Lawsuit: Corrupt giveaway at Broward Health to cost $2.5 billion over 25 years

By Dan Christensen, FloridaBulldog.org 

Fort Lauderdale’s Broward Health Medical Center, flagship of the North Broward Hospital District.

A corrupt deal at Broward Health that “gave away” the public hospital district’s radiation business for treating cancer patients is costing the troubled public hospital system an estimated $100 million a year in revenue.

That stunning allegation about taxpayer-supported Broward Health’s 25-year contract with 21st Century Oncology is contained in an amended complaint in the federal whistleblower case brought by former Broward Health chairman David Di Pietro and unsealed last week.

Florida Bulldog reported in February 2016 that Gov. Rick Scott had a financial interest in 21st Century when Broward Health’s board awarded it the unprecedented 25-year, no-bid contract to provide radiation oncology services at the district. Republican Scott, who as governor appoints Broward Health’s board, was then an investor in a private-equity firm that owned 21st Century.

“Under the terms of the original deal over the course of a 25-year contract, [former Broward Health President/CEO Frank] Nask gave away in excess of $2.5 billion in potential revenues to 21st Century Oncology with a potential profit margin in excess of $500 million,” says the complaint.

“In return, Broward Health would receive annual lease payments from 21st Century for the radiation equipment and hospital space. The lease payments totaled approximately $880,000 a year.”

The original length of the contract is for 10 years, with an option for the company to extend the contract three times for five-year periods.

Gov. Scott’s appointments ‘controlled’

According to the complaint, Nask accepted kickbacks delivered by the governor’s friend, 21st Century’s Fort Lauderdale lobbyist William “Billy” Rubin, to make the deal happen. The complaint says Rubin “controlled” the governor’s appointments to Broward Health’s board.

Lobbyist William “Billy” Rubin, left, and Gov. Rick Scott

Following the board’s approval of the contract in January 2012, 21st Century contributed nearly $400,000 to Gov. Scott’s re-election campaign, Florida Bulldog previously reported. The company likewise gave generously to the Republican Party of Florida.

Nask did not respond to an emailed request for comment. Rubin did not respond to a message left at his office.

The governor’s office released this two paragraph statement:

“Neither the Governor’s office nor the Governor are named as a party in this lawsuit, which was filed against a private company four days after Mr. Di Pietro resigned from the board in April 2016. Governor Scott has acted to make sure that the North Broward Hospital District is accountable to the taxpayers they serve and will continue to do just that.

“In fact, 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 governor’s statement is at least partially incorrect, however. The trustee of the governor’s blind trust is Hollow Brook Wealth Management, a New York firm whose chief executive is Scott’s longtime business crony, Alan Bazaar.  Further, U.S. Securities and Exchange records show that Gov. Scott personally filed required reports disclosing large stock sales while those securities were in the “blind trust.”

The amended complaint has not yet been filed in the whistleblower case now before Fort Lauderdale U.S. District Judge Kathleen Williams. It was, however, filed last week in federal bankruptcy court in New York, where Fort Myers-based 21st Century is seeking to reorganize and shed more than half of its $1.1 billion in debt.

21st Century announced its voluntary filing for Chapter 11 bankruptcy protection in May in the wake of declining revenues and two expensive settlements with the Justice Department of alleged Medicare billing fraud in 2015 and 2016. The total cost of the settlements: $54.5 million.

Lawyers for Di Pietro, appointed by Scott to Broward Health’s board in September 2011, filed the amended complaint as part of an adversary action in bankruptcy court that asks the court to declare that, unlike 21st Century’s other debts, Di Pietro’s whistleblower action under the federal False Claims Act should not be discharged by the court.

The whistleblower suit

The lawsuit against 21st Century and 100 “John Doe” defendants seeks to recover money wrongfully billed to Medicare, Medicaid and other federal healthcare programs. Federal prosecutors recently declined to intervene in the case, but are keeping a careful watch on developments. Di Pietro stands to receive a substantial reward if his lawsuit leads to any recovery.

Kickback schemes traditionally involve payments that are doled out to facilitate an illicit scheme. But the alleged kickback scheme described in the complaint does not involve cash-stuffed envelopes.

Rather, the lawsuit contends that lobbyist Rubin told CEO Nask that if he supported approval of 21st Century’s contract, the governor would appoint board members who would protect his job, $680,000 annual salary and pension.

Nask allegedly accepted Rubin’s offer and later paid what the complaint calls “hush money” to buy the silence of the operators of another cancer care company, HealX, that Nask pushed out to pave the way for 21st Century. In all, the lawsuit says, Nask authorized the payment of $830,000 to Heal X and Dr. Anurag Agarwal.

Nask did not tell the board about the kickbacks that induced the deal or his hush-money payments, and led the board to believe that HealX had quit, the complaint says. Further, Nask “obscured” financial information about the deal, including “major losses” and the fact that the contract let 21st Century “bill, collect and keep all global revenues associated with outpatient radiation oncology services” – a “major change in the billing arrangement” for the district’s oncology services, the complaint says.

Broward grand jury hears first witnesses in criminal probe of Broward Health

By Dan Christensen and Buddy Nevins, FloridaBulldog.org 

Broward State Attorney Michael Satz Photo: Tom Tracy, Florida Catholic

A Broward grand jury began hearing testimony Wednesday about alleged criminal conduct at long-troubled Broward Health, the taxpayer-supported public medical system for the northern two-thirds of the county.

A panel of 18 grand jurors were on hand to examine potential criminal violations of Florida’s Government-in-the-Sunshine Law and state ethics laws by the seven-member commission appointed by Gov. Rick Scott that runs the health-care agency.

The grand jury may also take a broader look at Broward Health, which has been buffeted by allegations of mismanagement and insider dealing for years. Grand jurors have the power to recommend changes in the system’s governance and have done so with various governments in the past.

“I decided our office should focus on possible Sunshine Law violations and related matters that had come to our attention,” said Broward State Attorney Michael Satz.

Office spokesman Ron Ishoy indicated that grand jury testimony would reach into many areas of the public health-care system.

“We are in the midst of a wide-ranging investigation,” he said.

News of the county grand jury’s probe comes amid an ongoing federal grand jury’s look at suspicious purchasing practices at Broward Health. Florida Bulldog reported in February 2016 that the federal grand jury has subpoenaed Broward Health’s records about former procurement officer Brian Bravo and 16 companies, including MedAssets, a publicly traded, Georgia-based group purchasing organization.

‘No overlap’

Satz was reluctant to convene a grand jury on Broward Health last year because he felt that it might duplicate or get in the way of the federal investigation. On Tuesday, he indicated that was no longer an issue. “There continues to be good cooperation between the investigative agencies involved and no overlap,” Satz said.

Former Broward Health General Counsel Sam Goren entering the grand jury room on Wednesday. Photo: Florida Bulldog

Grand jury proceedings, both federal and state, are secret. Wednesday morning, however, subpoenaed witnesses began showing up outside the grand jury’s new home — Courtroom 10175 on the 10th floor of the new Broward County Courthouse Tower.

The kickoff witnesses were Broward Health’s former general counsel Sam Goren and ex-board chairman David Di Pietro. Goren, accompanied by his colleague attorney Jacob Horowitz, testified for an hour and 15 minutes. Di Pietro testified for nearly two and a half hours. Neither man would discuss his testimony nor disclose what matters he was asked about.

Appearing to testify in the afternoon were Pam Hatfield, senior executive secretary to Broward Health’s president/CEO, and former Broward Health Commissioner Maureen Canada.

