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Chiles family to fight state over raiding fund

TALLAHASSEE — In stark and angry terms, the family of former Gov. Lawton Chiles is threatening to sue Gov. Charlie Crist and legislative leaders if they try to balance the budget by raiding the Lawton Chiles Endowment Fund for children and seniors.

"Depleting the Endowment that invests in the present and future success of our children is an affront to all Floridians," Bud Chiles, son of the former Democratic governor, wrote in a Friday letter to the lawmakers.

"It is unconscionable that the state is willing to put children's lives and health on the line by destroying one of the only reliable funding sources available," Chiles wrote, ending the letter with a clear threat: "If the state chooses to raid the fund, we are fully prepared to seek full relief in the courts."

The letter was addressed to Crist, House Speaker Ray Sansom and Senate President Jeff Atwater, all Republicans. Sansom's and Atwater's offices say they're reviewing the letter.

"We have received Mr. Chiles III's letter regarding the Lawton Chiles Endowment and the Governor appreciates his thoughts," Crist's office said in a written statement.

"Gov. Crist is currently reviewing all options to balance Florida's budget during these challenging economic times."

The letter adds an unexpectedly personal edge to Florida's budget crisis and Crist's role managing it. Next Friday is the 10th anniversary of the death of Chiles, an iconic figure known as Walkin' Lawton.

Right now, the budget has a $2.1-billion hole. To fill the hole and avoid raising taxes, Crist and legislators are eying dwindling savings accounts and trust funds, including the Chiles Endowment, which has lost nearly half its $2.1-billion value since June.

"They need to show leadership and think of other revenue sources, not just raiding savings," Bud Chiles told the Herald/Times. He said he favors an additional $1-a-pack cigarette tax.

Chiles said that if Crist and the Legislature gut the endowment, the family will ask that Lawton Chiles' name be removed.

"This is not what my father stood for," said Chiles, 55, a real estate investor and president of the Lawton Chiles Foundation, a nonprofit that advocates for children.

Operating as an annuity, the endowment uses money from interest earned from investments to help poor kids and senior citizens. It was enshrined in law as a "perpetual source of enhanced funding'' — the grounds for a possible lawsuit if the state empties the fund.

Gov. Chiles' successor, Gov. Jeb Bush, established the endowment in 1999 using about 10 percent of a $11.3-billion lawsuit settlement with tobacco companies that Chiles had pushed through.

Last spring, as the state's budget crisis worsened, Crist realized he needed help from the Chiles family. He called Chiles' 78-year-old widow, Rhea Chiles, to ask her if she would support an effort to allow him and the Legislature to borrow from the endowment to cover future budget gaps.

The catch: The state must pay the money back. At the time, the fund was worth $2.1-billion.

Mrs. Chiles agreed to support the loan. But she then rebuffed a Crist request this June to honor her at the governor's mansion, saying in a June 11 letter to Crist that he presented an "intolerable prospect'' of cutting more health and human services.

"When, in two years, this loan is fully repaid to the Fund, I will be greatly relieved and most happy to celebrate with you," Rhea Chiles wrote Crist.

Legislators in September gave Crist the authority to divert $354-million from the fund. Since then, the value of the fund shrunk as the stock market tanked. It now has $1.2-billion available.

The state's chief investment analyst, Ash Williams, and Chief Financial Officer Alex Sink — the only Democrat on the state Cabinet — have said the state would be shortsighted if it cashed out its investments in the Chiles fund at the bottom of the market.

Bud Chiles said that talk in Tallahassee has now shifted from repaying the endowment to raiding it more, and that the family could no longer stay quiet.

"Fool me once, shame on you. Fool me twice, shame on me," Chiles said. "That's the reason for the tone of this letter. We're trying to send a message: We're real serious."

Chiles family to fight state over raiding fund 12/05/08 [Last modified: Monday, December 8, 2008 11:41am]
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