By Dan Christensen, FloridaBulldog.org
When newspapers across Florida reported recently that Gov. Rick Scott’s net worth jumped $83 million in 2017, what got missed or downplayed was that Scott also pocketed an astounding $120 million in unexplained outside income.
What did Republican Scott do with that $120 million? What was the ultimate source of all that money? The financial disclosure form the governor filed June 29th doesn’t say, his office and U.S. Senate campaign won’t talk about it and newspapers apparently didn’t ask many questions.
Scott declared the $120 million simply as income from his controversial blind trust. Under Florida’s flaccid qualified blind trust law that’s all he was required to say.
“Was it bribes? Was he dealing drugs? Does he own medical marijuana dispensaries? We don’t know,” said Tallahassee attorney Don Hinkle, who is suing Scott for failing to comply with a constitutional requirement that he fully disclose his financial interests.
Scott’s financial disclosure form makes clear the $120 million is atop the governor’s otherwise eye-popping declared net worth of $232.6 million. That means the governor either spent the $120 million, or more likely put it somewhere he believes he is not legally required to report it as an asset – like flipping it into his wife’s revocable trust, a ready source of campaign cash in the past that could come in handy again as Scott seeks to oust Democratic incumbent U.S. Sen. Bill Nelson.
The ultimate destination of Scott’s mysterious $120 million, and where it originally came from, would seem to be a matter of intense public interest. Never before in Florida history has a governor – or for that matter any public official – reported receiving such a huge sum of cash.
Interestingly, Scott’s $203 million windfall – $120 million plus his $83 million bump in assets – closely tracks what Florida Bulldog exclusively reported in June 2017 was Scott’s share from the sale of Michigan-based Continental Structural Plastics (CSP), a maker of lightweight composite materials used in cars and trucks, to Japan’s giant conglomerate, Teijin Ltd. The $825 million deal closed on Jan. 3, 2017.
Gov. Scott created RLSI-CSP Capital Partners in 2005 to purchase a majority interest in Continental. RLSI is short for Richard L. Scott Investments, the governor’s former equity firm. How much Scott invested isn’t known, but public disclosure documents he filed when he ran for governor in 2010 show his personal ownership stake in RLSI-CSP Capital Partners LLC was then worth $19.4 million. By 2013, Scott reported it to be worth $43.9 million.
Paperwork filed by Teijin with the Tokyo Stock Exchange when it bought CSP said RLSI-CSP Capital Partners LLC owned 66.7 percent of CSP worth $550.3 million. Florida Bulldog reported last year that via his blind trust Scott’s likely stake was worth $200.75 million. The rest would have gone to 13-investor partners in RLSI-CSP, Florida First Lady Ann Scott and other Scott family members and close associates, including Gregory D. Scott.
Greg Scott, who has said he is not related to Rick Scott, is identified in Teijin’s filing as the manager of RLSI-CSP. He also runs the Connecticut-based private investment firm G. Scott Capital Partners that’s as much as half-owned by a company controlled by Ann Scott. Scott Capital, as it is also known, has said it invests the capital of only one family. In 2015, it reported having $291 million under management.
Florida Bulldog has reported that Scott Capital is something of a mirror image of Gov. Scott’s old firm, Richard L. Scott Investments. Not only is it run by Greg Scott and two other ex-RLSI employees, it uses RLSI’s old law firm, describes itself in identical language and boasts a portfolio that includes a half-dozen large investments that were actually made years ago by RLSI, including Continental Structural Plastics.
Mission to Japan
In November 2013, Gov. Scott led a six-day mission to Japan seeking more “direct investment” in Florida. Scott’s office said he met “with more than a dozen leading Japanese companies and spoke to more than 350 business leaders.” That included a luncheon hosted by the politically influential Japanese Business Federation (Keidanren), whose active members include top executives of Teijin and another bidder for CSP, Mitsubishi Heavy Industries.
The governor’s trip produced little immediate benefit for Florida. Neither his office nor Enterprise Florida announced any new jobs or investments by high tech or other industries.
Asked whether Scott discussed CSP with either Mitsubishi or Teijin, his office said no. As early as December 2012 Teijin had publicly expressed an interest in expanding its business of manufacturing high-performance composite materials in the U.S. to meet growing demand.
The size of Gov. Scott’s reported assets and income for last year also raises questions about whether he valued them properly in previous years. For example, Scott reported in June 2017 that as of Dec. 31, 2016 his blind trust was worth $130.5 million. Within a week, however, CSP was sold and Scott’s blind trust was suddenly worth about $330 million. The trust’s value was soon reduced, however, when Scott withdrew $120 million, reporting it as income.
As a candidate for the Senate, Scott must soon disclose additional information about his personal finances. His Public Financial Disclosure Report was originally due May 15, but he was granted an extension until July 29.
Through his wife, the governor is the beneficial owner of tens of millions of dollars in assets. Florida law doesn’t require disclosure of a spouse’s assets. Senate rules do.
Much of Ann Scott’s assets are held in the F. Annette Revocable Trust. For example, shortly after her husband took office in 2011, he transferred to the trust his controversial $62 million stake in Solantic, operator of a chain of walk-in medical clinics. The first lady later sold that asset.