Investigators led by Assistant State Attorney Tim Donnelly, chief of the office’s Public Corruption/Special Investigations unit, brought nine boxes of documents with them to the grand jury room. Accompanying Donnelly at yesterday’s proceedings were prosecutors Whitney MacKay and Chris Killoran.

Broward corruption prosecutor Tim Donnelly outside the grand jury room on Wednesday. Photo: Florida Bulldog

Broward Health is an independent special district whose legal name is the North Broward Hospital District. It operates four hospitals, including its flagship Broward Health Medical Center in Fort Lauderdale, and additional urgent care and outpatient centers.

The governor appoints a board of commissioners that runs the district and levies property taxes to help support its mission, which includes providing treatment for indigent patients. The board has seven seats, but two are currently unfilled. All five commissioners are Republicans appointed by Gov. Scott.

Di Pietro blows whistle

Di Pietro filed a federal whistleblower suit last year shortly after he quit the board. The lawsuit was unsealed late last week, and Florida Bulldog reported Monday that it contains a number of politically explosive allegations about insider influence, including kickbacks and “hush money” payments at Broward Health that reach up to the governor himself.

Former Broward Health chairman David Di Pietro exiting the grand jury room on Wednesday. Photo: Florida Bulldog

Prosecutors have fielded numerous complaints about the governance of the public-health system during the past 18 months. At least two of the complaints involve the controversy swirling around the hiring of Interim President/CEO Beverly Capasso.

One complaint alleges Capasso, who was a Broward Health commissioner at the time, violated Florida ethics laws when she voted to give herself her current job. Florida law on voting conflict states that “no county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure to his or her special private gain or loss.”

The CEO job pays Capasso $650,000 annually. A search for a permanent chief executive is underway.

Another allegation is that board members discussed hiring Capasso in private, thus breaking the Sunshine Law, which requires most public matters to be discussed in the open.

An abrupt hiring

She was hired suddenly as CEO during a May 8 Broward Health Commission meeting. Before the vote, fellow board members did little questioning of her background, her health care experience or how she would approach the job. Because of the lack of meaningful debate at the meeting when Capasso was hired, the move appeared preplanned.

After her hiring, information about Capasso’s background surfaced that was never publicly discussed before she was hired. The Sun-Sentinel reported that Capasso held a master’s degree from an unaccredited mail and online university that a federal investigator called a diploma mill during congressional testimony.

Broward Health Interim President/CEO Beverly Capasso talks with Commissioner Christopher Ure after Monday’s board meeting. Photo: Florida Bulldog

Gov. Scott appointed Capasso, a registered nurse whose experience included a stint as chief executive of Jackson Memorial Hospital, to Broward Health’s board in October 2016.

Another complaint filed with the State Attorney’s Office alleges that Broward Health Commissioner Christopher Ure used his position to get an investigator to threaten his mistress.

“I filed the complaint and went in to talk to Tim Donnelly about it. Donnelly told me they were going to hold a Grand Jury concerning Broward Health” but gave no timetable, community activist and blogger Dan Lewis said.

Lewis outlined his allegations in an Aug. 21 post on his Broward Health Blog.

WestonGuy954

“Christopher Ure and Jane Doe met online late in 2015.  He used ‘Guy Weston’ and ‘WestonGuy954@gmail.com’ as his online profile (clever, he lives in Weston and he’s a ‘guy’).  He also used an anonymous Google voice number 770-580-4009 to keep his communications secret,” Lewis wrote.

Lewis posted pictures that Ure allegedly texted the woman, including one he described as taken outside his daughter’s school play.

Dan Lewis

Late last year, Ure and the woman had a falling out.  She felt she was jilted and tried to contact Ure’s wife and Ure’s minister, Lewis wrote. Then one day she received a call from a private investigator trying to warn her off.

“As you know, um, our friend has a very important job and I, uh, look out after these guys so you can look it up,” the investigator said in a message that was recorded and given to Lewis.

The investigator worked for a law firm that in the past had sued Broward Health for malpractice.

Lewis complained to the State Attorney’s Office that Ure received “a favor” because he was a Broward Health commissioner involved in a lawsuit with the investigator’s employer. If proved, such a favor would constitute unlawful misuse of public office.

Ure did not return phone messages requesting comment.

Tools for change

Grand jury reports can be powerful tools for change, but their success has been mixed in Broward.

In 2009, grand jurors recommended tougher regulation of pain clinics that had proliferated in Broward, where 33 of the nation’s 50 leading dispensing physicians of Oxycodone were then located. The report helped bolster the argument that stricter laws were needed, and Tallahassee acted.

Repeated examinations of the Broward schools construction practices by local and state grand jurors failed to produce the same results.

In 1997, the grand jury blasted the Broward public schools for shoddy construction and overspending. But as a 2002 grand jury report noted, it changed nothing.

A 2015 report from the State Attorney’s Office again slammed the School Board for not following earlier grand jury recommendations, including those by a statewide grand jury.

Corruption allegations involving Broward Health, Gov. Scott unsealed in whistleblower suit

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott, left, and Fort Lauderdale lawyer David Di Pietro

New and politically explosive corruption allegations surrounding Broward Health’s no-bid, 25-year contract with 21st Century Oncology – a company financially tied to Gov. Rick Scott – are spilling out publicly with the unsealing of a federal lawsuit in Fort Lauderdale.

Florida Bulldog exclusively reported last year about 21st Century’s unprecedented 2012 contract to provide radiation oncology services at Broward Health, and how it was inked while the governor was an investor in a private-equity firm that owned 21st Century Oncology.

The 53-page whistleblower lawsuit brought by former Broward Health board chairman David Di Pietro against Fort Myers-based 21st Century and 100 “John Does” claims to provide the inside story behind the deal.

“The existence of the 21st Century contract was recently revealed in the media to the public. What hasn’t been revealed is why and how 21st Century received this extraordinary contract from Broward Health,” the lawsuit says. “The answer is kickbacks.”

Along the way, the complaint alleges, Broward Health’s former chief executive officer, Frank Nask, paid hundreds of thousands of taxpayer dollars in “hush money” to grease the deal. To get Nask on board with 21st Century’s plans, Fort Lauderdale lobbyist William “Billly” Rubin, one of the governor’s closest friends, allegedly offered Nask kickbacks of financial security and the governor’s political protection, while applying political pressure in the governor’s name where necessary.

Lobbyist William “Billy” Rubin

Specifically, “Rubin promised Nask that [the governor’s] appointments to the Broward Health Board would protect Nask’s continuing employment salary and pension as CEO,” the suit says. “Rubin also communicated the message to Nask that if he did not support the contract with 21st Century, then the appointments to the board would not be his allies and his employment would be terminated.”

Nask’s annual salary at the time was about $680,000, plus performance bonuses and benefits. At the time, it had been publicly reported that the federal government was investigating the district’s contracts with 27 of its physicians – a probe that led to a $69.5 million settlement in 2015 – and Nask “needed allies … Nask agreed to Rubin’s demands,” the complaint says.

21st Century executives ‘fully aware’

“Executives at 21st Century were fully aware and complicit in this kickback scheme,” the complaint says.

Neither Rubin nor Nask could be reached for comment. A spokeswoman for 21st Century said the company does not comment on pending litigation.

Gov. Scott’s Office released this statement: “(Neither) the Governor’s office nor the Governor are named as a party in this lawsuit, which was filed against a private company four days after Mr. Di Pietro resigned from the board in April 2016.  Governor Scott has acted to make sure that the North Broward Hospital District is accountable to the taxpayers they serve and will continue to do just that.”

