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:

Movers and Shakers

Three inducted into Florida Women's Hall of Fame

A nurse who committed her life to providing medical care to Tampa’s black citizens, a Florida pioneer, and a women’s rights leader will be inducted into the Florida Women’s Hall of Fame by Attorney General Pam Bondi at 5 p.m. Wednesday in the Capital Courtyard. 

Nurse  Clara C. Frye, who died in 1936, transformed her Tampa home into a temporary hospital in1908 and then established the Clara Frye Negro Hospital there in 1923. A pavilion at Tampa General Hospital is named after her. Aleene Pridgen Kidd MacKenzie, a 92-year-old Ocala resident, established the FSU Foundation and in 1964, Gov. Farris Bryant  appointed her to chair the first Commission on the Status of Women; she was also the first president of a national women’s safety group. Pioneer Lillie Pierce Voss, the first non-Native American child born between Jupiter and Miami, grew up with the Seminole Indians in the wilds of what would become Palm Beach County. She and a brother later wrote a manuscript called "Pioneer Life in Southeast Florida."

 

Struggling in the polls, Scott releases campaign-style video highlighting jobs record

Is it 2014 yet?

On the same day that a Public Policy Polling poll came out showing that Gov. Rick Scott is still underwater with voters and trails potential candidates like his predecessor Charlie Crist, the governor’s office offered up a new campaign-style video touting his accomplishments.

The video shows news clips of economic doom and gloom during the last years of Crist’s tenure, with news achors highlighting record high unemployment and troubling economic indicators.

Halfway through the 2-minute spot, Scott appears, talking about how the state has turned around under his leadership.

“It’s the first time in five years that our unemployment rate has been below the national average,” Scott says on the video at a campaign-style event that took place Monday in Orlando. “Our unemployment rate is now down to 7.8 percent for January of this year."

The Department of Economic Opportunity highlighted the spot during a Cabinet meeting Tuesday.

Monica Russell, DEO's communications director, called it "our idea of how to jazz up the Cabinet meeting."

Reporters asked if Scott would be using the video as a campaign ad.

"Oh, no," she said. 

See the video here.

Times reporter Steve Bousquet contributed to this report.

@ToluseO

 

After firings of internal investigators sparked controversy, Citizens Insurance hires new forensic unit

Citizens Property Insurance Corp., which came under heavy scrutiny last year for firing four internal investigators who had discovered evidence of executive misconduct, has announced that new forensic accountants have been hired to root out fraud.

Citizens has hired three forensic professionals, forming a team that Joe Martins, the company’s Chief of Internal Audit, says will “provide an unprecedented level of internal oversight.” 

The abrupt disbanding of the Office of Corporate Integrity last year raised eyebrows, especially after the Herald/Times unveiled documents showing that the investigators had drafted an explosive report shortly before being ousted.

The report included evidence of large severance packages for disgraced employees, mishandled internal investigations, altered documents and a number of embarrassing workplace mishaps.

Citizens claimed that the firings were part of a restructuring effort, and the company announced Friday that the hiring of new forensic professionals is part of that effort.

Gov. Rick Scott said the OCI firings “concerned” him and asked his Inspector General to investigate last year. The report on that investigation, which follows another investigation into excessive travel spending at the state-run insurer, is expected to be released soon. In addition to the two inspector general reports, Citizens has come under fire for giving out large raises to executives, failing to negotiate large contracts and inadvertently giving away $2.5 million to another insurance company (the money has since been recouped).

Yesterday, Scott said he was “very disappointed” in what is going on at Citizens and he has asked the executives to return the large raises they received last year. Citizens said the raises were necessary to help the company compete with the private insurance industry, where compensation is higher.

The company's board is expected to address the salary issue at its next board meeting, but it's unclear if the executives will follow Scott's orders and return the money they've already received.

Citizens’ press release is below.

Dolphins bill gets unanimous vote in Senate, poll shows local referendum would be tough

The Miami Dolphins cleared another hurdle Wednesday as a Senate committee unanimously approved in the team’s plan to get taxpayer financing for a $400 million stadium.

The bill, SB 306, picked up a major amendment Wednesday, with lawmakers agreeing to allow Miami-Dade voters to have the final say on whether or not to approve the taxpayer subsidies for the stadium in Miami Gardens.

The referendum could be a tough sell, and potentially a deal killer, as a new poll suggests that Miami-Dade voters are overwhelmingly opposed to the Dolphins’ proposal. More than 70 percent oppose the proposal and most of those strongly oppose it, according to the poll from Dario Moreno, a political science professor at Florida International University.

