Gov. Scott’s blind trust and a company with a massive pollution problem

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott

Gov. Rick Scott

When Gov. Rick Scott put $133 million of his assets into a blind trust two years ago, he included his shares of Mosaic, owner of the Central Florida fertilizer plant where 215 million gallons of contaminated wastewater recently drained into an aquifer that provides drinking water for millions of Floridians.

Scott’s ownership interest in Mosaic was relatively small – he valued it at about $14,000 on the list of assets he placed in the blind trust – yet it provides another example of how the governor’s sprawling personal finances conflict, or appear to conflict, with his official duties.

Does Gov. Scott still have an ownership interest in Mosaic? Has it increased? On Wednesday, his office released a statement saying the governor is unaware of any sales, purchases or changes in the trust because it is “under the control of an independent financial professional.”

The trustee is New York-based Hollow Brook Wealth Management, whose chief executive is longtime Scott crony Alan Bazaar.

U.S. Securities and Exchange Commission documents filed earlier this year state that Bazaar also serves as an advisory board member of G. Scott Capital Partners, the private equity firm co-owned by First Lady Ann Scott and run by a trio of the governor’s former employees at Richard L. Scott Investments. Both the governor and Mrs. Scott have been substantial investors in Scott Capital’s investments.

Republican Gov. Scott’s handpicked Secretary of the Department of Environmental Protection, Jon Steverson, is now overseeing Mosaic’s response to the massive dump of contaminated water that occurred in late August when a 45-foot wide sinkhole opened at Mosaic’s New Wales fertilizer manufacturing plant in Mulberry, about 55 miles east of Tampa.

The Mosaic plant sinkhole in what was a large pond atop a gypsum stack. When the sinkhole opened, millions of gallons of acidic wastewater drained into an aquifer used for drinking water. Photo: WFLA Tampa

The Mosaic plant sinkhole in what was a large pond atop a gypsum stack. When the sinkhole opened, millions of gallons of acidic wastewater drained into an aquifer used for drinking water. Photo: WFLA Tampa

“Governor Scott will hold all responsible parties accountable for their actions and has directed the Department of Environmental Protection (DEP) to expedite their investigation,” Scott’s communications director Jackie Schutz said in a Wednesday statement. “Governor Scott has also directed the Department of Health to partner with DEP in their investigation to ensure all drinking water in the area is safe. We know Mosaic has taken responsibility, but our job is to ensure 100 percent safe drinking water.”

Earthjustice is a large nonprofit environmental law firm. Informed that Gov. Scott previously disclosed his ownership of Mosaic stock, Senior Associate Attorney Bradley Marshall said, “We’re always concerned about the governor’s ties to industry. We certainly do think the governor has not been a good protector of the environment in Florida. We’ve already seen veterans at DEP fired for doing their jobs.”

Mosaic, based in Plymouth, Minnesota, is a Fortune 500 company (NYSE: MOS) with extensive operations in Florida, where it employs 4,000 workers. According to the company’s web site, it mines phosphate rock from nearly 200,000 acres of Mosaic-owned land in Central Florida and potash from mines in Canada. The products are processed into crop nutrients that are shipped around the world. Mosaic’s revenues last year were about $9 billion.

Mosaic politically active

Mosaic Fertilizer LLC, the company’s principal operating subsidiary in Florida, is politically active. State records show it fields a team of 14 executive branch lobbyists in Tallahassee. Since 2008, Mosaic entities have contributed about $1.9 million to political candidates and causes, with about $840,000 going to the Republican Party of Florida and the Florida Republican Senatorial Campaign Committee, records show.

In October 2015, Mosaic Fertilizer LLC agreed to a nearly $2 billion settlement with the U.S. Environmental Protection Agency (EPA) regarding charges that its New Wales facility and other plants in Florida as well as Louisiana improperly handled 60 billion pounds of hazardous waste. Specifically, EPA inspectors found that Mosaic had mixed certain types of highly corrosive substances like sulfuric acid from its fertilizer operations with phosphogypsum and wastewater from its mineral processing. Sulfuric acid is used to extract phosphorus from mined rock.

Phosphogypsum is the radioactive byproduct that’s created when phosphate is turned into fertilizer.

An EPA press release at the time said the settlement “will ensure that wastewater at Mosaic’s facilities is properly managed and does not pose a threat to groundwater resources.’’

