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The governor and the felon: the profitable, private partnership of Rick Scott and Ken Jenne

By Dan Christensen, BrowardBulldog.org 

Before he was governor, Rick Scott, left, funneled stock options worth $375,000 to then Broward Sheriff Ken Jenne

Before he was governor, Rick Scott, left, funneled stock options worth $375,000 to then Broward Sheriff Ken Jenne

Kimberly Kisslan’s sudden resignation from Broward Health’s governing board two weeks ago followed news of her immunized testimony in the 2007 corruption case that brought down Broward Sheriff Ken Jenne.

Since then, Gov. Rick Scott, who appointed Kisslan in July, has refused to answer questions about the matter or explain why a state background check failed to uncover Kisslan’s involvement in Jenne’s criminal scheme. Kisslan was BSO legal counsel under Sheriff Jenne.

Scott, however, has a little-known reason for not wanting to talk about Jenne. The governor and the convicted felon are old friends and business associates.

“I’ve just known (Scott) for years and years and years,” Jenne told this reporter in 2005.

Scott was a wealthy private investor in April 2003 when he funneled hundreds of thousands of dollars Sheriff Jenne’s way by recommending him for a lucrative seat on the board of directors of CyberGuard, a Deerfield Beach computer security company. At the time, Scott owned nearly 40 percent of CyberGuard’s stock.

cyberguardlogoLess than three years later, California-based Secure Computing bought CyberGuard for $295 million in stock and cash. Cyberguard’s annual report made public a few weeks after the announcement listed Jenne as the beneficial owner of 42,555 CyberGuard shares valued at $375,000 under the terms of the deal.

Jenne acquired most, if not all of those shares via stock options he received for serving on CyberGuard’s board.

CyberGuard’s core business was building and selling digital firewalls to shield computer networks from intruders. Its “target customers,” according to U.S. Securities and Exchange Commission records, were “companies, major financial institutions and government entities.” Cyberguard did not identify specific clients.

Why Scott wanted Jenne on CyberGuard’s board is not known, and neither the governor nor Jenne would comment for this story. Jenne, who went to prison for mail fraud and not disclosing benefits he received from BSO vendors on his income tax returns, previously said CyberGuard was not a BSO vendor.

SCOTT BUYS A STAKE 

Richard L. Scott, as the governor was known before he ran for office, made his initial investment in Cyberguard in August 1999 via Fernwood Partners II, which acquired $3.7 million in company debt, according to SEC and other records. Fernwood was a Delaware firm that bought, sold and invested in the stock and debt of other companies. Scott and his wife, Annette, were major equity shareholders in Fernwood.

As part of the deal, CyberGuard added Scott’s brother, William Scott, and former Columbia/HCA Healthcare executive David Manning to its board of directors. Gov. Scott was Columbia/HCA’s chief executive until 1997 when he resigned amid a federal Medicare fraud investigation.

Fernwood went on to acquire nearly 50 percent of CyberGuard before it was dissolved and its holdings distributed to its members in March 2003, SEC records say.

With that, Scott became CyberGuard’s largest individual shareholder. By August 2005, when Secure Computing announced it would acquire all of Cyberguard’s shares, Scott owned 8,249,597 shares worth $72,356,000 in cash and Secure Computing shares, according to SEC records.

Scott’s total investment in Cyberguard: about $10 million, the records indicate.

“When I initially made my investments in Cyberguard, I felt Cyberguard had superior products in the firewall industry,” Scott said in the press release that announced approval of the takeover by Cyberguard’s shareholders. “What was accomplished over the last five years is a testament to the management team we put in place and their commitment and focus.”

Scott kept nearly 4 million Secure shares when he joined Secure’s board after the transaction was completed in January 2006. He was briefly chairman before computer giant McAfee bought Secure in a $462 million cash deal in 2008. Scott walked away with $23 million.

INVESTMENT PARTNER RUNS SCOTT’S ‘BLIND TRUST’

SEC records identify Scott crony Alan L. Bazaar as another member of Fernwood Partners in the CyberGuard investment.