Those supporting the bill brushed the poll aside, saying the team had its own internal polls that showed more favorable results.

“Ultimately, taking this through the referendum was the important piece to us,” said Dolphins CEO Mike Dee, who traveled to Tallahassee to voice support for SB 306. “We want the voters to have a voice, and at the end of the day, the facts will prevail.”

Marcus Bach-Armas, Manager of Corporate Affairs for the Dolphins,  said he questioned the validity of the poll because it came from “Norman Braman’s pollster.” Braman, a staunch opponent of taxpayer financed stadium deals, has campaigned heavily against the bill.

Sen. Oscar Braynon, D-Miami Gardens, who is sponsoring the bill, said he is not concerned about the referendum, and is instead focusing on getting the bill through the Legislature.

“My job is to pass it in the Senate, and that’s what I’m going to do,” he said, adding that there would be ample time to convince the public about the benefits of a new stadium. The bill has cleared its first Senate committee with a unanimous vote.

The amendment allows the referendum to take place before the bill is enacted. That could potentially allow Miami-Dade to set a referendum vote for sometime this Spring, ahead of the National Football League’s decision of where Super Bowl 50 will take place. South Florida is being considered, and the Dolphins say a newly renovated stadium could help give the region a leg up.

“This is going to be a great economic boom to my community and to the state of Florida,” said Braynon.

If the plan gets approval from a majority of Miami-Dade voters, many of whom are still stinging from the widely panned Marlins stadium deal, the Dolphins are likely to get a flashy new stadium.

Scott puts a spotlight on sex trafficking victims in address

In his State of the State Address, Gov. Rick Scott highlighted human trafficking, saying his Florida Families First budget invests $1.5 million of his $74.2 billion budget to provide safe houses for victims.  

In his speech Tuesday morning, Scott referred to Allison Good, who in a YouTube video describes how she was used for sexual favors and drugged when she was just five years old.

Scott invites, applauds biz owners in State of State speech

Gov. Rick Scott gave shoutouts to several business owners and economic development professionals during his State of the State speech Tuesday, heralding the business community for creating jobs in Florida. 

Scott, a former CEO-turned-governor, has made courting corporations and businesses a staple of his legislative strategy. According to Scott, who gave an upbeat address to kick off the legislative session, “It’s working.” 

The governor personally invited business owners and acknowledged them during his speech. 

Invited were: Wes Bush (CEO of Northrop Grumman), Dave Brown (president of Johnson & Johnson Vision Care in Jacksonville), Michelle Robinson (Regional Vice President of Verizon) and Frank Unanue (president of Goya Foods in Miami). 

Scott has highlighted all of the businesses in the past for creating jobs, often with taxpayer incentives from the state. 

Scott hailed Verizon VP Robinson in his speech for the company's decision to locate a new facility in Central Florida, a move he said would bring “hundreds” of jobs to the state. 

Robinson said Scott’s recruitment efforts helped Verizon choose Florida over other states for its expansion project. 

“What it came down for us was quality of life, availability of a qualified labor pool and the cost of living factor,” she said in an interview. “I think Florida is very competitive with Gov. Scott and the work that [Commerce Secretary] Gray Swoope is doing… working hard to compete for new jobs in Florida.” 

Florida taxpayers also chipped in millions of dollars in economic incentives awards to seal the Verizon deal. Scott is asking for nearly $300 million in funding for incentives deals this year, but lawmakers have expressed skepticism. 

Scott also acknowledged Bill Johnson, director of the Port of Miami and Chairman of the Florida Ports Council, during the speech. 

“When the Miami port dredge project is completed, along with the Panama Canal expansion, thousands of new jobs will be created,” Scott said. 

Unanue, who welcomed Scott to a recent “work day” at Goya Foods in Miami, said the state’s business climate was improving.

“I think the state has turned around,” he said. “We’ve been growing. And I see it around in the community as well… You see people going out and moving, going out to clubs and restaurants. You see the economy moving again.” 

Scott stuck to that theme during his speech, which repeatedly used the phrase “It’s working” and pointed to the brightening spots of Florida’s economy.

While the economy is slowly improving, job creation in Florida still lags the national pace. Florida is adding jobs at a growth rate at 0.7 percent, half the rate of the U.S. Much of the drop in the unemployment rate—which is down 3 percentage points since Scott was elected—is due to a decline in labor force participation.

@ToluseO

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Florida House release new app, Weatherford brushes off 2014 rumors

The Florida House of Representatives released a new mobile app that House Speaker Will Weatherford said will “set a national standard.”