Gypsum stacks at a a phosphate plant in Florida Photo: Engineering and Mining Journal

Gypsum stacks at a a phosphate plant in Florida Photo: Engineering and Mining Journal

The sinkhole formed beneath one cell of a mountainous phosphogypsum stack topped with a 250-million-gallon pond filled with acidic wastewater from the fertilizer manufacturing process.

According to the company, plant workers noticed a decline in the water level on Aug. 27. While Mosaic quickly notified the DEP and the EPA, no public announcement was made until Sept. 15.

“A sinkhole formed under the west cell that we believe damaged the liner system at the base of the stack,” said the company’s initial press release. “The pond on top of the cell drained as a result, although some seepage continues.”

Mosaic went on to say it “immediately implemented additional and extensive groundwater monitoring and sampling regimens and found no offsite impacts.”

Company officials who appeared Tuesday before the Polk County Commission reiterated, “No water from the stack has migrated off our property.” The company also apologized for not notifying the public sooner.

Gov. Scott’s blind trust – his second while in office – was created under the terms of a secret trust agreement signed in June 2014. His office has declined to make the agreement with the trustee public.

Scott acquired Mosaic while in office

Gov. Scott acquired his Mosaic investment while in office. His first blind, created in April 2011 a few months after he was sworn in, disclosed no ownership of Mosaic shares.

Florida’s qualified blind trust law was passed by the Legislature and signed into law by Scott in 2013. The idea was to prevent conflicts of interest by blinding public officials and the public to their holdings, and also afford those who use them immunity from prohibited conflicts.

“The Legislature finds that if a public officer creates a trust and does not control the interests held by the trust, his or her actions will not be influenced or appear to be influenced by private considerations,” the law says.

But Florida’s blind trust law, crafted with mega-wealthy Gov. Scott in mind, did not contemplate that such a trust could at times become a see-through entity, making it ineffective.

For example, in March 2014 Florida Bulldog reported that SEC records showed Gov. and Mrs. Scott had recently sold $17 million worth of shares in Argan (NYSE:AGX), a company whose principal subsidiary builds and operates power plants in Florida and elsewhere.

Florida Bulldog reported in July 2014 about Scott ownership of shares in a natural gas pipeline firm, Spectra Energy, looking to build the $3-billion Sabal Trail pipeline across North and Central Florida.

In 2013, Florida’s Public Service Commission – five members appointed by Gov. Scott – unanimously approved construction of Spectra’s controversial pipeline venture with Florida Power & Light. Florida’s Department of Environmental Protection subsequently approved it, too.

What didn’t become known until the following year, however, was that Scott had investments totaling $110,000 in Houston-based Spectra and DCP Midstream Partners, a natural gas limited partnership 50 percent owned by Spectra. Scott only disclosed those interests in June 2014 when he closed his first blind trust and created his second blind trust while qualifying to run for re-election.

Florida’s ethics laws generally prohibit public officials like the governor from owning stock in businesses subject to state regulation, or that do business with state agencies. A similar prohibition exists on owning shares in companies that would “create a continuing or frequently recurring conflict” between an official’s private interests and the “full and faithful discharge” of his public duties.

The governor has said he was unaware of his Spectra investments because they were in his blind trust.

In February, Florida Bulldog reported that in 2012 Scott owned a $210,000 stake in a private equity firm that owned Fort Myers-based 21st Century Oncology when it was awarded a unprecedented 25-year, no-bid contract to supply radiation oncology services to taxpayer-supported Broward Health. An all-Republican board of commissioners appointed by Scott and his Republican predecessor made the award.

A spokeswoman for the governor said Scott wasn’t aware that 21st Century had sought the Broward Health contract and that no one at the private equity firm, Vestar Capital Partners, or 21st Century, had asked him to try to influence the hospital district’s selection process.

Pipeline foes ask DEP to deny key permit; Cite ‘conflict of interest’ by Gov. Scott

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott

Gov. Rick Scott

Opponents of a proposed natural gas pipeline in North Florida are asking Florida regulators to reject the project, citing both dangers to the environment and a “conflict of interest” by the regulators’ boss, Gov. Rick Scott.

The Florida Department of Environmental Protection announced in July its intention to award a crucial environmental permit and rights to drill beneath riverbeds that would allow Houston-based Spectra Energy (NYSE:SE) to construct the controversial, $3-billion Sabal Trail Transmission.

