Monday, December 11, 2017
Business

Old habits: State spending sprees that demand better oversight

True or false: Enterprise Florida economic development officials spent the following sums, largely taxpayer money, at these locations to woo businesses to the Sunshine State:

1. $22,000 on New York Yankees luxury suites and related purchases.

2. $13,000 at the San Diego Zoo.

3. $16,000 on Texas Rangers and Atlanta Braves baseball.

4. $7,800 at Truluck's Seafood Steak & Crab House (home of the $48 prime New York strip) in Austin, Texas, the 21 Club (home of the $75 fixed price dinner) in Manhattan, and 4 Rivers Smokehouse in Orlando.

Each example is "true." They are part of a much larger list recently made public that details some of the millions the state's public-private agency spends — on everything from entertainment and consulting firms to FedEx deliveries, parking fees and pest control. All of it, says Enterprise Florida, is done in the name of recruiting jobs and businesses to this state in the past two years.

The spending disclosures, first aired by CBS12 TV in West Palm Beach, are fresh fodder behind escalating criticism that Enterprise Florida officials are engaged in "lavish" spending, including some $30,000 a month on unspecified items, that appears excessive. Especially when it remains unclear what the state is getting for such spending when it comes to the number of actual jobs recruited to the state.

That very message is being relayed by watchdog groups to state representatives now that the annual legislative session is under way in Tallahassee.

"Enterprise Florida has a tough challenge to convince lawmakers that their spending of the public's money is generating a return on investment," states Dan Krassner. As head of the nonpartisan government watchdog group Integrity Florida, he remains a stubborn and vocal advocate for stronger accountability.

"Our expectation is that there will be increased focus from lawmakers on ensuring dollars go towards effective programs and move away from those that do not work," he says.

Escalating the feud was last fall's decision by the Enterprise Florida board to give agency CEO Gray Swoope a new contract that allows him to make up to $375,000 in salary and bonuses. That's a 25 percent increase over what he made then. And it comes on top of Swoope getting an annual $70,000 bonus in each of the past two years.

If this tale of high-end spending and big raises by a state government entity sounds familiar, it should.

Top officials at Citizens Property Insurance — Florida's state-run "insurer of last resort" — got their knuckles rapped last year after reports in the Tampa Bay Times revealed opulent spending on well-heeled meetings, fancy meals and elite hotel stays.

One 24-hour trip by Citizens CEO Barry Gilway from Jacksonville to Tampa cost more than $1,000 and included a dinner "meeting" for six at the posh Armani's restaurant in the Grand Hyatt that included "wine and spirits" along with veal shank, salmon and oysters.

Such examples at Citizens were not isolated. In the spring of 2012, Citizens spent nearly $28,000 for two days of meetings at a Tampa hotel. Before the fall of 2012, then-Citizens chief financial officer Sharon Binnun routinely stayed in New York City hotels costing $350 a night and up. That's in addition to a $35,000 tour Binnun took through four different countries, complete with stays in four-star hotels that included one in Bermuda costing more than $600 a night. (Binnun resigned last summer.)

Eerily like the big raise and bonuses delivered last fall to Enterprise Florida's chief, Citizens earlier had awarded big raises to senior executives.

Binnun received a $31,000 boost in pay, hiking her salary 14 percent to $255,000. Other top officials also got pay increases of more than $25,000 in late 2012, big bumps Citizens at the time justified due to "increased responsibility" and the need for pay "parity" with the private market.

Oh yeah, Citizens raised its insurance rates on policyholders at the same time these raises were doled out.

So far, the backlash against lush spending at Enterprise Florida and Citizens Property has proved very different.

Once quick to defend Citizens' spending ways, Gilway was publicly chastised by Florida Gov. Rick Scott, subjected to a state inspector general review and clearly embarrassed in public hearings. His past bravado is now muted.

In a recent visit with the Tampa Bay Times editorial board, Gilway said his agency has transformed dramatically over the past year. Once focused on fending off accusations of high executive expenses and loose oversight, Gilway said those concerns are all in the past.

And what of the spending follies of Enterprise Florida?

Unlike his earlier response to Citizens behavior, Scott continues to praise his job recruiting agency's track record and deflect calls for tighter spending controls. As governor, Scott happens to be the chairman of Enterprise Florida.

Recently, Enterprise Florida issued a three-page press release "setting the record straight" on its spending. Part of the release is dry regulatory history. And part of it defends itself against claims of lavish spending. Its tone hints that critics just don't "get" the high-stakes and expensive game of competing for the attention of site selection experts and corporate executives routinely wined, dined and entertained by dozens of states scrapping for the limited supply of new jobs and business expansions.

"To be successful in economic development, Enterprise Florida must build and maintain strong relationships with site selection professionals across the country," the release states.

Enterprise Florida is also feeling its oats because it is attracting more jobs and companies to the state in recent times than it did a few years ago. In 2013, the agency counted 152 recruitment/expansion projects and $2.1 billion in capital investment, up from 124 projects and $900 million in investment in 2010.

That translates to 21,742 new jobs "contracted" (committed to but not yet here) last year, a big gain over 11,398 new jobs contracted in 2010.

The message? Enterprise Florida is not Citizens Property. And unless or until Gov. Scott or state legislators fuss that pricey parties at venues like Yankee Stadium or Cowboys Stadium or the 21 Club are over the top … Get out of the way.

We're happy to step aside. But first fix one thing. Make sure Florida taxpayers know all that posh entertaining is worth it. Make sure it yields real — not just promised — jobs.

Many deals subsidized with taxpayer money commit to create jobs years into the future. Start to finish, Enterprise Florida must be crystal clear in telling us who did or did not deliver on their promises.

Information from Times staff writer Jeff Harrington and Times files was used in this column. Robert Trigaux can be reached at [email protected]

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