For a decade before Scott was elected governor, Bazaar helped manage his portfolio at the better-known Richard L. Scott Investments LLC. Today, as co-CEO of New York’s Hollow Brook Wealth Management, Bazaar oversees the “blind trust” established by the governor in 2011 to avoid conflicts of interest and manage much of his large personal investment portfolio.

Lobbyist William Rubin with Gov. Rick Scott Photo: Tampa Bay Times

Lobbyist William Rubin with Gov. Rick Scott Photo: Tampa Bay Times

Serving with Scott and Jenne on Cyberguard’s board was Fort Lauderdale lobbyist William D. Rubin, a longtime friend and political supporter of both men. Rubin was listed in SEC records as having 58,000 CyberGuard shares worth $510,000 in cash and stock.

In 2003, while together on CyberGuard’s board, Sheriff Jenne made Rubin an “honorary deputy sheriff.” He also bestowed a BSO “Friend of Children Award” on a lobbyist in Rubin’s firm, Noreen Reboso.

The Tampa Bay Times quoted Rubin about his friendship with Scott on the day of Scott’s election in November 2010.

“I got to know Rick in 1991 when he started his hospital company, and we’ve stayed close ever since. I love him,” said Rubin, who in 2009 lobbied in Tallahassee on behalf of Solantic, Scott’s walk-in clinic company. “He’s a very good friend. We’ve stayed in touch ever since.”

Rubin added that he would not benefit from Scott being in the Governor’s office. “I won’t be. I’ll quickly dispel that perception.”

Nevertheless, Rubin is today registered to lobby Scott and the Executive Branch on behalf of nearly 60 corporate and government clients, including Scott’s old firm, now called HCA Healthcare, and BSO under Sheriff Scott Israel.

Rubin did not respond to a request for comment.

Knowledgeable sources have said privately that they believe Rubin and/or Jenne prevailed upon Scott to appoint Sunrise City Attorney Kimberly Kisslan to the board of the North Broward Hospital District, also known as Broward Health, but there is no evidence to support it.

KISSLAN RESIGNATION TRIGGERS QUESTIONS

Kisslan resigned Oct. 18 – three months into her four-year term and two days after BrowardBulldog.org reported about her grand jury appearance under a grant of immunity.

Kisslan got into trouble with federal prosecutors due to personal legal work she did for Jenne while he was sheriff. Specifically, she and a BSO vendor coordinated the demolition of an old house with code compliance issues that Jenne owned in Lake Worth.

At the same time, Kisslan was negotiating a BSO lease extension with the vendor – quickly signed by Jenne – that called for the police agency to lease additional office space from him at a cost of $348,000.

The vendor, developer Philip Procacci, later paid the $8,130 demolition cost for Jenne and the matter became part of the corruption charges to which the sheriff pleaded guilty in September 2007.

Kisslan’s role in Jenne’s scheme is spelled out in public court documents filed at the time of his plea. Yet despite a background check, Gov. Scott was unaware of that damaging information when he installed Kisslan on Broward Health’s board, said spokesman John Tupps.

The governor’s office declined to discuss the vetting process for gubernatorial appointees.

There is, however, an intriguing Broward connection inside Scott’s Executive Appointments Office that dovetails back to both Jenne and Rubin.

Former Fort Lauderdale resident Carrie O’Rourke is the governor’s $116,000-a-year Director of External Affairs. Her duties include oversight of gubernatorial appointments.

From 2007-2009, O’Rourke was director of organizational development in Fort Lauderdale for Edify, LLC. That’s the health benefits consulting firm whose owners included convicted Ponzi schemer Scott Rothstein.

Jenne worked at Rothstein’s law firm after his release from prison in 2008. And in September 2009, New Times reported that Edify paid Jenne’s son, former State Rep. Evan Jenne, $30,000 as a consultant.

As finance director for Scott’s inaugural committee, O’Rourke worked with Rubin and his lobbying firm, The Rubin Group, to select candidates for the governor’s transition healthcare team.

In December 2011, as the governor’s deputy chief of staff, O’Rourke traveled to Israel with Rubin and his wife Lys as part of a 48-member trade mission delegation led by Gov. Scott, according to Sunshine State News.