State records show Spectra Energy’s investors have included Gov. Scott.

On Friday, the nonprofit WWALS Watershed Coalition, an affiliate of the Waterkeeper Alliance, filed an amended petition asking the DEP to deny the permit or “at the very least” re-route the underground pipeline to avoid “the sensitive karst terrain that underlies north central Florida…especially drilling under the Withlacoochee, Suwannee and Santa Fe rivers.”

“The risk is not just to these waters…it is to the entire State of Florida whose growing population relies on the Floridan aquifer for much of its drinking water,” says the 34-page petition filed by WWALS president John S. Quarterman. The Floridan aquifer underlies all of Florida and parts of Alabama, Georgia and South Carolina.

Spectra Energy spokeswoman Andrea Grover, however, noted that DEP’s notice of intent to issue the permit followed nearly a year of discussions and review. “The permit requires full mitigation of all wetland impacts and protects water quality,” she said.

deplogoIf accepted as legally sufficient by DEP, the petition would put the brakes on the department’s plans to issue the permit and trigger an administrative hearing before any permit could be awarded. A DEP spokeswoman said Monday that the department’s lawyers are reviewing the petition.

The 474-mile Sabal Trail Transmission LLC is a joint venture of Spectra Energy Partners and Florida Power & Light parent NextEra Energy. It is intended to supply fracked natural gas to fuel a new generation of gas-fired power plants across the state, including Port Everglades.

Sabal Trail is to run across Alabama and through southern Georgia where it will enter Florida in d County. The Florida leg, 257 miles long, will push south through a dozen counties to a hub in central Florida south of Orlando. Along the way, the pipeline would be installed beneath several rivers.

‘REASONABLE ASSURANCE’

In the July 10 notice of intent, DEP Central District Director Jeff Prather wrote that Sabal Trail had provided DEP with “reasonable assurance” that pipeline construction would comply with state laws and rules. Likewise, Prather wrote, the department determined that “construction and operation” of the Sabal Trail pipeline would not violate state water quality standards.

“The applicant has also demonstrated that the construction…is clearly in the public interest,” Prather said.

The Federal Energy Regulatory Commission is the lead federal agency responsible for reviewing the Sabal Trail proposal and preparing an environmental impact statement. FERC’s decision could come as early as November.

The WWALS petition argues that the project is “clearly not in the public interest of the citizens of Hamilton and Suwannee counties who will be affected…without any benefit whatsoever.”

The petition describes the lands in north Florida along Sabal Trail’s proposed route as a rich habitat for native wildlife – including threatened species like the gopher tortoise and the eastern indigo snake.

The area is honeycombed with sinkholes and sensitive underground springs and caverns at special risk from the proposed, 36-inch natural gas pipeline. Forested lands will be cleared and wetlands filled to make way for the pipeline, substantially reducing wildlife habitat, a plan that is “not acceptable,” the petition says.

Schematic showing cross-section of the proposed HDD crossing of the Withlacoochee River and hypothetical karst features that could result in a hydrofracture (frac-out), significant loss in drilling fluid and potential loss of the borehole. Source: August 2014 report by geologist Robert Brown

Schematic showing cross-section of the proposed HDD crossing of the Withlacoochee River and hypothetical karst features that could result in a hydrofracture (frac-out), significant loss in drilling fluid and potential loss of the borehole. Source: August 2014 report by geologist Robert Brown

Drilling through the area’s karst terrain, formed by the gradual erosion of Florida’s limestone or dolomite rocks, could cause new sinkholes that could cause pipeline failure, property damage or even human injury, the petition says.

More ominously, the petition says the proposed use of Horizontal Directional Drilling (HDD) to bore through karst limestone in order to lay underground pipe at river crossings increases the risk of “frac-outs” that happen when a drill bores into an underground spring. The result can be a new sinkhole “resulting in potentially catastrophic effects on spring and river flows and water quality in both rivers and private wells.”

“This month another sinkhole opened just across the state line in Lowndes County, Georgia, threatening to absorb a road, as another did a few years ago,” the petition says. “Such sinkholes can form years after a pipeline is installed, as happened in Assumption Parrish, Louisiana in 2013 when Florida Gas Transmission had to move its pipeline.”

MORE STUDY NEEDED?