Di Pietro declined to comment. His lawsuit seeks to recover tens of millions of dollars it says were wrongfully billed to Medicare, Medicaid and other federal health-care programs. If successful, whistleblowers like Di Pietro can collect huge rewards.

21st Century operates approximately 145 cancer treatment centers in 17 states. According to the lawsuit, 21st Century “orchestrated” the scheme “to control referrals of cancer patients for radiation oncology services,” targeting Broward Health because it is a major regional treatment center for cancer patients. “Thousands of patients insured by Medicare and other federal healthcare programs” provide “a lucrative revenue stream for 21st Century.”

The entrance to 21 Century Oncology’s headquarters in Fort Myers

21st Century has been a reliable contributor to Gov. Scott’s election campaigns. For example, state records show that between May 2012 and January 2014 – the year Scott faced a tough re-election challenge from former Gov. Charlie Crist – 21st Century gave more than $360,000 to Scott’s Let’s Get to work political committee. After Scott was re-elected, the company gave an additional $30,000.

Broward Health, whose legal name is the North Broward Hospital District, has 8,000 employees and operates more than 30 healthcare facilities including Broward Health Medical Center, Broward Health North, Broward Health Imperial Point and Broward Health Coral Springs. It is an independent special district run by an all-Republican board of commissioners appointed by the governor. The district is obliged to treat indigent patients and levies ad valorem taxes of about $170 million a year on property owners in North Broward.

Gov. Scott allegedly involved himself directly in the matter about March 2012 with a phone call to Di Pietro, whom he’d appointed to Broward Health’s board on Rubin’s recommendation in September 2011. Scott’s call came around the time “a colleague of Di Pietro’s” called then-Lt. Gov. Jennifer Carroll “to advise her that Rubin was using undue influence and political patronage to appoint commissioners to the Broward Health Board in order to get his clients’ contracts approved.”

Broward Health CEO Frank Nask Photo: Karla Bowsher

Scott phoned on a day he was interviewing two potential board members. “Di Pietro told Governor Scott that Nask and Rubin were hand-picking ‘candidates’… and that the two interviews he had that day were not independent candidates; rather they would be doing the bidding of Nask and Rubin. Governor Scott acted upset but he ignored Di Pietro’s concerns. Governor Scott continued to follow Rubin’s lead in appointments to the board,” the suit says.

Days later over lunch, March 27, 2012, Rubin “expressed frustration” at Di Pietro, telling the governor about “my appointments” to Broward Health’s board, the complaint says.

Pressure on El Sanadi

Among those who felt pressure from Rubin was Dr. Nabil El Sanadi, who succeeded Nask in December 2014. El Sanadi commited suicide on Jan. 23, 2016.

Shortly after El Sanadi was hired, Rubin set a Jan. 19, 2015 meeting with El Sanadi, lobbyist Jim Eaton, 21st Century boss Dr. Daniel Dosoretz and Di Pietro. The complaint says that at the gathering, Dosoretz is said to have “bragged” about his “close friendship with Governor Scott” and urged El Sanadi “to give more business to 21st Century.” Specifically, Dosoretz allegedly asked El Sanadi to arrange for Broward Health to circumvent eligibility rules of a government drug discount program for hospitals and buy the chemotherapy drugs used by his company to “save 21st Century monies on those drugs.”

Dr. Nabil El Sanadi, Broward Health’s late chief executive

Di Pietro, who operates his own Fort Lauderdale law firm, contends that Rubin continued to meet with El Sanadi “on a weekly basis” until El Sanadi’s abrupt death.

The complaint blames the corrupt 21st Century deal for leading to losses of more than $30 million for taxpayer-supported Broward Health between September 2011 and its filing in April 2016.  “Over the course of the potential 25-year term of the contract, Broward Health is on track to lose over $125 million.”  Potential billings by 21st Century during the 25-year term “will exceed $800 million,” the suit says.

Di Pietro and his attorneys filed the case under seal in April 2016 under the False Claims Act and Qui Tam statute, part of a Latin phrase that means “he who sues in this matter for the king as well as for himself.” The case was ordered unsealed Friday by Fort Lauderdale U.S. District Judge Kathleen M. Williams after the government declined to intervene. No explanation was given for that decision, though it could involve 21st Century’s July filing in bankruptcy court that seeks to reorganize and shed massive debt.

Prosecutors, however, reserved the right to intervene later “for good cause” or seek dismissal. The decision means the case will proceed with Di Pietro’s team of attorneys prosecuting. Lead counsel is Atlanta’s Bryan Vroon, who in 2015 represented whistleblower Dr. Michael Reilly while extracting $69.5 million from Broward Health to settle allegations of health-care fraud.

The death of Dr. El Sanadi marked the beginning of the end of Di Pietro’s chairmanship.

Six days after El Sanadi’s death, the governor’s chief inspector general, Melinda Miguel, informed Di Pietro that with Scott’s support she would be conducting a review of all of Broward Health’s contracts dating from July 1, 2012.

Timing of state probe of Broward Health ‘no coincidence’

“The cutoff date of contracts to be reviewed by the governor’s chief inspector general is no coincidence. Broward Health originally entered the contract with 21st Century in September 2011,” the complaint says. “There would be a public appearance of an investigation by the governor’s office but the 21st Century contract would escape review.”

Melinda Miguel

On March 18, 2016 Miguel sent a letter to Scott accusing Di Pietro and board member Darryl Wright of interfering with her investigation by hiring outside legal counsel for the board. “Within minutes” Scott suspended Di Pietro and Wright for “acts of malfeasance,” the complaint says.

Days later, Di Pietro asked a Broward judge to reinstate him to the board. On April 11, following a hearing, Circuit Judge Carol Lisa Phillips determined that Miguel’s letter and Scott’s executive order suspending Di Pietro were “devoid of any specific acts of malfeasance” and granted Di Pietro’s petition for reinstatement. Three days later, Di Pietro resigned from the board.

According to the lawsuit, the contract was the result of political intrigue initiated by 21st Century and led by lobbyist Rubin. Specifically, it says Rubin was hired in the summer of 2011 to approach Nask about obtaining a lengthy, exclusive contract.

Di Pietro voted to approve the 21st Century deal in January 2012, apparently not knowing of the governor’s indirect ownership interest in the company or Nask’s hush money payments to HealX Oncology. Months later, after learning of the payout from Broward Health’s then-internal auditor, Maria Panyi, Di Pietro began asking questions.

That summer and fall, Rubin told Di Pietro “not to discuss or investigate the HealX payouts because the issue would ‘hurt’ Nask, 21st Century Oncology and Governor Scott.” Rubin allegedly kept up the pressure on Di Pietro, instructing him to be a “team player” and to support the governor.

To obtain the contract for 21st Century, Nask first had to terminate the existing contract with HealX Oncology. To do so, he arranged for the payment of $830,000 in “hush money” intended to “buy silence” of HealX and Dr. Anurag Agarwal, the complaint says.

The complaint says Broward Health cut three checks to HealX without the board’s approval. Two checks were for $250,000, the limit on payments Nask had authority to authorize alone. The third check for $330,000 was justified as “director fees” for three years, and the district paid “without any supporting documentation.”

Nask ‘obscured’ major losses

The lawsuit says Nask didn’t tell the board about the kickbacks that induced the deal or his hush money payments, while leading board members to believe that HealX had quit. Likewise, Nask “obscured” financial information about the deal from the board, including “major losses” from the deal and the fact that the contract let 21st Century “bill, collect and keep all global revenues associated with outpatient radiation oncology services” – a “major change in the billing arrangement” for the district’s oncology services.

