Florida Zika emergency funds went to partner of Ann Scott’s aerial spray businesses

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott and First Lady Ann Scott

Gov. Rick Scott has used his emergency authority to spend $33.3 million to combat Zika, some of which went to pay for aerial spraying done by a company that is partnered with his wife’s mosquito spraying businesses in another state.

Florida Bulldog reported in August 2016 that Scott, via First Lady Ann Scott, had an undisclosed financial interest in Mosquito Control Services (MCS) of Metairie, LA. The company describes itself on its website as a “fully-certified team of mosquito control experts – licensed throughout the Gulf Coast, including Louisiana, Georgia, Mississippi, Alabama and Florida.”

Further examination of Louisiana corporate records, however, shows the Scotts are also tied to eight other active mosquito control firms all at the same Metairie address. Several have lucrative, multi-year contracts to provide aerial spraying and other services to local parishes and cities.

The nine are not on Florida’s list of state vendors. Records show, however, that at least four of them, including MCS, conduct aerial spray operations in Louisiana using planes owned by one of Florida’s largest Zika-fighting subcontractors, Dynamic Aviation Group of Bridgewater, VA.

Dynamic Aviation contracts with the Scotts’ companies to handle their aerial bug spraying because those companies have no planes of their own, according to Federal Aviation Administration records.

Dynamic is partnered in Florida with Illinois-based Clarke Environmental Mosquito Management, the principal vendor to more than a dozen Florida counties, cities and independent mosquito control districts, including Miami-Dade. FAA records list Dynamic or its affiliates as the registered owners of dozens of aircraft, including a fleet of turbine-powered Beechcraft King Air spray planes.

A Dynamic Aviation spray plane

“The Clarke and Dynamic Aviation Partnership is the leading provider of mosquito control application services to federal, state and local governments throughout the United States,” Clarke boasted in a bid document submitted to Ocala in August 2015.

Today, the Florida Department of Health reports that there are “no areas of ongoing, active transmission of Zika by mosquitos in Florida.” In February 2016, however, public anxiety in the state about Zika was on the rise.

Public health emergency

That month, Gov. Scott declared a Zika public health emergency in 23 counties and directed Florida’s surgeon general to decide how long the emergency declaration should last. It has continued this year in a hodge-podge of counties across the state, including Miami-Dade. Late last month, Surgeon General Dr. Celeste Philip re-declared a Zika public health emergency in Broward and Palm Beach counties citing travel-related cases. Emergency spending also carried over into 2017 in Miami-Dade and Broward.

 Gov. Scott led last year’s high-profile anti-Zika campaign. He also politicized it. From August through early November, during the height of the presidential campaign, Republican Scott’s office issued a dozen press releases attacking Washington, specifically the Obama administration and Florida Democratic Sen. Bill Nelson – who many believe Scott will run against next year – about the lack of immediate Zika funding.

Florida Surgeon General Dr. Celeste Philip

On Sept. 22, Gov. Scott wrote an op-ed article for USA Today in which he denounced Obama, called the “entire” federal government” incompetent and alleged that federal inaction against Zika was “sad, sick proof that Washington isn’t just broken, it must be completely overhauled from top to bottom.”

Scott’s article doesn’t mention how under Scott state money for mosquito control programs was cut 40 percent – from $2.16 million to $1.29 million – in 2011. Politico had reported that in a story published one month earlier. Likewise, Scott didn’t mention that he’d cut a special $500,000 appropriation for a public health “mosquito lab” in Panama City Beach, effectively shutting it down and “causing the state to lose half of its mosquito researchers,” according to Politico.

In response to an inquiry by Florida Bulldog, Florida Department of Health spokeswoman Mara Gambineri said the state has to date expended $52.8 million in Zika emergency funds, including nearly $9 million this year. Of that, Scott’s emergency order caused $33.3 million to be sent to 69 counties and mosquito control districts “to increase their capabilities and to prevent and respond to Zika,” she said.

State records also show the Department of Health paid Clarke $783,572 directly to supply mosquito traps and monitoring services in 2016-2017.