The petition calls for more study before such drilling “destroys underground caverns and spring conduits that may cause the extinction” of exotic species living in those caverns and springs.

Further, the petition cited the possibility of a pipeline failure and an explosion that would damage the underground karst terrain and springs and kill designated or threatened species like the alligator snapping turtle, American alligator and Suwannee cooter turtle.

The petition points out that a Spectra Energy pipeline exploded beneath the Arkansas River in Little Rock on May 31. It goes on to note that Spectra has been repeatedly fined by federal regulators in the U.S. and Canada for “failing to properly maintain and repair their pipelines and for failing to clean up contamination” when their pipelines leaked.

“Why is Florida DEP trusting this company with our valuable natural resources?” the petition asks.

With the Clinton Presidential Center in the foreground, this photo shows a Spectra Energy pipeline blowout beneath the Arkansas River in Little Rock on May 31. Photo Courtesy: Tony Cassady

With the Clinton Presidential Center in the foreground, this photo shows a Spectra Energy pipeline blowout beneath the Arkansas River in Little Rock on May 31. Photo Courtesy: Tony Cassady

Spectra Energy presents a different picture.

“Our safety record is better than the industry average,” said spokeswoman Andrea Grover. “Our reportable incidents were approximately half the rate of the industry average during the past five years.”

During the same period, Grover said, Spectra Energy operates about four percent of the nation’s natural gas transmission pipelines, yet received only two percent of the enforcement actions initiated by U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration.

Florida’s Department of Environmental Protection serves as staff to the Board of Trustees of the Florida Internal Improvement Fund, which owns the submerged lands beneath the rivers where Spectra Energy wants to run the pipeline. The DEP is delegated decision-making authority to issue an easement to allow construction under the Florida Administrative Code.

The WWALS petition says Gov. Scott, in his role as a member of the fund’s board of trustees, has a “conflict of interest” due to his “financial interests in Spectra Energy, the parent company of Sabal Trail Transmissions, as well as in Williams Company, the owner of the Transco pipeline from which Sabal Trail plans to get its gas.

“The governor and other public officials are prohibited by state ethics laws from owning stock in businesses subject to their regulation or that do business with state agencies,” the petition says.

In response, Scott’s office issued a statement saying the public is protected from conflicts of interests because his assets are in a blind trust “under the control of an independent financial professional. As such, the governor has no knowledge of anything that is bought, sold or changed in the trust.”

As FloridaBulldog.org has reported, however, the blind trust has not prevented public disclosure of Gov. Scott’s personal stock holdings. On June 25, for example, Scott and the trust reported to the U.S. Securities and Exchange Commission that Scott had sold 122,653 shares of Argan (NYSE:AGX) earlier that month for $4.87 million. Argan’s Gemma Power Systems subsidiary builds and operates power plants in Florida and elsewhere.

In March 2014, the Bulldog also reported that longtime Scott crony Alan Bazaar runs Hollow Brook Wealth Management, the trustee. Bazaar, who also manages another large Scott trust and family partnership, was a principal and a portfolio manager at the governor’s Naples-based investment firm for nearly 11 years before Scott ran for office.

You don’t need X-ray vision to see through Gov. Rick Scott’s blind trust

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott, right, and blind trust executive Alan Bazaar

Gov. Rick Scott, right, and blind trust executive Alan Bazaar

Governor Rick Scott keeps his $127.8 million stock portfolio in a blind trust intended, by law, to prevent him from having knowledge or control of his investments and to eliminate conflicts between the governor’s public responsibilities and his private interests.

But Florida’s qualified blind trust statute, a little-noticed part of the large 2013 ethics reform bill signed into law by Scott himself, isn’t doing its job. While veiling the governor’s assets from the public, the blind trust fails to keep him blind to his investments.

There are at least two reasons why: disclosure requirements in federal securities law that can undercut blind trust secrecy, and weak conflict-of-interest rules in Florida that don’t require public officers like the governor to disclose assets they own or control when held in their spouse’s name.

For example, on June 25 Scott and the trustees of his blind trust told the U.S. Securities and Exchange Commission that Scott had sold 122,653 shares of Argan (NYSE:AGX) earlier that month for $4.87 million. Argan is a publicly traded holding company whose Gemma Power Systems subsidiary builds and operates power plants in Florida and elsewhere.