Nask also did not obtain a fair market valuation regarding “the economics of the deal with 21st Century.” Di Pietro didn’t learn the truth until years later, the complaint says.

In the summer of 2014, Nask “saw an opportunity to escape the kickback control of 21st Century” by supporting Charlie Crist over Scott in the gubernatorial race, the complaint says. Nask wanted to leak information then about the ongoing federal probe or to settle prior to the election to hurt Scott. But Rubin learned of Nask’s plan and told Di Pietro to “squash Nask like a bug” and “have him fired.”

Nask was gone by the end of the year, and Di Pietro recommended Dr. El Sanadi as his replacement. After apparently being reassured that El Sanadi would back 21st Century, Rubin pushed the governor to appoint to the board Maureen Canada and Sheela Van Hoose, two El Sanadi supporters. After El Sanadi’s appointment, “Rubin communicated to El Sanadi that he was indebted to Rubin,” the complaint says.

Rubin apparently forgave Nask for his political transgression. The complaint says Rubin lobbied Di Pietro to give Nask a ‘generous’ severance package. “Broward Health paid Nask a full-year of compensation after his retirement,” the complaint says.

In late 2014 and early 2015, Di Pietro “discussed with El Sanadi the unfortunate reality of political control at Broward Health” and that he would “face the challenge of working closely with Rubin” and his addressing his demands to protect and favor 21st Century.

“The message to El Sanadi was clear,” according to the lawsuit.

In addition to counts alleging false claims, the lawsuit also accuses 21st Century of making false statements to obtain payments, conspiring to submit false claims, causing claims to be falsely certified, knowingly retaining overpayments and making false records to avoid having to make refunds.

The complaint’s bottom line: “Without any bids or independent fair market valuations, a private company gained control of a major public hospital system’s referral stream of cancer patients, the entire radiation oncology infrastructure of general space, vault space and radiation equipment and ‘global revenues’ from treating such patients.”

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.

Rick Scott, Mike Pence: When campaign fundraising met tax incentives for Scott’s company

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott, left, accompanies then Indiana Gov. Mike Pence to a Feb. 5, 2016 fundraiser for Pence at the Fort Lauderdale office of the Tripp Scott law firm. Photo: Conrad & Scherer law firm

Two months after Florida Gov. Rick Scott helped then-Indiana Gov. Mike Pence fundraise in Fort Lauderdale last year, Pence announced a $650,000 incentives package for a company owned in large part by Scott.

Pence’s offer of Indiana taxpayer subsidies for Continental Structural Plastics came as Scott’s Florida contributors poured more than $125,000 into Pence’s gubernatorial re-election campaign. Scott kicked in another $5,000 personal check to fellow Republican Pence’s campaign.

The Tampa Bay Times called Scott’s personal contribution to Pence “unusual” because Scott “has never given more than $500 to a Florida candidate other than himself.” It also noted that Pence had “picked up more campaign cash from Florida than any other state, except Indiana and Washington, D.C.”

Pence’s gubernatorial campaign ended abruptly on July 15, 2016 when Donald Trump tapped him as his vice-presidential running mate. But before that the vice president had been in a tight re-election fight amid sagging approval ratings.

The Feb. 5, 2016 fundraiser for Pence was held at the office of the Tripp Scott law firm. Among those present was prominent Fort Lauderdale lawyer William Scherer, a Scott supporter and frequent donor to Republican candidates. Scherer could not be reached for comment. (Disclosure: Scherer, managing partner of Conrad & Scherer, is a donor to the nonprofit Florida Bulldog.)

Conrad & Scherer’s website includes a brief press release with photos of Pence and Scott at the fundraiser. The site says Scherer and Gov. Scott discussed “creating new jobs for Florida residents.”

Indiana election records show that for the first six months of 2016, until Trump chose Pence, nearly two dozen Scott supporters sent checks to Pence. They include two affiliates of Charters Schools USA; Jupiter investor Lawrence DeGeorge; prison operator The Geo Group, its political action committee, chief executive officer George Zoley and several other company executives; Next Era Energy PAC, run by the owner of Florida Power & Light; the Tripp Scott law firm and five of its attorneys.

Indiana’s incentives deal for CSP

On April 11, 2016, back in Indiana, Gov. Pence disclosed that the Indiana Economic Development Corporation – a group he chaired – had offered Continental Structural Plastics (CSP) $600,000 in conditional tax credits and $50,000 in training grants. CSP was to expand its 323-worker operation in the city of Huntington and add 80 jobs by 2020. CSP makes lightweight composite materials used in cars and airplanes.

“CSP’s growth speaks volumes about this company and its talented Hoosier employees,” Pence said in his announcement. “As CSP grows its operations here in Indiana, Hoosiers can rest assured that this administration will continue to pursue the kinds of policies that make our state a destination for investment and growth.”

But instead of adding jobs, CSP recently notified Indiana workforce officials of a “temporary” mass layoff of 164 workers at its Huntington plant after one of its customers planned to be idle, according to local news accounts. The layoffs are to start July 31.

Pence’s announcement did not mention that his friend, Rick Scott, owned a substantial stake in CSP, or that Florida First Lady Ann Scott had an additional large investment through the Connecticut-based investment firm G. Scott Capital Partners.

Before he became governor, Scott headed Naples-based Richard L. Scott Investments. His firm and CSP management bought the company together. “We acquired CSP in early 2005 with the belief that there was an opportunity to build a great company,” Scott said in a statement published in 2006 in Automotive News.

After he became governor, the mega-wealthy Scott put his assets – including CSP – into a Florida blind trust that put his assets under the control of an allegedly independent trustee and gave him legal immunity from conflicts of interest his diverse investments might pose. The arrangement is problematic, however, because the chief executive of the trustee, Hollow Brook Wealth Management, is longtime Scott crony Alan Bazaar.

As governor, Scott has disclosed his financial interest in CSP on several occasions, most recently in 2014 when he shuttered his first Florida approved blind trust and opened a second one while qualifying for re-election. He valued his shares in the CSP investment partnership then to be worth $43.9 million. The value of the First Lady’s CSP investment, via G. Scott Capital Partners, was not disclosed. In March 2016, CSP said in court papers that most of its stock was privately held by G. Scott Capital.

CSP sold

On Jan. 3 of this year, CSP was sold for $825 million to a subsidiary of Teijin Ltd. Florida Bulldog reported in June that Gov. Scott appears to personally have pocketed $200 million in the deal.

When CSP’s sale was announced, the Japanese conglomerate further identified RLSI-CSP Capital Partners LLC – Rick Scott’s partnership entity – as owning two thirds of CSP’s common stock. The governor owned 37 percent of RLSI-CSP Capital Partners.

Gov. Scott has declined to be interviewed about CSP, and his spokespersons have said that because his investments are in a blind trust he “has no knowledge of anything that is bought, sold or changed in the trust.”

Gov. Rick Scott at May 17, 2016 groundbreaking ceremony for United Technologies’ Center for Intelligent Buildings in Palm Beach Gardens. As part of the deal to bring the project to Florida, Scott approved $4.9 million in tax incentives for Carrier, a United Technologies subsidiary.

Vice President Pence was involved in a similar, but larger incentives package that attracted national attention last November when he and President Trump announced a deal with Carrier to keep its gas furnace plant in Indiana. The company was going to move the plant and about 800 manufacturing jobs to Mexico – a job export plan Trump used during the campaign – but changed its mind after talks with Trump and Indiana’s pledge of $7 million in tax breaks over a decade.

While some Republicans – notably former Alaska Gov. Sarah Palin – label such taxpayer-funded incentives “special interest crony capitalism,” they are the centerpiece of Gov. Scott’s plan to create jobs in Florida.

