Florida Politics: Corruption, Cronyism and Corporate Welfare

I was speaking to a veteran economic development director the other day.  Just shooting the breeze, really.

As we spoke, I took the opportunity to congratulate the success of places like Deland, New Smyrna Beach, and Flagler Beach – communities that have identified their unique assets and developed them to full potential.

That doesn’t happen by accident.

It takes visionary elected and appointed officials, supported by talented professionals with the skill to craft a Mainstreet Deland, Flagler Avenue or the look and feel of a quaint beach town.

During our chat, my friend lamented how many business interests relocating to Florida – or even transferring operations from one city to another – instinctively begin negotiations with a prospective community by asking how much “incentive” money is on the table.

Regardless of their longevity, or past track record, those doing business here are conditioned to expect lucrative tax breaks, redevelopment incentives, infrastructure improvements and actual cash infusions from government with little, if any, performance metrics or expectations.

Why shouldn’t they?

Florida has become the poster child for corporate welfare – and it’s becoming a bidding war between communities seeking to attract new businesses and the jobs they bring.

Let’s face it – once they’ve seen the piles of public money dumped in places like Tanger Outlets, One Daytona, or the increasingly rag-tag Oceanwalk Shoppes – wild horses couldn’t keep their hands out of our collective pocket.

Clearly, Economic Development professionals have an interesting job attracting business and industry to the mosaic of municipalities that make up Volusia County.

When done properly, a community’s economic development department will take a holistic approach – working with planners to carefully select, recruit and position businesses in a way that provides the company with the best opportunity for commercial success, while enhancing quality of life and building a distinctive civic brand.

In short, they carefully shape an environment where people and businesses want to be.

Under Florida’s current economic development strategy, local and state governments are quickly becoming community banks – offering huge sums of public money to private interests – and whenever you are playing fast-and-loose with other people’s money, the risk for favoritism and corruption is high.

Trust me.  I’ve worked with some of the best economic development types – and some of the worst.

Here on the Fun Coast, Volusia County and the City of Daytona Beach have set a high mark when it comes to pissing away our hard-earned tax dollars to satiate the personal wants and professional needs of entrenched power brokers and political insiders.

Always cloaked in the dubious guise of “economic incentives.”

There was a time when government assisted the development of a strong commercial tax base by identifying and reducing expensive permitting, onerous regulations, and promoting fair practices for the benefit of consumers.

Local, state and federal government ensured that the playing field was level –  then allowed the natural competition of the free market to work without unnatural stimuli.

It meant that only the best ideas survived, and that prices for goods and services were controlled by marketplace factors, such as quality of service and the law of supply and demand.

Look, I don’t have an MBA – I can barely balance a checkbook – but it doesn’t take a Harvard Business School graduate to understand that the artificial infusion of public funds, tax breaks and other government incentives (read: giveaways) to a well-connected few undermines the very foundation of fair trade.

In a recent piece by Jim Turner of the Florida News Service, we learned that Enterprise Florida – perhaps the most grotesque facilitator of corporate welfare in these United States – has hired a new Chief Operating Officer in former lawmaker, Chris Hart.

Hart’s appointment comes after former Enterprise Florida chief Bill Johnson quit after Governor “Slick Rick” Scott’s request for some $250 million in “economic development incentives” (our tax dollars) was soundly rejected during the 2016 legislative session.

rick-scott
Gov. Rick Scott

When the legislature gave their collective middle finger to the Governor’s corporate welfare scheme, some suspicious spending came to light.  That’s when Slick Rick – who serves as EFI’s chairman – commissioned an investigation of the agency’s operations and activities.

The final report determined that Wild Bill Johnson treated himself to expensive dinners, luxury hotel rooms and lavish renovations to his Miami office, among other atrocities.

In one instance, Johnson enjoyed a $359 seafood dinner with his assistant, Max Stuart, at a Tampa area restaurant.  He justified the credit card expenditure as “discussion of area politics and strategy.”

They could have done that over a $2.00 Happy Hour Bud Light.  My treat.

EFI responded that none of the over-the-top personal expenses accumulated by Johnson were paid for with “public funds.”

That claim was later proven to be utter bullshit.

In most places, Johnson would be idling away the hours in state prison.  But this is Florida, the “rules are different here.”

bill-johnson-2-jpg-20160325
Bill Johnson

Rather than being prosecuted for converting public funds to private use, Johnson was handed a $132,000 severance check after serving little more than one year in the position which paid $265,000 annually.

Initially, Enterprise Florida was designed to receive funding from both government sources and the private sector – but you know how that goes.  At the end of the day, some 90% of EFI’s incentive funds came from tax money.

Even then, a sizable portion of the few private dollars in the mix went to staff members and administrators in the form of lavish bonuses from something called, well, the “staff bonus pool.”

Hell, Johnson received a $50,000 spiff after just six months on the job.

All this on top of the $25 million the state of Florida kicks in to cover EFI’s operating expenses.

Look, I could write a book on the financial abuses and abject corruption at Enterprise Florida – but you get the drift.

During my working life, I witnessed a similar scenario play out with a former area City Manager, and career “economic development” shill, who never seemed to grasp that “spending money to make money” didn’t necessarily include extravagant dinners, complete with expensive scotch, at restaurants in Atlanta’s tony Buckhead neighborhood.

The point is – this disgusting misappropriation of public funds isn’t limited to state and federal government – and our current system clearly encourages the practice.

In my view, it’s time we demand an end to corporate welfare and cronyism, and allow the natural principles of fair and competitive trade to build a thriving, and sustainable, marketplace.

 

 

 

 

 

 

 

 

 

 

 

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