The report filed by Scott and his trustees at New York-based Hollow Brook Wealth Management also disclosed that the governor continued to own 4.2 percent of Argan – or 606,124 shares – worth nearly $23.7 million at Tuesday’s closing stock price of $39.06.

The public report says, “No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of common stock that are the subject of this filing.”

This wasn’t the first time Scott made millions on a private stock deal while in office.

In March 2014, FloridaBulldog.org reported that the governor and First Lady Ann Scott recently had collected $17 million selling hundreds of thousands of shares of Argan held by the blind trust and other entities. The story also reported about other large transactions involving several other companies whose stock Scott owned.

Scott’s Argan stock sales included at least 140,000 shares held by the blind trust – then worth $2.5 million – which also retained 523,000 shares. The two other selling entities: the F. Annette Scott Revocable Trust and the Richard L. and F. Annette Scott Family Partnership, in which Scott has acknowledged he was a beneficial owner.

Scott’s June filing does not break down the number of Argan shares sold then by each entity in five trades made June 15-19. But on more than one occasion the blind trust, the first lady’s trust and the family partnership have coordinated transactions – buying or selling large numbers of shares on the same day, at the same price or in similar proportions.

SCOTT ‘HAS NO KNOWLEDGE OR CONTROL’ OF BLIND TRUST

Scott’s office would not elaborate. Spokeswoman Jackie Schutz released a statement Tuesday saying the blind trust is “under the control of an independent financial professional” and that the governor “has no knowledge or control of anything that is bought, sold or changed in the trust.”

Nevertheless, trustee Hollow Brook Wealth Management’s chief executive is Alan Bazaar who worked for Scott from July 1999 to January 2010 as managing director and portfolio manager at Richard L. Scott Investments. Hollow Brook is also an “investment adviser” to the Scott family partnership and the revocable trust in Mrs. Scott’s name.

Further, Scott and Bazaar were partners in a company that in 1999 invested in Cyberguard, a Deerfield Beach computer security firm. The company’s board of directors included then-Broward Sheriff Ken Jenne, who later went to prison for corruption, and Fort Lauderdale lobbyist and Scott confidant William D. Rubin.

To date, Gov. Scott is the only public officer in Florida to use a state qualified blind trust to shield his assets and obtain the safe harbor it provides from prohibited conflicts of interest, according to the Florida Commission on Ethics.

Keeping his securities portfolio in the blind trust means Scott does not have to identify his individual securities on his annual financial disclosure form. Instead, his form describes his biggest single asset as simply “Governor Richard L. Scott 2014 Qualified Blind Trust.”

While the state form does not detail his blind trust holdings, mandatory reports he must make to the SEC about his large stock transactions do. But they aren’t the only way information about Scott’s stock holdings have gone public.

Companies must file reports identifying their biggest shareholders. For example, Argan’s May 16, 2015 report to the SEC in advance of its annual meeting listed Richard L. Scott as a principal stockholder who then owned 965,255 shares, or 6.6 percent of the company.

pipelineGov. Scott also has made public information about the contents of his blind trust.

In June 2014, while qualifying to run for re-election, Scott closed his original blind trust, made public a list of his blind trust assets, then immediately put those assets back into a new blind trust.

The maneuver presented a snapshot of Scott’s stock holdings as of Dec. 31, 2013. Among other things, it revealed Scott was heavily invested in energy companies, including those that control the two existing natural gas pipelines serving Florida.

Also disclosed was Scott’s $108,000 investment in Spectra Energy and its affiliate DCP Midstream Partners.

Spectra is currently seeking regulatory approval to build the $3 billion Sabal Trail Transmission, an approximately 500-mile pipeline to run from Alabama and Georgia into North Florida and south to Orange County. The underground pipeline would supply fuel to the state’s new gas-fired power plants.

The Florida Public Service Commission, whose five members were appointed by Scott, unanimously approved Sabal Trail in the fall of 2013, before Scott’s stake in Spectra was publicly known.

Last month, the Florida Department of Environmental Protection said it intended to award a key environmental permit and easement for the controversial Sabal Trail project that’s majority-owned by Spectra Energy.

FP&L and Duke Energy, also partners in the project, have contributed $1.4 million to Let’s Get to Work, the political committee branded with Scott’s campaign slogan, according to federal records. They also gave a combined $5.8 million to the Republican Governors Association in 2013-14, which in turn contributed $18.3 million to Let’s Get to Work last year.