Interestingly, Scott, like Pence, spearheaded a large cash incentives deal for Carrier. That $4.9 million agreement via the Governor’s Quick Action Closing Fund involved development of United Technologies’ showcase “Center for Intelligent Buildings” in Palm Beach Gardens. The deal with Carrier, a subsidiary of United Technologies, was inked in June 2015, but needed local approvals that didn’t come for months. Gov. Scott attended a groundbreaking ceremony for the project on May 17, 2016.

New York boots Armor Correctional; In Florida, Armor boss named to powerful commission

By Dan Christensen, FloridaBulldog.org 

Dr. Jose Armas, owner and president of Armor Correctional Health Services, right, and Gov. Rick Scott

The company that provides health-care services to thousands of jail inmates across Florida, including Broward and Palm Beach counties, has been kicked out of New York for allegedly “placing inmates’ health in jeopardy.”

Armor Correctional Health Services paid $350,000 in penalties and agreed not to bid on or enter into any contract to provide jail health services in New York state for three years, settling formal charges brought in July 2016 by New York Attorney General Eric T. Schneiderman. The lawsuit was filed after a dozen inmates died since Armor was hired, including five found to have received inadequate medical care, Schneiderman’s office said.

“For-profit jail providers must ensure that appropriate medical care is provided in jails, where many inmates suffer from complex medical needs,” Schneiderman said when the settlement was announced in October. “This settlement sends a clear message that companies who fail to provide the required health services to inmates won’t be tolerated in New York State.” Armor Correctional provided comprehensive medical services to the Nassau County Correctional Center.

Five months later, however, Florida Gov. Rick Scott appointed Armor Correctional founder and president Dr. Jose “Pepe” Armas to a coveted seat on the powerful Constitution Revision Commission that will recommend changes next year to the Florida Constitution.

Armas and companies he controls have contributed nearly $300,000 to Scott’s election campaigns, his Let’s Get to Work political committees and to the Republican Party of Florida.

“Armas is a distinguished physician and healthcare executive whose focus on patient-centered care has defined his career,” Gov. Scott’s office said in announcing his appointment to the commission in March.

New York Attorney General Eric Schneiderman

A spokeswoman for Armas at Miami’s EvClay Public Relations sought to downplay Armor Correctional’s New York troubles, saying the company had made a “business decision” to pull out of New York three years before the settlement. Similarly, she described Armas as “solely” an investor in Armor and “not involved in its daily operations.”

Florida corporate records, however, have for years listed Armas as Armor’s president. And the company’s federal income tax returns from 2009 through 2013 state that Armas owned 100 percent of Armor. They also show that in 2012-2013 Armor paid Armas $9.6 million in dividends.

What happened in New York wasn’t the first time an Armas-led company has been in trouble.

In 2013, Armas’s MCCI Group Holdings LLC paid $1.6 million to the U.S. Department of Justice to settle a whistleblower lawsuit under the False Claims Act alleging that MCCI had violated the federal Anti-Kickback Statute and the Anti-Inducement Act. MCCI denied the allegations, but also paid another $300,000 in attorney fees to the whistleblower’s attorney.

“MCCI reached a settlement to avoid the delay, inconveniences and expense of litigation,” said Armas spokeswoman Melisa Chantres.

At the time, MCCI owned and operated medical clinics in Miami-Dade and contracted with Humana, which was also named in the qui tam suit, to provide care, including prescription drugs, to Medicare and Medicaid beneficiaries.

The complaint, filed in federal court in Miami, did not allege any wrongdoing by Armas himself, but contended that MCCI broke the law “by providing to its current and potential Medicare beneficiaries free services and gifts, such as transportation, meals, beauty and salon services, massages and entertainment,” according to the settlement agreement. The illegal activities allegedly took place between 2000 and 2012.

Scott’s Medicare fraud case

Long before Scott became governor in 2011, he was the founder and CEO of health-care titan Columbia/HCA and at the center of a much larger Medicare fraud case. Scott quit Columbia/HCA amid an FBI probe in 1997, and the company he built later paid a record $1.7 billion in criminal and civil fines.

MCCI was named in another South Florida whistleblower case filed by Dr. Mario M. Baez in 2012 and made public last year. Baez accused MCCI, Humana and several Palm Beach County physicians of “upcoding,” a fraudulent billing scheme in which health-care providers charge Medicare, Medicaid and other insurance payers for more expensive services than were performed.

Last month, the U.S. formally intervened in the case to recover damages against only one of those defendants, Dr. Isaac Kojo Anakwah Thompson, and not against MCCI. Assistant U.S. Attorney Mark Lavine did not explain in court papers why the government declined to intervene against MCCI or Humana. Thompson, Baez’s former partner, was sentenced to 46 months’ imprisonment in July 2016 after pleading guilty to health-care fraud.

Baez could have filed an amended False Claims Act complaint to proceed against MCCI in the name of the United States, but did not do so. MCCI spokeswoman Chantres said the company was never served legal notice of the lawsuit and called Baez “a complete stranger to MCCI.”

Fort Lauderdale attorneys Christina Currie and Greg Lauer

In Broward, Armas’ Armor Correctional, its doctors and Broward Sheriff Scott Israel are defendants in a federal civil rights lawsuit in the death of William Herring Jr., 22, a mentally ill inmate who starved to death in December 2012 while allegedly being deprived of treatment.

The lawsuit filed last December by Fort Lauderdale attorneys Greg Lauer and Christina Currie notes that Armor was being paid $25 million a year by the sheriff’s office to provide comprehensive health care to county inmates.

“However instead of holding true to its promise Armor chose to maximize profits. Armor knew that the result of putting profits before patients would be that some inmates with serious medical conditions would not get the care that they were entitled to,” the lawsuit says.

The complaint goes on to identify five other Broward inmates who it says died “slow, horrible and preventable deaths in the same jail” from 2011-2012 because of Armor’s decision to maximize profits. The five are identified as: William Campbell, arrested for DUI; Gary Joseph Smith, arrested for possession of cocaine; Calvin Goldsmith, arrested for trespassing; Raleigh Priester, arrested for throwing a rock at a city employee; Arthur Sacco, arrested for an unspecified misdemeanor.

Broward Public Defender Howard Finkelstein’s office represents many inmates under Armor’s care. He said what he’s observed about Armor is disturbing.

“If you have a family member who is in jail and their life depends on Armor for medical treatment, you’re in trouble,” Finkelstein said. “The name of the game with Armor is to withhold treatment until the inmate is released, sent to prison and it becomes someone else’s treatment, or dies.”

Chantres said Armor does not comment on pending legal matters, but noted the company “strives to deliver excellent patient care daily.”

Using ethics loophole, Sen. Lauren Book votes to give her nonprofit $1.5 million

By Francisco Alvarado, FloridaBulldog.org 

Sen. Lauren Book’s page on Florida Senate web site.

Broward State Sen. Lauren Book voted “yes” last month to approve a state appropriations bill that included $1.5 million for Lauren’s Kids, the nonprofit she founded and leads as its $135,000-a-year chief executive officer.

A gaping loophole in Florida Senate ethics rules allowed Book to cast her vote despite her apparent conflict of interest. The same loophole also meant she didn’t have to disclose her conflict publicly.

Senators are forbidden by ethics rules from voting “on any matter” in which they or an immediate family member would privately gain – except when it comes to votes on the annual General Appropriations Act. Abstaining senators must also disclose the nature of their interest in the matter, according to the 335-page Florida Senate Rules and Manual.