The app, reported by the Herald/Times yesterday, will allow users to track the legislative process on their mobile devices, with features like live streaming from the Capitol in Tallahassee and tracking of bills.

“This is the way that people are communicating with their government,” said Weatherford, a Wesley Chapel Republican.

The app is expected to be released next week, as the 60-day legislative session begins.

Read more about it here and see the House press release here.

After the press conference, Weatherford took questions from reporters on a range of issues, including Medicaid, Citizens Insurance, the budget sequester and Internet cafes.

He brushed off questions about a potential run for governor against Rick Scott, while continuing to differ from Scott on the key issues of Medicaid expansion and across-the-board $2,500 pay raises for teachers. 

“I think people who are saying those things must not know me well,” he said about those who are whispering about a 2014 primary challenge. “I’m busy enough trying to be the Speaker of the House… I’m not thinking of any of that stuff right now.”

Weatherford did not specifically rule out the possibility, but said that he doesn’t “have any plans to do anything like that.”

Citizens releases laundry list of internal complaints

Citizens Property Insurance, which came under intense scrutiny last year when it fired four corporate investigators, released a report to show that it has not broken the rules when it comes to corporate integrity.

According to a review of 474 cases investigated since 2008, “all complaints were addressed and corrective action taken in accordance with Citizens’ policies in place at the time.” 

Citizens released information about the 474 cases of internal misconduct allegations ranging from sexual harassment to misuse of funds to falsified documents. Citizens Office of Corporate Integrity had investigated many of the allegations, but that office was abruptly shut down last year. The abrupt firings sparked backlash from top lawmakers, after the Herald/Times reported that the investigators had discovered evidence of misconduct by Citizens’ highest executives shortly before they were fired.

Gov. Rick Scott’s chief inspector general is looking into the firings after the governor said he was concerned about the “appearance of impropriety.”

The document released by Citizens is long, but it’s filled with case file information from workplace scandals at Citizens. The document reads like a laundry list of sexual affairs, corporate corruption, workplace pornography, discrimination, theft and other allegations. One case summary references an employee who regularly used his corporate credit card at what appears to be a strip club.

“The preliminary review of outstanding charges disclosed that employee had purchased alcohol on at least six separate occasions and entertainment at an adult entertainment establishment,” the report reads. The employee resigned in 2011.

Citizens is looking to reform itself after a series of scandals last year reported in the Herald/Times, including lavish executive spending, drunken exploits on company retreats, $2.5 million in overpayments to an insurance company and the abrupt disbanding of the Office of Corporate Integrity.

Announced reforms include new restrictions on travel spending, tougher standards for private contracting and new rules for company execs. 

Here’s a copy of the 474 complaints.

Here is the full release from Citizens:

Black eye for Florida's biz incentive program as Miami company fails

A Miami-Dade company that received a large tax incentive deal from the state of Florida folded last week, casting another black eye on the state’s job recruitment incentives program.

Banah International Group, a sugar company, was approved for a “qualified target industry” tax credit worth $437,000.

Adding insult to injury: News that Banah’s chairman had been convicted of cocaine trafficking five years before the company was approved for inventives.

Enterprise Florida, which does much of the vetting in Florida’s multimillion-dollar business incentives program, has been under heightened scrutiny in recent weeks as lawmakers have questioned the practice of doling out tax breaks and cash to companies promising to create jobs. EFI said that Banah did not disclose the criminal past of its chairman.

The organization pointed out, in all capital letters, that Banah did not receive any tax money from the state because it failed to create the jobs it promised.

“IF A COMPANY CANNOT MEET ITS CONTRACTUAL OBLIGATION, IT RECEIVES NO REFUND, AND WILL BE REMOVED FROM THE PROGRAM,” an Enterprise Florida spokeperson wrote.

Gov. Rick Scott is asking the Legislature to approve nearly $300 million in incentives funding this year, a massive increase from about $111 million last year.

Lawmakers are skeptical about the funding request, especially after at least three companies have gone bust in the last year after accepting incentives deals.

Groups like Integrity Florida and the Koch-brothers sponsored Americans for Prosperity have slammed Enterprise Florida’s incentive program, saying it picks “winners and losers” in the marketplace. When a company goes bust after accepting government funds—as was the case with Solyndra and Florida’s own Digital Domain—critics blame the government for picking a loser.

EFI has countered that narrative by stating it is using the taxpayer funds to recruit companies that create high-paying jobs in Florida.

Most of the deals that it approves go on to fulfill—and often surpass—their requirements, EFI has said.

In the case of Banah, EFI was surprised by the bankruptcy.

“There were no concerns regarding the financial viability of Banah,” EFI said.

@ToluseO

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