Florida’s First Lady invests quietly in investment firm that mirrors governor’s old company

By Dan Christensen, BrowardBulldog.org 

Governor Rick Scott and First Lady Ann Scott Photo: Meredyth Hope Hall

Governor Rick Scott and First Lady Ann Scott Photo: Meredyth Hope Hall

Florida First Lady Ann Scott doesn’t talk publicly about where she invests the many millions of dollars in assets her husband, Governor Rick Scott, has transferred to her since his election in 2010. She doesn’t have to because Florida’s public officials, including the governor, are not required to disclose a spouse’s assets.

But Securities and Exchange Commission records reveal one place she’s sunk a lot of money is an obscure “family” investment firm that boasts $160 million under management and operates using the online name Scott Capital Partners.

Scott Capital looks a lot like a corporate doppelganger of Richard L. Scott Investments, the governor’s private equity firm where he made millions for himself and his family putting together big-money investment deals.

SEC records show that three men who worked for Gov. Scott when he ran Richard L. Scott Investments now operate Scott Capital, which describes itself using the same three-sentence paragraph once used by RLSI. Scott Capital’s online portfolio boasts more than a half-dozen large investments actually made years ago by RLSI.

One of those investments was Solantic, which operated a chain of walk-in clinics. According to media reports, Gov. Scott transferred his $62 million investment in Solantic to his wife’s revocable trust amid allegations of conflict of interest shortly before taking office. Mrs. Scott reportedly sold the family’s stake in Solantic in June 2011.

Another Scott Capital feature that makes it look a lot like the RLSI organization run by Rick Scott is that RLSI’s law firm – Bradley Arant Boult Cummings – is now Scott Capital’s law firm.

That legal link also ties Scott Capital back to another Rick Scott venture because partner Stephen T. Braun, based in the firm’s Nashville office, was general counsel to Columbia/HCA Healthcare when Gov. Scott led that company. Braun and his firm have represented RLSI and Rick and Ann Scott in various stock transactions.

HIDING CONNECTIONS

While lineage with a sitting governor could be a valuable asset, Scott Capital has gone out of its way to obscure its connections to Florida’s governor and First Lady.

Online biographies of Scott Capital’s three principals – Gregory David Scott, Andrew K. Maurer and F. Bradley Scholtz – don’t mention that they once worked for Gov. Scott at RLSI. Instead, the bios each say they started with Scott Capital in the years the men actually began at RLSI.

The governor and Mrs. Scott would not be interviewed about Scott Capital, and the governor’s office did not answer written questions about the family’s relationship with the investment advisor firm based in Rowayton, Connecticut.

While Scott Capital doesn’t capitalize on its heritage, its website does not identify the firm’s own full legal name: G. Scott Capital Partners LLC. That omission is an impediment to obtaining public regulatory information about the firm and is odds with the company’s own statements on its annual registration applications to the SEC.

On those forms, the SEC requires investment advisers to disclose both their full legal name and the “name under which you primarily conduct your advisory business.” The name Scott Capital Partners isn’t listed on the company’s SEC filings.

The SEC disclosure forms are more forthcoming about the backgrounds of Gregory Scott, Maurer and Scholtz, stating that each worked for Richard L. Scott Investments LLC until 2012, around the time that name was shed and Scott Capital Partners was incorporated.

“Yes, it was in that time frame,” Scholtz said when asked when the name Richard L. Scott Investments was dropped and Scott Capital Partners was formed. Scholtz, who originates and evaluates private equity deals, referred further questions to Managing Director Gregory Scott.

Gregory Scott indicated his name was used to reflect his majority interest in the firm, which records show was organized as a limited liability company in Delaware in November 2012.

‘NOT RELATED TO RICK’

“I have the same last name. I’m not related to Rick, but that’s all I want to say. Why would I speak to a reporter?” he said.

SEC records say Gregory Scott owns 50 to 75 percent of the holding company that owns Scott Capital. Tally 1, a limited liability company incorporated in Delaware in November 2012 and controlled by the First Lady, owns the rest. The Frances Annette Scott Revocable Trust, which pumped $11.3 million into Gov. Scott’s 2010 campaign, owns a controlling interest in Tally 1.

Gregory Scott described the First Lady, an interior decorator by trade, as a “passive investor.”