“Legislators are allowed to vote on issues that may benefit their profession,” said Ben Wilcox, research director for the nonpartisan watchdog Integrity Florida. “But it becomes questionable when it is a direct appropriation to an entity that a legislator controls and that would directly benefit that legislator.”

Lauren’s Kids, whose chairman is prominent lobbyist Ron Book, the senator’s father, has in a just few years become one of the Florida Legislature’s most favored private charities. Since 2012, Lauren’s Kids has bagged more than $10 million in taxpayer-funded handouts.

Gov. Rick Scott went along with the latest $1.5 million appropriation for Lauren’s Kids while approving Florida’s $83 billion 2017-18 budget earlier this month.

How that appropriation came to be is a story itself. Lauren’s Kids only asked for $1 million.

Where did extra $500,000 come from?

But more than six weeks after the Florida legislative session ended, nobody is answering questions about how Lauren’s Kids snagged that additional $500,000. Not Sen. Book. Not Ron Book. Not Sen. Bill Montford, the Tallahassee Democrat who sits on the education appropriations subcommittee and sponsored a funding request for $1 million on the nonprofit’s behalf on Feb. 22. And not Rep. Jeanette Nunez, R-Kendall, who sponsored the bill in the House. Each did not respond to detailed requests for comment.

Sen. Bill Montford, D-Tallahassee and Rep. Jeannette Nunez sponsored funding requests for Lauren’s Kids in the state Senate and House

Lauren’s Kids spokeswoman Claire VanSusteren, however, provided a written statement on June 12 summarizing how Lauren’s Kids intends to use the funds and defending the organization’s mission to increase reporting of child sexabuse incidents.

“There is no investment greater than in our children’s safety, and research shows that school-based education is an extremely effective vehicle for prevention and early intervention,” the statement read. “Lauren’s Kids is proud to partner with Florida educators to help arm students with knowledge about personal safety and accessing help.”

VanSusteren did not respond to a follow-up list of questions emailed on June 15 that again requested an explanation of how Lauren’s Kids’ funding request got bumped up from $1 million to $1.5 million between April 27 and May 8. That’s when House and Senate members went into conference committees to hash out the final budget bill. Sen. Book was a conferee for the appropriations conference committee on health care and human services. Montford was a conferee on the committee for education.

Wilcox said Sen. Book should be forthcoming about the additional $500,000 Lauren’s Kids received. “At the very least, she should be as transparent as possible on how that funding was decided,” he said. “It already doesn’t look good to the public given it is a dicey relationship for her in the first place as a sitting legislator who is also a recipient of taxpayer dollars.”

Lauren Book, 32, is a freshman legislator from Plantation. She assumed office just seven months ago after running unopposed and has quickly ascended the state’s political ranks. She is the Democratic Leader Pro Tempore and chairwoman of the Senate environmental preservation and conservation committee. She also sits on the appropriations, health policy and rules committees. Her father’s clients contributed significantly to her campaign and political action committee.

In March, Sen. Book told Florida Bulldog she was advised by Senate counsel “that it is proper that I do not abstain on these matters unless the funding directly inures to my benefit, which it will not.” Sen. Book, who was sexually abused by her nanny in her early teens, said she resigned from the board of directors of the foundation that raises money for Lauren’s Kids and that her salary was restructured to “ensure that no public dollars were used to compensate me for my work.”

At the time, Sen. Book said the Florida Department of Education requested that the Legislature provide $1 million in funding for Lauren’s Kids to continue its “Safer, Smarter” curriculum, a program that teaches students, teachers and parents how to spot signs of child sex abuse and the importance of reporting sex crimes against children.

Lobbyist Ron Book, the senator’s father. Photo from the documentary “Untouchable” by David Feige

The curriculum is made available to children at all grade levels in public and charter schools in all 67 Florida counties, but school districts are not required to teach it. For instance, Indian River County Public Schools and Orange County Public Schools do not use the “Safer, Smarter” curriculum, according to spokespersons for both districts. Miami-Dade Public Schools, the largest school district in the state, uses “Safer, Smarter” at only 80 out of 392 schools, said spokesman John Schuster.

“The curriculum is implemented as classroom guidance lessons facilitated by the school counselor or school social worker,” Schuster said. “The counseling professionals choose the classes where the students will receive the curriculum.”

Data lacking on curriculum results

Schuster said Miami-Dade Public Schools does not track or have any data confirming that the “Safer, Smarter” curriculum has resulted in the reporting of child sex-abuse incidents that would otherwise go undetected. “These reports are made directly to the Department of Children and Families and are anonymous,” he said. “We have no access to this reporting information.”

In VanSusteren’s June 12 statement, she defended Lauren’s Kids work by citing an unverified and questionable  2015 poll the organization commissioned that concluded one in three girls and one in five boys will be victims of sexual abuse by the time they graduate 12th grade. By applying those statistics to the overall public schools student population in Florida, there are “at least 540,000 child victims currently enrolled Florida’s K-12 schools,” the statement read.

VanSusteren insisted 95 percent of child sex abuse is preventable through education and awareness, and that the “Safer, Smarter” curriculum works. “Students who receive education about personal safety and accessing help in unsafe situations are three times more likely to speak up if they are being harmed,” VanSusteren said. “The funds allocated to Lauren’s Kids during fiscal year 2017-2018 will be used to continue our work to bring life-saving resources to Florida classrooms – as recommended in the Department of Education budget, as well as the Governor’s budget.”

However, the Florida Department of Education did not make the funding request for the curriculum, said department press secretary Audrey Walden. She explained the Legislature and the governor must first approve the funding and the department then disperses the funds to Lauren’s Kids and other nonprofit groups that get state money. Organizations must apply to the department and provide a breakdown on how the funds will be spent.

In its March 31 application, Lauren’s Kids stated it would spend $800,000 to print and distribute educational materials and maintain two websites associated with the “Safer, Smarter” curriculum; $100,000 to produce a digital conference; and two separate $50,000 expenditures for an evaluation survey, online training modules for teachers and principals and an educational fair.

“Please note that the department does not require schools to use the curriculum referenced,” Walden said. “It is implemented in schools at the discretion of each school district.”

According to an online legislative database used to track the Lauren’s Kids appropriation, Sen. Montford sponsored a $1 million funding request the same day that Kelly Mallette, governmental affairs director for Ronald L. Book P.A., lobbied the subcommittee on behalf of Lauren’s Kids and three other nonprofits the firm represents.

Montford, who is also the chief executive of the Florida Association of District School Superintendents, has sponsored previous funding requests for Lauren’s Kids. He sits on the appropriations, health policy and rules committees alongside Sen. Book.

According to Montford’s 2016 campaign finance reports, Ron Book, his wife Patricia and his law firm each gave $1,000 to the senator’s re-election effort. Ronald L. Book P.A. also contributed $2,500 in 2014 to a now-defunct political action committee chaired by Montford.

On the House side, the re-election campaign of Rep. Nunez, who sponsored a $1 million funding bill on behalf of Lauren’s Kids, also got $1,000 contributions from Ron Book, his wife and his law firm. Montford and Nunez did not respond to four messages left with their legislative assistants the week of the June 5-9 special session.

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.”

With help from investor-Gov. Scott, Sabal Trail natural gas pipeline looks to open in June

By Joseph A. Mann Jr., FloridaBulldog.org 

A protest in January against the Sabal Trail natural gas pipeline in Suwanee River State Park, Live Oak. Photo: WCTV CBS Tallahassee

The Sabal Trail natural gas pipeline, a giant interstate project whose tail reaches over 268 miles into Florida, has generated fierce opposition as its construction moves through the state from Georgia to its end-point in Osceola County, where it is scheduled to link up to an existing gas pipeline in June.