How much emergency money went to pay for aerial spraying is not known. “Decisions on the mechanism for vector control, whether it be aerial, truck, etc. were made by the mosquito control districts. We do not track the funding specifically each method,” Gambineri said.

Tracking spending on the county level is problematic.

For example, Miami-Dade spokeswoman Gayle Love said the county has paid Clarke/Dynamic $175,000 for aerial spraying since the governor’s February 2016 emergency order. Yet in May the county commission ratified its acceptance of $1.2 million in state emergency funds to pay for last year’s aerial spraying services. The balance was diverted into another pot of $22 million in emergency funds that paid for truck spraying, Love said.

‘Aviation solutions’

Privately owned Dynamic provides what it calls “special-mission aviation solutions” to customers that include “national defense, military intelligence, federal agencies, state and local governments, nonprofit research organizations and private companies.”

Records show the Scott’s nine mosquito control companies – all Louisiana limited liability companies with names like Mosquito Control Services, Mosquito Control, Terrebonne Mosquito Control and St. John Mosquito Control – are led by two officer-managers, Gregory Scott and Steven Pavlovich. The companies make most of their money exterminating mosquitos for local governments in Louisiana.

Gregory Scott, CEO of G. Scott Capital Partners

Gregory Scott is also the managing director of G. Scott Capital Partners, the Connecticut private-equity firm in which Ann Scott is a substantial investor-owner. Its investment program “aims to generate high financial returns by making direct control investments in established, U.S.-headquartered lower middle market companies,” according to paperwork filed with the Securities and Exchange Commission.

Also known as Scott Capital, the firm boasts on its website of its ownership of MCS as well as investments in other companies owned or formerly owned by Gov. Scott, including Continental Structural Plastics. Florida Bulldog reported in June that Gov. Scott apparently pocketed $200 million earlier this year after the $825 million sale of CSP to the Japanese conglomerate Teijin Ltd.

Gregory Scott has said he is no relation to Gov. Scott, but SEC records show that from 2000 to 2012 he led the private-equity group at the governor’s Richard L. Scott Investments. He previously told Florida Bulldog that Ann Scott is a “passive investor” in Scott Capital.

The governor and other Florida state officers are not required by law to disclose assets held in the name of their spouses or other close relatives.

Gov. Scott, a multimillionaire, maintains his personal investments in a state “qualified blind trust” that’s ostensibly independent, but is in fact overseen by another of the governor’s former business cronies, Alan Bazaar of New York’s Hollow Brook Wealth Management. Bazaar also serves as an advisory board member of Scott Capital, according to SEC records filed last year.

The governor’s office regularly cites the blind trust in declining to answer questions or comment on the known business dealings of Gov. Scott and the First Lady.

“After Governor Scott took office in 2011, he put all his assets in a blind trust so they would be 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,” the office said on Friday.

Dynamic Aviation was likewise silent in response to written questions.

“Dynamic Aviation declines to comment on the questions below,” said company spokeswoman Avis Foster in an email last week.

MCS manager Steven Pavlovich did not return phone messages seeking comment.

A lucrative business

The business of spraying mosquitos from the air can be lucrative. For example, MCS has a five-year mosquito abatement contract with Louisiana’s Jefferson Parrish that’s worth $4.3 million a year – or $21.5 million in total. The latest contract runs until Jan. 31, 2023.

A screenshot from MCS’s home page showing what it says is its “fleet” of mosquito spray planes

A bid document submitted by Scotts’ company in January shows how it cultivated goodwill with local politicians. An affidavit by company manager Pavlovich says MCS contributed $25,000 to the campaigns of 15 Jefferson Parish elected officials in 2015-2016.

Bid documents also disclosed that MCS passes its aerial spraying work in the parish to Dynamic Aviation, the same subcontractor that sprays in Florida.

MCS’s home page features a photo of what its literature calls “our fleet of Beechcraft King Air” spray planes. In fact, the photo is at least six years old, and FAA records show that the planes it depicts were owned or formerly owned by Dynamic Avlease, a member of the Dynamic Aviation Group.

Some agencies in Florida’s decentralized mosquito control scheme, like Broward County, own their own planes or helicopters and do their own aerial spraying. The Clarke/Dynamic partnership has mosquito control contracts with Miami-Dade, Orange, Osceola, Seminole, Martin, Henry, Volusia and Alachua counties, among others.

