The Underbelly of Enterprise Florida Exposed

May 29, 2016 by

The curtain has been pulled back on Enterprise Florida and it isn’t a pretty picture.

Is it because the public-private partnership model doesn’t allow enough transparency or accountability in how hundreds of millions of tax dollars are spent? Or is it because of the actions of Enterprise Florida’s CEO, Bill Johnson? It seems to be a combination of the two.

Enterprise Florida, Inc. (EFI) is the principal economic development organization for the state. The state replaced the Commerce Department with this partnership between business and government leaders, with equal funding coming from public tax revenue and private investment.

It turns out very little money actually comes from the private sector. Tax dollars account for 91 percent of last year’s $25.3 million operating budget, with only $1.8 million from private donations.

The corporate appointees on the 64-member board are a who’s who of the business elite and politically connected. Each is required to contribute $50,000 for the coveted spot on the powerful EFI board.

EFI has spent hundreds of millions of tax dollars through various programs. One incentive program—the quick-action closing fund—receives the lion’s share of the funding and is the one Gov. Rick Scott relies on to highlight his job creation efforts.

Is there a good rate of return on the tens of millions of tax dollars spent? It’s hard to tell. Many of its activities—including deals receiving millions in public funds—are shielded from public records laws, at least for some period of time.

One indication that the program is not meeting its goals is Gov. Scott’s attempt to lower the required return on investment criteria.

The Florida Legislature expressed concern that EFI was holding on to $140 million of unspent funding that couldn’t be used for other, more immediate needs.

Gov. Scott requested $85 million for his incentive fund in 2015—but the Legislature gave him $43 million. This past session, Scott asked the Legislature for $250 million. Usually the Legislature funds Scott’s quick-action closing fund at some amount, but this year they gave him nothing.

In 2015 Gov. Scott selected Bill Johnson, the former director at the Port of Miami, to serve as the CEO of Enterprise Florida. During his brief tenure, Johnson managed to ruffle a lot of legislative feathers—particularly in the Florida Senate. He urged his influential board to actively lobby legislators and publicly suggested EFI should go out of existence if it didn’t get the full $85 million in incentive funding.

After receiving zero incentive funding this past session, Johnson announced that he would be leaving EFI on June 24. It’s looking more and more like he was pushed out.

Despite having one foot out the door, Johnson has gone on two international trips since announcing his departure—a nine-day trade mission to South Korea and Taiwan in April and a three-day export trade mission to Mexico in May.

A two-month agency review found EFI was top-heavy with management, spends too much on office space, needs to rein in travel expenses and lacks internal controls, thereby making it ripe for fraud.

Johnson’s lavish spending on dinners, hotels and renovations for his Miami offices was previously exposed, along with his aggressive tone in dealings with the Legislature. But he had other lapses in judgment.

Thanks to investigative reporting by the Naples Daily News, we know Johnson hired his former Port of Miami spokeswoman, Paula Musto, for part-time consulting and speechwriting at a cost—so far—of $158,000. He circumvented EFI policy requiring contracts for more than $100,000 to go before the board by offering Musto two contracts—for $68,750 and $75,000—and one extension for $99,999.

He also bypassed the competitive bid process by claiming the contracts fell under certain exemptions.

During the heat of the funding battle, Johnson had this to say: “That’s nowhere near enough to entice businesses to come to the Sunshine State.”

Here’s an idea: Let’s entice businesses with our weather, our natural resources, and our quality of life. We already have one of the lowest tax burdens in the nation.

Instead of corporate handouts, let’s invest the money in our infrastructure and in education and training for a ready workforce. That would not only entice businesses to move to our state, it would improve the quality of life for all those who live here and pay taxes.

Johnson was well compensated at EFI with an annual salary of $265,000, a bonus of $50,000, a monthly car allowance of $600 and a generous travel allowance. And he’s leaving with a generous parting gift—a severance package of $132,500.

Who’s looking out for the taxpayers?

Paula Dockery is a syndicated columnist who served in the Florida Legislature for 16 years as a Republican from Lakeland. She can be reached at PBDockery@gmail.com.



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