Starting late last year, hundreds of protestors picketed construction sites in northern and central Florida. Some of them handcuffed themselves to machinery, confronted police, set up a camp and organized sit-ins and meetings along the route, which passes through 12 Florida counties. A lawsuit also was filed by a non-profit to halt the project, but the action was denied.

The $3.2-billion project, called Sabal Trail Transmission LLC, is a joint venture among Houston-based Spectra Energy Partners, a major owner of pipelines and storage facilities that is now part of Enbridge Inc., a Canadian energy firm; NextEra Energy (parent of Florida Power & Light) and Duke Energy. FPL and Duke plan to use Sabal Trail’s natural gas to generate electricity in their Florida power plants.

Construction on Florida’s third major gas pipeline, which will run about 516 miles through Alabama, Georgia and Florida when completed, began in September 2016. The line also has two gas compression plants, one at each end, and plans to build three more by 2021.

Opponents – including environmentalists, residents and landowners along the route – warn of environmental harm. For example, they say that drinking water sources and surface water bodies are being damaged by problems like leakage of diesel fuel on land and in water around construction sites, spills of drilling mud used when running the line under the Suwannee River, the appearance of sinkholes near building sites, which could foreshadow damage to karst limestone bedrock in the region, and damage to wetlands and other parts of the countryside as crews clear a 75- to 100-foot swath to lay the underground pipeline.

Complaints also come from landowners whose property was split to accommodate part the pipeline route and from people worried about the long-term safety of the line, which carries large volumes of flammable natural gas under extremely high pressure.

Moreover, some opponents question whether the utilities building this pipeline will actually need the new volumes of natural gas for Florida, and say they may be planning to liquefy and export gas at a later date.

Sabal Trail pipeline route

“The construction of a natural gas transportation corridor threatens the state’s vulnerable fresh water supply and will leave Florida citizens having to deal with this forever,” Merrilee Malwitz-Jipson, an organizer for the Sierra Club in northern Florida told the Florida Bulldog. Projects like this will make Floridians dependent on fossil fuel for many decades “when its citizens continually vote for solar energy and renewables,” she said. “We’re not alone. This is happening all over the country.”

Sierra Club volunteers watching construction work proceed have seen heavy equipment tipped over in wetlands, leaking fuel, a lack of appropriate fencing for wildlife and drainage of some bodies of water along the pipeline route, she added. “The pipeline is impacting 700 bodies of water between here and Alabama, and we don’t know if they are being restored.”

Broad media attention

While not receiving national attention like protests over the Dakota Access oil pipeline or the Keystone XL, Sabal Trail has become a cause célèbre, receiving broad media attention, particularly in northern Florida.

More than a dozen protesters have been arrested and later released at different locations. In an incident apparently unrelated to the peaceful protests, a 66-year-old man was shot and killed by police after he used a rifle to shoot at the pipeline and equipment in Marion County and then fled the scene, according to media reports. Police are still investigating the case, but pipeline opponents said that they rejected violent acts and that the individual was not part of their movement.

Gov. Rick Scott also is a factor in the Sabal Trail story. The governor actively supported the project, signing two bills in 2013 that helped speed up the extended approval process.

Gov. Rick Scott

In 2014, Florida Bulldog reported exclusively that the governor owned a stake in one of the pipeline partners, Spectra Energy, and that he apparently still owns shares in the company through a blind trust. Florida ethics rules generally ban government officials from owning stock in companies subject to their regulation, or in companies that do business with state agencies. Scott also has holdings in other pipeline companies that produce or transport natural gas, some with Florida operations, the Bulldog reported.

In subsequent reporting, the Bulldog asked the governor’s office about potential conflicts of interest, but was told there are no conflicts since Gov. Scott has no knowledge of the current investments held in the blind trust, which is administered by third parties.

“Florida is swarming with protests, like an antbed stirred up by a 600-mile pipeline stick,” John A. Quarterman, president of WWALS Watershed Coalition and a key pipeline opponent, said in a recent interview. The coalition is the WATERKEEPER affiliate for the Suwannee River and its tributaries.

“I was the first to call for protests against the pipeline in 2014, and we’ve seen a big swell of support since the middle of last year,” said Quarterman, whose non-profit organization works for water conservation.

Hoping to derail the pipeline, WWALS filed a petition against Sabal Trail and the Florida Department of Environmental Protection, seeking an administrative hearing. WWALS said that the pipeline poses a threat to native wildlife and that drilling in karst limestone along the pipeline would cause sinkholes. It also said that Gov. Rick Scott has a conflict of interest, since he has investments in Spectra Energy, part of Sabal Trail joint venture. This legal challenge was turned down.

In an interview, Quarterman also said that Florida utilities will not need the new volumes of natural gas to be provided by Sabal Trail, and suggested that they instead plan to liquefy and export a major share of future gas deliveries.

Pipeline needed?

“There is no need for this pipeline, and the approximately $3 billion being used would provide a lot of solar power for the Sunshine State,” he said.

In defense of the natural gas transmission project, Andrea Grover, a spokeswoman at Spectra Energy, pointed out the following:

  • Before construction work began, she said, the company successfully went through an extensive permitting process, obtaining approval from a variety federal and state entities, including the Federal Energy Regulatory Commission, the U.S. Army Corps of Engineers, the Florida Department of Environmental Protection and others. The need for new natural gas supplies in Florida and an additional pipeline were demonstrated in the planning, permitting and approval process.
  • Karst conditions exist in south-central George and northern Florida, the company spokeswoman said, and much larger infrastructure projects – highways, railroads, urban development have been built in these areas already.
  • Sabal Trail uses best practices for its construction work, and its safety programs often exceed regulatory requirements.
  • After completion, the pipeline will be monitored around the clock according to state and federal safety regulations.
  • According to outside analysts, Sabal Trail is having a significant economic impact on Alabama, Georgia and Florida. This includes the creation of more than 5,600 construction jobs, over $207 million paid to construction workers and about $1 billion spent directly and indirectly on construction activities. Once completed, the pipeline and compression plants will have more than 500 permanent jobs and will provide new tax revenues for local governments. In Florida, the pipeline is expected to create more than 2,700 jobs during construction, and 288 permanent jobs after completion. Aside from construction wages, tens of millions of dollars are being spent in Florida for items like trucking, security, fuel, gravel, equipment rentals, meals and lodging, as well as other supplies and services.
  • Pipeline representatives held public outreach meeting with landowners, community members and public officials. “Some stakeholders did raise concerns,” Grover said. “These have been vetted and addressed by Sabal Trail or federal and state agencies. No one had to be required to permanently relocate during construction.”

Asked if protests had significantly delayed construction, Grover said that the current in-service date (June 2017) was changed from May 2017 due to normal internal decision-making, planning (which began around 2013) and permit applications.

However, one section of Sabal’s website said that original in-service date would be March 2017.

Construction is still underway in several of the Florida counties in the pipeline’s path, and over 81 percent of the pipe is in the ground. The pipeline is installed in a type of “assembly line” process. Construction crews first clear an area up to 100 feet wide, grade the land, dig a ditch for the pipeline, string pipe sections together, weld and then lower the pipe into the ditch, which is filled in. The work area is then cleaned up and vegetation is restored.

“Following pipeline installation,” Grover said, “all disturbed areas will be returned as close as possible to their original contours. Temporary [construction] workspace will be allowed to return to its original state. The entire work area will be restored in compliance with all applicable federal, state and local permits.

“As part of our commitment, we want to establish a positive footprint in the communities along the pipeline route where [permanent] Sabal Trail representatives will live and work.” This means donations and community efforts from pipeline employees over the long run.

