By Dan Christensen, FloridaBulldog.org
To little notice last week, the Legislature voted unanimously to repeal Florida’s failed blind trust law – a short-lived statute best known for allowing Republican Rick Scott to shield tens of millions of dollars of his assets from public view, while also immunizing him from numerous conflicts of interest as governor.
The ultra-wealthy Scott, now Florida’s junior U.S. senator, was made a gift of the measure as part of a “comprehensive ethics reform” bill overwhelmingly approved by the Legislature in 2013 and “gladly” signed into law by Scott a short time later. Until new Secretary of Agriculture and Consumer Services Nikki Fried, a Democrat, established a “qualified” blind trust last January, Scott was the only statewide official to benefit from Florida Statute 112.31425.
Voting to discard the blind trust, without acknowledging mistake or malfeasance, were many of the same senators who sponsored and voted for it six years ago. They include Republicans Tom Lee of Brandon, Rob Bradley of Orange Park, Jeff Brandes of St. Petersburg, David Simmons of Longwood, Wilton Simpson of Spring Hill, Kelli Stargel of Lakeland and Lizbeth Benacquisto of Fort Myers. Democrats include Minority Leader Audrey Gibson of Jacksonville, Bill Montford of Tallahassee and Oscar Braynon II of Miami Gardens.
Why did they and everyone else in the House and Senate want to scrub Florida’s blind trust law from the books?
Neither the Senate’s nor the House’s written analyses of the repeal bill offers a reason. Likewise, Scott’s name and examples of his conflicting financial interests are nowhere to be found there.
Yet at a brief April 10 hearing before the Senate Rules Committee Sen. Lee, the bill’s sponsor, offered a reason. Noting that qualified blind trusts “typically” are used to obscure wealth and investments from public view, Lee declared that everyone, “regardless of their level of wealth… should have to comply with the same set of rules as everyone else does.”
‘You can learn a lot…’
“You can learn a lot about an individual by where they make a living and how they invest their money,” said Lee. “And these disclosures are fundamental to our responsibilities as elected officials and that no one should be allowed to be exempt from them.”
Lee did not explain why it took him six years to reach that conclusion – after Scott was no longer eligible to benefit from Florida’s blind trust law.
Lee did not respond to requests for comment.
Republican Gov. Ron DeSantis will soon decide whether to sign or veto the bill. Given its huge margin of support, the decision should be easy.
Scott established a blind trust and placed his enormous portfolio of stocks, bonds, partnerships and other financial assets into it a few months after taking office in 2011. His protection from conflicts of interest between his official duties and his private financial interests kicked in two years later when he signed the blind trust bill. Scott stopped using a blind trust when he went to Washington, where federal rules regarding blind trusts are significantly stricter than in Florida.
The idea behind a blind trust is to eliminate any appearance of a conflict by “blinding” a public official – and by extension the public – to the nature of the holdings. If the official doesn’t know he owns shares in a natural gas pipeline company, for example, he can’t be faulted for taking action that benefits the pipeline company.
But Florida’s blind trust law omitted a dozen federal safeguards intended to assure true blindness, most importantly conditions requiring the trustee to be truly independent. In Scott’s case, the trustee was a company run by Alan Lee Bazaar – who had worked for Scott for more than a decade at his firm, Richard L. Scott Investments.
The failure of the blind trust became apparent in March 2014 when Florida Bulldog reported how Scott and his wife, Ann, had over the preceding 15 months made more than $17 million selling hundreds of thousands of shares of Argan, a publicly traded company whose Gemma Power Systems did business in Florida.
The sale of Argan shares held in the blind trust quickly became a matter of public record. Scott owned so many shares that he was required to publicly report the sales to the U.S. Securities and Exchange Commission. Scott’s spokesperson at the time said the governor had no knowledge of those sales, yet it was Scott himself who filed the electronic paperwork with the SEC.
There are numerous other examples of ostensibly blind financial interests that later blew up on Scott. Among the most notable were his hidden stake in Spectra Energy, builder of the Sabal Trail pipeline in North Florida that Scott and his appointees backed, and his investment in the hedge fund that owned 21st Century Oncology, to which the governor’s appointees at Broward Health awarded an unprecedented 25-year contract to provide radiation oncology services in 2012.
Scott’s largest blind trust investment, however, involved the 2017 sale of Michigan-based Continental Structural Plastics to the Japanese conglomerate Teijin as part of an $825 million deal. The windfall for Scott’s blind trust: $203 million.