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Latest comments

  • To be sure…from what you have reported, Rick Scott saved a company by acquiring its debt. Assisted in bringing in a Board that turned the company around (saving jobs and creating revenues). The company was sold, the people who received shares as compensation were able to make money for the work they performed….why is this story here? Maybe I have the wrong approach…excellent reporting on how the governor turns companies around and makes money while keeping people employed!

    How about positivedly reporting on the awesome new Broward Health Commissioner?

  • So, Gov. Rick Scott and Sheriff Scott Israel are both
    friends with Felon Ken Jenne. Very interesting. They
    are all on the take.

  • This governor either has an aversion to hiring people without questionable backgrounds or he’s just plain stupid.

    Yes to both.

  • Really? Where’s the news? This reads like the Six Degrees of Kevin Bacon game. Bravo Dan. You made the connection between a bunch of people that everyone already knew are acquaintances. Would prefer you spend your time on real journalism. Get back to work fighting real corruption instead of trying to breathe life into a very old story.

    As far as the ‘meat’ of this story, Ms. Kisslan was never the subject of an investigation. She was asked to testify and she did. Thousands of people testify in any given week. Her crime was ….. talking to investigators??? If that’s the case, then I guess I’m not qualified to serve on my kids’ softball team’s refreshment committee.

    Please! Do us all a favor! Get a life!

  • With all the explaining and the convoluted story line here, I’m not getting the crux of whatever very recent malfeasance might have occurred in regards to the Governor and his personnel.

    Certainly his “blind trust” isn’t blind, but that’s always a sad joke in plutocratic politics. Certainly there are those with quick financial success and with official appointments and consulting gigs and with other kinds of connections to those in power in this state. I’m even shocked there’s gambling- shocked, I tell you.

    Yes, there was also inside dealing and outright venality during Jenne’s time as Sheriff, and Scott has invested in all kinds of terribly dull business ventures to great success. With all the explaining about all those business transactions, however, I’ll need a further explanation to understand what the basic point is here.

    But, thanks for trying.

  • Why was she given immunity and why did she resign? Nice job Dan. I guess some folks still don’t get it. Maybe you can draw them a map. Oh wait a minute, you already did.

  • To all the people who say Rick Scott is good…keep sucking on that GOP tailpipe….Rick Scott is one of the WORST if not THE WORST governors of Florida! Look at what he has NOT done for Florida. Tea Party NAZI’s will always try and spin things to try and make it look good. When the NORMAL people can see just how fucked up it is…

  • Ken jenne is a little tyrant bastard when running BSO . If you spoke up or reported misconduct you would be fired. He allowed the dept to investigate their own crimes and have you fired. After getting out he went to work for scumbag Scott rothstein before he also went to prison for stealing 1.3 billion dollars. These scamming crooks need to be remove from this planet. What a bunch of self serving crooks.

  • It is a matter of public record, that our esteemed Governor Rick Scott is responsible for perpetuating the largest criminal fraud that ever took place on Medicare, placing an already burdened system on the backs of not me, but my children and their children.

    his admission of guilt, included paying a fine of $1.7 Billion, That’s. B.

    So, my question is: Why is his residence. address

  • we won’t have to worry about Rick Scott to much longer. He has done nothing for Florida especially with seniors. I have sent him many messages only to get excuse after excuse.

  • It never ceases to amaze me how people can have such hatred for people when the people are totally Innocent of the supposed bad things. Scott was the principal person behind killing Hillary-care. So BJ Bill sent the HHS hit squad to Florida and they found minor errors. Which Hillary s goons made it seem like they were major offenses. Anything to pleasure the Clinton criminals… Rick Scott did not want to pay the Clinton’s fines. But his board chose to pay so the Governor said I will see you in court. Guess what happened in court? He was found not to be guilty of anything what so ever…So now Mr Expert explain to me exctly what bad things the Governor did?.so stop the exaggerations and outright lies. Governor Scott took over from a half brain who was willing to jump into bed with anyone to get elected to anything. Its a shame people like you are allowed to lie about a fine Governor by a person like you who does not have one half the guts of our great Governor. Tell us how bad he is getting all these people employment….

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