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Rick Scott's IRS records show lower tax rate and higher income in 2009 on global investments

TALLAHASSEE — Rick Scott blames President Barack Obama for the nation's economic woes, but Florida's Republican nominee for governor is doing far better now than he did in the last year of George W. Bush's presidency.

That's according to Scott's last three years of tax returns, released Friday night.

The records portray a man who, like more and more out-of-work Floridians, earns no wages. But unlike most of the state's 1 million unemployed, Scott earns millions from a long list of investments.

His adjusted gross income in 2009 was $7.87 million, more than double what he made in 2008 during Bush's last year in office. Not only did his income grow under Obama, but he also paid less in federal taxes — 13 percent — than he did the previous year when Uncle Sam took 16 percent. His best year was 2007, near the height of the stock market, when his adjusted income was more than $13 million, of which he paid 15 percent in federal taxes.

But his campaign said appearances can be deceiving, and most of the apparent profits during Obama's first year in office were the result of profits earned from investments in start-up companies that he had made years ago.

"He's not afraid to take calculated risks. That's what he does. He's an entrepreneur," Scott spokesman Brian Burgess said.

But it's unclear what all those specific start-up companies are, or what their profits were. Scott's campaign blacked out some of the information. He earns a profit from investments in various companies and from funds managed by Morgan Stanley, Fidelity and Merrill Lynch.

One company name on the tax returns stands out: Solantic, a Jacksonville-based chain of walk-in clinics that has gained a level of notoriety on the campaign trail. Six days before running for governor, Scott gave a deposition in a lawsuit filed against the company. He won't release the sealed court document, saying it's a "private business matter." That has left him open to political attacks.

Reading the 412 pages of tax records covering a three-year slice of Scott's financial life, the scope of his portfolio is striking, ranging from local Tampa Bay Water bonds to China's giant Yanzhou Coal Mining Co., described by Hoover's Company Records as the producer of 35 million tons per year to fuel China's industrialization.

In 2007, Scott invested about $200,000 in Halliburton, a controversial oil exploration and defense contractor, but reported a $2,082 loss when he sold the stock a year later.

Scott also appears to have significant investments in foreign companies, including a trust in Bermuda. And he has invested in the media, with gain and loss records showing holdings in Gannett Co., Clear Channel and the New York Times Co.

With investments from Walmart to Sara Lee, he reports interests in a stunning array of products and businesses — including Home Depot, Philip Morris, Dow Chemical, Boeing, Starbucks and Avon Products.

Then there's the horse. Records show that his Strategy Racing Stable owns a 3-year-old named Awesome Encore, which raced recently against a horse named Fast Alex, who came from behind to win.

How Scott fared before 2007 is unclear. His campaign declined to release any prior tax returns. His campaign said it released tax returns only for the period of time that his Democratic opponent, Alex Sink, has been Florida's elected chief financial officer.

The documents Scott did release came after repeated calls from Sink and primary challenger Bill McCollum, who demanded Scott release the tax returns in June.

Like Scott, Sink is independently wealthy. Last month, she released the previous five years of returns for her and her husband, Bill McBride. A banking executive who retired in 2000, Sink's income during the five-year period hit a low of $274,538 in 2009 and reached a high of $780,598 in 2007.

She is paid an annual salary of $111,456 as the state chief financial officer and receives income from interest and dividends on assets in her undisclosed portfolio. Unlike Scott, she keeps all of her personal assets in a blind trust managed by a third-party investment firm. But the existence of her multimillion dollar portfolio has left her open to charges that she might benefit from her votes on the state's investment board.

Scott's tax returns show how he aggressively uses deductions and exemptions to keep his taxes low. For example, in 2009 Scott earned a total of $12 million, but he paid only about $1 million in taxes.

Every year he claimed a deduction from the losses from his wife's interior design business, which lost $885 in 2009.

Scott also deducted charitable donations such as one in 2007, a $999 desk given to Liberty Youth Ranch in Naples. Two years later, he gave a "mahogany armoire with gold trim" valued at $806 to the group.

But his biggest charitable deduction for a tax break in 2009 totaled more than $1 million and went to a group called Conservatives for Patients Rights, his tax-exempt political committee that fought Obama's federal health care overhaul.

Known as CPR, the committee helped spark the conservative tea party movement. Its nationwide TV ads raised Scott's profile, and its public relations machine formed the backbone of his campaign staff.

"What Rick Scott has done is to put himself first, and it's not surprising that we're seeing this in his tax return," Sink spokeswoman Kyra Jennings said.

But Scott can't deduct his biggest expense: his largely self-funded race. Polls show that his millions have helped put him neck and neck with Sink.

After writing a $2.4 million check to his campaign on Sept. 27, Scott's investment in his campaign is nearly $55 million.

Times researcher John Martin and staff writer Lee Logan contributed to this report.

Rick Scott's IRS records show lower tax rate and higher income in 2009 on global investments 10/08/10 [Last modified: Saturday, October 9, 2010 12:42am]
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