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Politics

Scott-Era Blind Trust Loophole Is No More

June 11, 2019 - 7:00am
Rick Scott and Ron DeSantis
Rick Scott and Ron DeSantis

The Florida blind trust law that allowed multi-millionaire former Gov. Rick Scott – now U.S. Sen. Rick Scott – to place investments in blind trusts that aren't open to the public is no more.

Scott’s successor, Gov. Ron DeSantis, has signed a bill unanimously approved by both Florida chambers during the legislative session that prohibits public officials from placing assets in blind trusts while in office.

Nothing personal, DeSantis said.

House Bill HB 6041 “makes sense,” he said, adding his endorsement does not mean he believes Scott abused the blind trust law.

“I’m certainly not suggesting he did,” DeSantis said. “I have no knowledge of what he did.”

That is why Sen. Tom Lee, R-Thonotosassa, wanted to get rid of the blind trust law to ensure elected officials’ financial interests are included in “information that’s available to the voters.”

“It’s great when successful people want to come in and bring their life experience to government,” said Lee, who sponsored the Senate version of HB 6041, during a March committee hearing. “But you have to play by the same set of standards as I do.”

Scott, the multi-millionaire founder of Columbia/HCA, the nation’s largest private for-profit healthcare company, was elected in 2010 as the wealthiest governor in Florida history.

The state constitution requires elected officials to disclose financial interests. But after Scott took office in January 2011, the Florida Commission on Ethics said it was impossible to verify if he was following the law and allowed Scott to create a blind trust to prevent conflicts of interests.

Scott established the blind trust under the management of two financial advisers and a former business partner. When he ran for re-election in 2014, he dissolved the blind trust and disclosed individual holdings and 2013 tax returns.

The tax returns showed Scott earned millions more than reported on his financial disclosure form, raising questions about whether he was controlling assets held by his wife, Ann Scott.

Among those investments held by Ann Scott were Gilead Sciences, which produces the drug the Florida Department of Corrections uses to treat inmates with hepatitis C; Spectra Energy, which is building the Sabal Trail pipeline in North Florida; Mosquito Control Services LLC, which offers Zika control spraying services to local governments and the state; and the parent company of Florida East Coast Industries, then owned by All Aboard Florida.

The revelations enraged Democrats and rankled many Republicans, who contended under the blind trust agreement, Scott did not have to detail specific investments and business interests like all other state officials must in annual disclosures.

Democratic attorney general candidate George Sheldon sued Scott in 2014, claiming the governor underreported his wealth by as much as $200 million.

The lawsuit was referred to the ethics commission which, in turn, referred to the 2011 blind trust agreement, which it then allowed Scott to re-establish.

Tallahassee attorney Don Hinkle, a former Obama fundraiser, is among those who continued to challenge Scott’s blind trust.

In a 2018 suit, Hinkle cited Scott’s 2017 disclosure that listed his net worth at $149.3 million, with $130.5 million in the blind trust. In 2018, Scott reported a net worth of $232 million – an increase of more than $80 million in one year – with $120 million in income.

The suit contended Scott’s tax filings didn’t document 2017 sales of two Michigan businesses – a $550 million sale of a plastics company and $825 million sale of an auto parts company – his family controlled.

Hinkle’s suit was set aside by the 1st District Court of Appeal in November since the records being challenged under the state’s blind trust law were now under federal campaign and public disclosure regulations, which only require candidates reveal income/asset ranges. Scott disclosed to the Federal Elections Commission [FEC] his wealth ranged between $255 and $510 million.

Scott’s use of his own money to pay for his governor races and senatorial campaign against three-term incumbent Democrat Bill Nelson has been an aggravation for Democrats and some Republicans.

According to the FEC filing, Scott spent $64 million of his own money in his race against Nelson. He spent nearly $78 million from his own pocket in 2010 to win his first race for governor and “only” $13 million to be re-elected in 2014.

In the three races, none won by more than 1.2 percent, Scott spent more than $150 million of his own money.

Prior to November, Scott had one joint fundraising committee, the Rick Scott Victory Fund, which raised $4.7 million and transferred $3.7 million to his New Republican PAC and to the National Republican Senatorial Committee.

Since going to Washington, Scott has aligned with four party-wide fundraising PACs to raise cash for GOP candidates nationwide, essentially “federalizing” his wealth and elevating his party stature.

John Haughey is the Florida contributor to The Center Square.

Comments

GetOverIt obviously needs a life

Oh and if you want to talk corruption, let's look into Dems like Pelosi, Feinstein and Boxer.

Oh and if you want to talk corruption, let's look into Dems like Pelosi, Feinstein and Boxer.

SCOTT should be "no more".

Sounds like you have mental issues issuing a threat over the internet

Why would you expect a disgraced business criminal to cease being a criminal just because he moved on to politics. You failed to mention he had significant holdings in the Sunpass and state construction companies. This type of insider trading and shady deals would put regular people in prison, not the shining politicians of Floriduh...

Sun pass was around long before Scott became governor. Get over it

Sun pass was around long before Scott became governor. Get over it

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