The governor’s office did not respond to written questions asking whether Gov. Scott has an ownership interest in Tally 1. When Gregory Scott was asked if Gov. Scott was involved with Scott Capital he said, “That’s enough” and concluded the interview.

Gov. Scott’s lawyers told the Commission on Ethics last year that the governor placed all of his assets in a blind trust in 2011 to eliminate conflicts of interest by “blinding” himself to the nature of his enormous investments in stocks, bonds and other entities. The First Lady’s assets were not included and nothing in Florida law prevents the First Lady from telling her husband how she is investing the assets he gave her or prevents him from suggesting to her how she should invest her assets.

In March, BrowardBullldog.org reported that Florida’s 2013 blind trust law has proved ineffective in preventing public disclosure of the governor’s personal riches due to federal disclosure requirements regarding large stock transactions.

This year alone, through various entities including the blind trust, the Scotts made more than $20 million selling shares in two publicly traded companies, Argan and NTS communications. Argan’s principal subsidiary, power plant builder Gemma Power Systems, does business in Florida.

TRUSTEE IS EX-PARTNER, EMPLOYEE

A subsequent story reported that Alan Bazaar, chief executive of Hollow Brook Wealth Management which serves as the independent trustee of the governor’s $72 million blind trust, worked for Scott at RLSI for more than a decade prior to his run for governor. The governor and Bazaar also were partners a decade ago in a lucrative investment in a Deerfield Beach computer security company called Cyberguard.

Scott Capital reported to the SEC on March 27 that it provides management services for family investment accounts, a start-up private equity fund and an unspecified number of limited liability companies that facilitate large investments in single companies. The firm is paid a percentage of assets under management, performance fees and is reimbursed by clients for overhead.

As of Dec. 31, Scott Capital said it managed $160 million in client assets, most of it from a handful of high net worth individuals. Its public filings don’t identify them, but Scott Capital’s history, structure, ownership and portfolio indicate they include members of Gov. Scott’s family.

Scott Capital’s largest managed asset is RLSI-CSP Capital Partners, a limited liability company that SEC paperwork identifies as a private fund with a gross asset value of $120 million.

Gov. Scott created RLSI-CSP Capital Partners in 2005 in order to purchase Continental Structural Plastics, an Ohio-based automotive and air conditioning company supplier. Financial records made public last summer state that Gov. Scott put his ownership units in RLSI-CSP into his blind trust in 2011, valuing his stake at $14.2 million.

There is other overlap between the portfolios of Scott Capital and Gov. Scott’s blind trust. Both have reported large stakes in Pharmaca Integrative Pharmacy, a Colorado-based drug store chain, and Strike and Spare family entertainment and bowling centers of Tennessee.

A NEW DEAL

Scott Capital’s lone deal since Mrs. Scott’s investment is the May 2013 acquisition of of Valterra Products. The deal was accomplished using two limited liability corporations that Scott Capital’s SEC filings valued at $11.5 million. Valterra, headquartered in California, manufactures fluid control products for recreational vehicles, pools and spas and other industries.

Around the same time that Richard L. Scott Investments LLC employees moved to Scott Capital Partners, RLSI dropped the governor’s name and changed its name to Columbia Collier Management.

RLSI’s corporate history prior to 2007, the year of its incorporation in Florida, is unclear.  The venture capital firm with offices in Naples, Stamford, Connecticut and New York City, said it was established in 1997, yet a search of corporate records in more than a half dozen other states where Scott is known to have done business turned up no record that RLSI was previously incorporated.

Asked about that, the governor’s office did not respond.

It wasn’t until last year that First Lady Ann Scott began signing RLSI’s annual reports. This February, the company changed it name to that of the company that has managed it since 2007 – Columbia Collier Management.

Among Columbia Collier Management’s affiliates is another limited liability company set up by businessman Richard L. Scott in 2007, Columbia Collier Properties. Today, that entity is the registered owner of the Cessna Citation jet that Gov. Rick Scott uses to travel around Florida and elsewhere at his own expense, but with little public accountability.

The asset list for the governor’s blind trust does not mention Richard L. Scott Investments. It does, however, list ownership units in Columbia Collier Management that Scott valued at $2.2 million in April 2011.

Asked whether the governor maintains an ownership interest in Columbia Collier Management, spokesman John Tupps said, “Governor Scott is in full compliance with Florida’s blind trust laws.”

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