by reporters after the meeting, Collins said he misunderstood the initial question asked to him by Agriculture Commissioner Charles Bronson regarding the National Guard and that if Burnett says Florida's guard is ready, then that must be the case.

Chance to pick state Education Commissioner could return to voters

Call it deja vu, but Florida voters could again have the opportunity to select the state's education commissioner under a proposed referendum that passed through the state Senate Friday.

The proposal by Sen. Frederica Wilson, D-Miami, would place the referendum before voters in 2008.  If approved, voters would elect an education commissioner in 2010.

While the proposal is stalled in the House, senators approved the plan 27-8, with lawmakers arguing the change gives voters more control over education issues like the FCAT.

Roughly nine years ago, Floridians passed a constitutional amendment to shrink the state cabinet by taking the Education Commissioner off the ballot and making the job an appointed position.

Crist on felons' rights

Gov. Charlie Crist argues in an Op-Ed in today's Miami Herald that some ex-felons should have their voting rights automatically restored. He has called a Cabinet meeting tomorrow to discuss his proposal, which civil rights advocates say falls short because it would require ex-felons to pay restitution they generally can't afford.

Read the Herald's story about the plan here and the editorial on the issue here.

McCollum defends clemency process

In an Op-Ed in today's Miami Herald, Attorney General Bill McCollum defends the hurdle ex-felons must overcome to get their voting rights back. Gov. Charlie Crist has called a meeting of the Cabinet to discuss the issue. Read the story here.

Comedy tonight in Tallahassee

Gov. Charlie Crist, Senate President Ken Pruitt, and House Speaker Marco Rubio will all be gathered at The Moon nightclub in Tallahassee tonight for the 52nd Sometimes Annual Press Skits that is put on by members of the Capital Press Corps. Each year the press corps lampoons those in politics, and each year the politicians return fire. Both Gov. Crist and the Senate have prepared their own skits that will also be presented once the reporters are done.

Proceeds from the event go to the Barbara Frye Scholarship Fund, which each year awards scholarships to college students training to become journalists. Expect a Dating Game skit dealing with Florida's first bachelor governor in more than 30 years, as well as jokes about Rubio and the spirit of bipartisanship in the Florida Senate...."On with the show, this is it."

Crist postpones clemency vote on felons rights

Gov. Charlie Crist postponed efforts Thursday to have the Florida Board of Executive Clemency vote on a plan to allow most felons automatic restoration of voting rights after they have served thier prison time.

   The governor appeared to have the votes necessary to have Florida join all but two other states and end the Jim Crow-era law that disenfranchises felons from voting, serving on a jury or obtaining many work-related licenses, but he wanted to avoid isolating fellow Republican, Attorney General Bill McCollum, as the lone vote.

Crist seeks compromise on felons rights on eve of clemency board meeting

On the eve of his first clemency board meeting as governor, Charlie Crist stepped up efforts to work out a compromise between his Cabinet colleagues on how to provide automatic restoration of civil rights to most felons. More here.

McCollum says meet more often to reduce clemency backlog

Florida Attorney General Bill McCollum has weighed in today with his answer to the backlog of felons awaiting approval from the Clemency Board for the restoration of their civil rights: meet more often.

In a letter to Gov. Charlie Crist, McCollum acknowledges that the backlog is "unacceptable'' and proposes as a solution to have each member of the Cabinet commit two people from their staff to help work on eliminating the clemency backlog and require the Cabinet to meet at least monthly -- and perhaps more often -- as the Clemency Board until the waiting list is gone.

Here is McCollum's letter to the governor: Download clemency_letter.pdf