Audit questions $2.4M government grant to Tampa lawmaker

James Grant jokes with his mother, Beverley Grant, right, and his campaign manager, Jennifer Lux, while they interact with voters during Grant’s campaign in 2010.

Times (2010)

James Grant jokes with his mother, Beverley Grant, right, and his campaign manager, Jennifer Lux, while they interact with voters during Grant’s campaign in 2010.

TALLAHASSEE — Jamie Grant was two years out of law school and a freshman member of the state House when he made a bold claim.

His startup company could design a mobile application that would link medical, insurance and legal records for family and first responders. Sales would net $26 million by 2014, Grant said.

He just needed $2.5 million in seed money.

The pitch worked. The Hardee County Industrial Development Authority approved the deal in September 2011 and, by the next month, Grant got his first check.

Now, 18 months later, it's not clear what happened to the money. It's all spent, but state auditors say there's no product, few jobs and no economic growth. Grant would not discuss specific aspects of the deal with the Times/Herald.

" 'What happened to the money?' That's the main question," said Ted Sauerbeck, Florida's deputy auditor general. "At this point, we don't know."

• • •

It was an unusual pairing from the start. Grant is a cocksure 30-year-old Stetson Law School grad who followed his dad, a longtime state senator, to the Legislature. Hardee County is about 90 minutes from Grant's Tampa home, a rural outpost where nearly a third of its 28,000 residents live below the poverty level.

Economic development doesn't come easy for Hardee. Walmart is the leading employer. Two phosphate companies, Mosaic and C.F. Industries, own or mine about a third of the county. The land left behind is a slurry of soil pitted with artificial lakes brimming with milky water, making development difficult. With few development prospects, officials worry about future growth.

The tool the county picked for economic development was the Industrial Development Authority. In exchange for the mining rights to nearly 11,000 acres, Mosaic agreed in 2008 to pay Hardee County $42 million over 10 years. One of the first big chunks was to be awarded by the IDA board in 2011.

On Sept. 2, an unnamed outfit out of Tampa applied for $2.5 million. Its contact person was also its CEO: James W. Grant.

The company that Grant headed didn't exist yet. LifeSync Technologies was formally incorporated a few weeks later, but Grant already had a name for the product: Blue Water.

Subscribers would access sensitive records via a smartphone and carry a blue card that could be swiped to manage data or provide information to medical professionals. Grant projected that by 2014, he would have 400,000 subscribers across the country, $26 million in profits, and perhaps most importantly for Hardee, lots of jobs to offer.

Among those Grant listed as part of the LifeSync Technologies management team: Rep. Jason Brodeur, R-Sanford, and Jennifer Lux, a political consultant who managed Grant's 2010 campaign.

Not listed was Joe Albritton, a Hardee County insurance agent and IDA board member. His brother, Rep. Ben Albritton, R-Wauchula, serves in the Legislature with Grant and Brodeur.

When the IDA voted to award the money to Grant on Sept. 22, 2011, Joe Albritton abstained from voting. Minutes of the meeting said he abstained because he had a small ownership in the company.

The IDA ended up awarding Grant's company $2.4 million in October 2011, paid out over nine months.

But as Hardee County residents waited to see results from the investment, some had grown suspicious.

"There were no numbers, no nothing," said Henry Kuhlman, a UPS employee who moved to Hardee in 2010 and has been following the deal. "The product was supposed to be in the testing phase in January 2012, but there wasn't anything to test. There's still no product."

• • •

On Sept. 10, 2012, nearly a year after he got the award, Grant sold the rights to Blue Water and the remainder of the grant to another company called Continuum Labs, which is owned by Travis Bond — who was also listed on LifeSync's management team. In exchange, LifeSync got 1.25 million shares in Continuum Labs. Corporate records filed with the state show that Continuum Labs and LifeSync share the same Wesley Chapel address.

By the time of the sale, Kuhlman and others, including a local city commissioner and a Hardee county commissioner, had lodged complaints that sparked separate investigations. The State Attorney's Office in Bartow opened a criminal investigation. It closed it in October concluding there was no evidence of criminal misconduct.

But a second investigation by state auditors raised red flags. According to their report, concerns included:

• The Hardee IDA awarded the money to Grant's company even though it didn't exist at the time of the application, violating state law.

• Although the agreement stated Grant's company would develop a product to be marketed and supported by Hardee personnel, there was no evidence the company delivered.

• There was no oversight of the money. Disbursements weren't supported by detailed invoices or other documentation.

The chair of the state legislative auditing committee said he is alarmed by the audit.

"The fact that there are lawmakers involved is obviously a great concern," said Sen. Joe Abruzzo, D-Wellington. "I am watching diligently to see if there will be any action by law enforcement."

In an initial interview, Grant told the Times/Herald the deal was created with private money because it came from Mosaic. "It's no different than me getting a loan at the bank," Grant said.

That's not true, according to Sauerbeck, the state auditor. Money that passes through government agencies is public money.

Grant told the Times/Herald he earned $70,000 as part of the deal, with Brodeur getting between $48,000 to $65,000. He said that more than 80 percent of the money was spent paying people to write computer code for Blue Water, or on quality assurance or marketing.

Grant initially said he would open his books and show how the money was spent but did not. He also failed to answer more specific questions about the arrangement and fate of Blue Water. Brodeur, too, did not respond to questions.

"My sincere hope is that everyone trying to continue cultivating economic development in one of Florida's poorest counties can continue building on the successes that are happening and do so free of the distractions caused by the continuous efforts of disingenuous detractors," Grant said Friday in a written statement.

According to financial disclosures filed with the state, Grant's net worth in the last two years climbed from barely over $1,000 to more than $100,000.

Times staff researcher Carolyn Edds contributed to this story.

Audit questions $2.4M government grant to Tampa lawmaker 03/29/13 [Last modified: Friday, March 29, 2013 11:35pm]

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