“By bolstering community vitality, Sabal Trail is supporting the communities where we will be working and operating for many years to come,’’ Grover said. “Sabal Trail operators and their families are part of these communities too.”

Report: Taxpayer-supported Broward Health engaged in ‘cultural civil war’

By Dan Christensen, FloridaBulldog.org bhcompliance2

The law firm that’s overseeing taxpayer-supported Broward Health’s compliance with conditions imposed by the U.S. last year when it paid $70 million to resolve alleged lawbreaking has concluded the troubled hospital district is in a state of “cultural civil war.”

Baker Donelson was hired in December to serve as the “Independent Review Organization” (IRO) under the terms of a five-year Corporate Integrity Agreement between the North Broward Hospital District (NBHD) – Broward Health’s legal name – and the U.S. Department of Health and Human Services.

The IRO’s 137-page annual report, obtained by Florida Bulldog using Florida’s Public Records Law, lays out what it says are Broward Health’s “numerous systems deficiencies” while also defending itself from anonymous, yet widely distributed accusations that it was not truly independent and was hired thanks to insider connections.

The report, often citing unnamed sources, is highly critical of Broward Health’s recently departed Chief Compliance Officer Donna Lewis for refusing to produce, among other things, requested information about employee complaints. Also singled out for criticism: Broward Health’s Interim CEO Pauline Grant and Chief Information Officer Doris Peek, who, along with Lewis, are accused of planting “negative articles regarding the IRO in the local media.”

Former Broward Health Chief Compliance Officer Donna Lewis

Former Broward Health Chief Compliance Officer Donna Lewis

Grant and Peek both denied the accusation on Sunday. “I never planted any negative articles,” said Grant. Lewis could not be reached for comment.

The report and its exhibits can be downloaded here.

“There has been a pervasive pattern of personal destruction in which former and some current members of the senior management team use public meetings, the media, self-serving reports disguised as work product, and frivolous ‘anonymous’ complaints through the disclosure program as a means to falsely attack the character of, pressure, or aid in the termination of NBHD’s Board of Commissioners, senior management, and others,” the report says. “In other situations, it appears the methods are used to enhance the influence of senior management’s departmental fiefdoms.”

The report goes on to assert that management actions “appear to be routinely based upon self-interest, protection of position and department, not for the betterment of the system.” That “lack of professionalism” fails “not only the patients the system services, but the taxpayers who help fund it.”

Anticipating the report’s release, Broward Health’s board voted last week to authorize management to request up to 60 days to respond to the IRO report which will be sent to a federal monitor and could lead to further government action against Broward Health.

A new CEO coming soon

Who will author the response is unclear. The board recently has interviewed several candidates to become Broward Health’s permanent President/CEO. A meeting to make that selection is set for Oct. 31.

Broward Health, with four hospitals, three outpatient facilities and nearly 9,000 employees all north of Griffin Road, is the ninth-largest public health system in the country. It is a special taxing district overseen by a board of commissioners appointed by the governor.

The report says Broward Health suffers from “operational mismanagement” to include “considerable understaffing” in key areas such as physician services and the compliance and ethics office. Likewise, the report notes, two seats on the governing board of commissioners remain vacant. (On Friday, Gov. Rick Scott appointed Parkland’s Bev Capasso, a former chief executive officer of Jackson Memorial Hospital, to one of those seats.)

The report traces Broward Health’s “cultural war” to the hospital district’s “pervasive physician-centric tradition, in which senior management and staff instinctively defer to physicians, particularly regarding compensation.”

Broward Health Interim CEO Pauline Grant

Broward Health Interim CEO Pauline Grant

Allegedly illegal pay deals between Broward Health and its physicians was the focus of the False Claims Act lawsuit brought by whistleblower Dr. Michael Reilly that led to the $70 million settlement in September 2015. Allegedly violated in the scheme: the Stark Law, which generally prohibits physicians from referring patients to hospitals with whom they have a financial relationship, and the Anti-Kickback Statute, which prohibits paying physicians for healthcare referrals.

Without naming names, the report says some physicians are involved in “repetitive upcoding,” or assigning improper billing codes for medical procedures to increase their Medicare and Medicaid reimbursements. Baker Donelson says it has “encouraged” Broward Health to hire “expert coders” to handle coding for it doctors “to help remove even the appearance of a conflict of interest in coding.”

The report is similarly critical of Broward Health’s “ineffective response to the implementation” of compliance monitoring and auditing procedures, notably the lack of what’s known as a “Focus Arrangements” database that can track government-reimbursed physician referrals and sales.

‘Lack of commitment to compliance’

Baker Donelson’s report, prepared under the direction of attorney J. Scott Newton, accuses Broward Health of a “lack of commitment to compliance” both before and after the embarrassing federal investigation and costly settlement. It says problems began after Lewis was hired as chief compliance officer in April 2011.

One month later, a federal subpoena announced the start of the government’s fraud probe. It sought a multitude of records about physician contracts and other matters, yet appears to have had no “impact whatsoever on the operation or effectiveness of the compliance program,” according to the report.

The report’s litany of deficiencies, however, neglects to note that Broward Health’s compliance troubles pre-date Lewis’ arrival. For example, for more than a decade both management and the board ignored a lobbyist registration policy adopted in 2004. The district finally implemented a policy requiring lobbyists to register last month as a result of a Florida Bulldog story in May.

Baker Donelson’s report praises the “outstanding work” of Broward Health’s controversial General Counsel Lynn Barrett and her Legal Department in making important changes to the district’s poorly crafted compliance program by re-writing its Code of Conduct and ethics policies. The problem: the implementation of those measures was “seriously deficient in many critically high risk areas,” the report says.

The report, however, makes no mention of various controversies that have swirled around Barrett. They include allegations Barrett improperly attempted to block the public from meetings, steered millions of dollars in legal work to law firms with strong ties to Gov. Scott, and failed to cooperate with the FBI during an ongoing federal grand jury investigation into allegedly corrupt purchasing practices at Broward Health.

The report also details Baker Donelson’s annoyance at an article published in Medicare Compliance Review that “impugned the IRO’s qualifications.” The report suggests Interim CEO Grant, Compliance Chief Lewis and Chief Information Officer Peek planted the story.

A newsletter’s upsetting story

The story apparently at issue was published in June by a newsletter with a different name, Report on Medicare Compliance. Among other things, the story quoted Donna Lewis as criticizing the board’s efforts to identify the author of the anonymous email that raised questions about Baker Donelson’s independence and other matters. She told the newsletter that anonymous allegations are “routine” compliance matters and that the board’s high-profile hunt for the author had “eroded” trust.

“I have never seen a compliance complaint take up so much time from a governing body,” she said.

At a subsequent meeting by Baker Donelson with top Broward Health management, “it was emphatically noted to Grant that what appeared to be senior management-placed negative articles regarding the IRO in the local media would not deter our work. We advised Grant that we did not believe any articles or public comments were made without her authorization.”

The report adds that anonymous employees had told the law firm that Grant, Lewis and Peek “were overheard in Peek’s office discussing” what later became the article.

“Contacting the media, particularly because of the Florida Sunshine law, appears to be used as a common weapon in the cultural war at NBHD as a means of asserting false allegations and/or pressure on those who would refuse to change the culture of corruption,” the report says.

“Here, while it is certainly beyond the scope of our review, the IRO questions whether tax dollars were used to publish the ‘Medicare Compliance Review’ article and if so, if that constitutes an improper misuse of public funds. We will leave that determination for state officials, should they undertake a review.”

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