In its bid for a multi-year contract with the city of Ocala in 2015, Dynamic identified five planes that it said were “registered here in the State of Florida to perform mosquito control services.”

Online flight records indicate that the Scotts’ Terrebonne Mosquito Control, in addition to using the same aerial spraying subcontractor, may also have used that Florida-registered mosquito control plane.

In July one of those planes, tail number N72J, flew back and forth four times between Sarasota/Bradenton International Airport and Houma-Terrebonne Airport in Houma, LA, the records say.

Gov. Scott doesn’t let politics get in way of investing in firm that believes in climate change

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott and First Lady Ann Scott Photo: CNN

When Rick Scott ran for governor in 2010, he told a reporter he wasn’t convinced that global warming was real. In 2015, the Scott Administration was reported to have told state employees to lay off using “climate change” and “global warming” in official communications.

Today, the governor’s office dodges questions about Scott’s position on the use of those terms, saying instead, “Governor Scott is focused on real solutions to protect our environment.”

Still, the ultra-wealthy Scott hasn’t let his politics get in the way of making money. Through First Lady Ann Scott, the governor has a substantial financial stake in a sizable mosquito control company that recently declared on its Facebook page that “mosquitos will only get worse thanks to #climatechange” and “#globalwarming.”

The company is Mosquito Control Services LLC, and it had a banner year in 2016.

The Scotts’ big bet on the Zika fighter MCS is via G. Scott Capital Partners, a Connecticut investment firm in which Ann Scott is a major investor. The firm is run by Gregory Scott, no relation to the governor, and two other men who worked for the governor’s old Naples-based private equity firm Richard L. Scott Investments (RLSI) – and obscured that connection by omitting it from their online biographies until after Florida Bulldog disclosed it three years ago.

Gregory Scott has described Ann Scott, an interior decorator and owner of AS Interiors LLC, as a “passive investor” in G. Scott Capital Partners.

Mosquito Control Services’ Facebook page from April 27, 2017

Florida Bulldog first reported on Gov. Scott’s indirect and undisclosed ownership interest in MCS last August. Scott’s office would not comment on Ann Scott’s ownership interest in MCS.

Scott Capital, as it’s known online, manages several private funds and “family accounts” for a handful of extremely wealthy clients. The firm thoroughly vets potential company investments before negotiating a purchase. Likewise, the firm monitors the performance of the companies it acquires. Its investment program “aims to generate high financial returns by making direct control investments in established, U.S.-headquartered lower middle market companies” like MCS.

Taking control

As of January 2017, Scott Capital was holding approximately $102 million of its client assets.

GSCP MCS LLC was formed in Delaware in August 2014 to recapitalize and take control of MCS, according to reports filed by Scott Capital with the Securities and Exchange Commission. In March 2016, the fund was valued at just under $10 million. Twelve months later, the fund’s reported value had risen nearly 28 percent to $12,715,853.

Mosquito Control Services is an insecticide spraying company that’s based in Louisiana but does business across the Gulf Coast, including Florida, according to its website. It boasts a spraying “fleet of Beechcraft King Air turbine-powered twin-engine aircraft” and says the company’s primary customers are municipalities. MCS does not do business with the State of Florida.

MCS manager Steven Pavlovich did not return a phone message seeking comment.

The scientific consensus is that global warming and climate change will bring damaging sea-level rise that will create new mosquito breeding grounds and likely hike infection rates for mosquito-borne diseases like Zika, malaria and West Nile virus.

Like the Scotts and their advisors, stock market analysts see investor opportunity in the pest control services market, particularly the mosquito control segment. One recent report by Future Market Insights forecast solid industry growth over the next decade citing a variety of reasons including “prevalent weather conditions supporting insect growth.”

MCS, through its Facebook post, made clear its belief that global warming and climate change are very real concerns. It also shared an April 20 New York Times Magazine article with the ominous title, “Why the Menace of Mosquitoes Will Only Get Worse – Climate change is altering the environment in ways that increase the potential for viruses like Zika.”

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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