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CONNECT just the latest problem at Scott's prized economic development agency

TALLAHASSEE — Thousands of Floridians await jobless benefits of up to $275 a week that they need to survive and U.S. Sen. Bill Nelson calls the state's claims system "a mess."

But as bad as the $63 million online site has been for those whose claims have been delayed for weeks, and in some cases months, CONNECT is only the latest example of the barriers blocking Florida's unemployed from collecting benefits.

"The computer issue is focusing attention on the system, but it isn't the biggest problem," said Karen Woodall, executive director of the Florida Center for Fiscal Economic Policy, a Tallahassee nonprofit research group. "The problem is our system."

Florida officials announced last week that the state will issue temporary payments of benefits for claims that have been on hold for longer than a week.

But Gov. Rick Scott still hasn't explained when he expects CONNECT to work properly or how much the repairs will cost. And neither he nor his administrators have taken responsibility for what went wrong, shifting the blame instead to the project's contractor, Deloitte Consulting.

CONNECT is managed by the Department of Economic Opportunity, which was created in 2011 after Scott pushed lawmakers to lump three downsized agencies — the Office of Tourism, Trade and Economic Development, the Agency for Workforce Innovation and the Department of Community Affairs — into one. The move also included the public-private partnership Enterprise Florida that would promote economic development.

Though the new agency seems like a grab bag of disjointed parts, Scott pegged it as the hallmark of his administration.

It consists of four divisions: strategic business development, community planning and development, workforce services, and finance and administration. Each has a single-minded focus on development, business and jobs.

Scott sold the idea of his ambitious new agency to his tea party base by slashing costs. The three previous agencies had a total of 1,819 employees. The new DEO had 1,613. A June 2011 news release from Scott's office touted the DEO as a way to "streamline government, eliminate wasteful inefficiencies and grow Florida's economy."

Dwelling on the DEO's focus on job creation, the news release didn't mention a prime function the department had inherited from the defunct Agency for Workforce Innovation: an unemployment compensation program that processed 3 million claims a year for about 1.1 million people.

But as the new online system has struggled, unemployed workers such as Jeffrey Atkinson have increasingly felt forgotten.

"I have seen nothing and have been waiting since Oct. 27," said Atkinson of his frustration with CONNECT. "Are they actually going to be helping us, or are they waiting for us to fall under?"

• • •

Even though Scott vowed that the DEO would represent efficient and streamlined government, it has seen plenty of turmoil, allegations of waste and turnover, and it has burned through five executive directors since 2011.

His initial choice to lead the agency was a retired Marine Corps officer who talked a tough game on luring companies to Florida.

"I would maintain that we are at war," Doug Darling told a Senate committee in 2011. "We're at war with other states. We're at war with other countries."

As far as the unemployed, Darling said, Scott wanted to rethink their compensation in ways that would make them more self-reliant.

"The governor firmly believes that we need to disincentivize people not to go to work," Darling said. "So we're going to propose (in 2012) to rebrand unemployment compensation to 're-employment' assistance."

But the changes in how the state addressed the unemployed went beyond words. In 2011, Scott supported and signed legislation requiring recipients to take a 45-question skills test and prove every week that they've sought work from five employers. That's more than in any other state. The law also cuts the number of weeks people are eligible for unemployment assistance and makes it easier for the state to deny benefits for "misconduct." It also requires recipients to file claims online.

"It would shut hundreds of thousands out of the system," said Rich Templin, the legislative and political director for the Florida AFL-CIO. "That was the point."

At the same time the DEO was making it harder for the unemployed to get benefits, critics asked whether the DEO was too lax in managing what it paid corporations in tax incentives.

In October 2011 it was widely reported that the state's tax incentive programs created only one out of every three jobs promised. A subsequent inspector general's audit found that the state's antiquated system for tracking incentives was rife with errors and that a requirement that those companies receiving incentives have their records inspected every two years wasn't being followed.

Darling told the Times/Herald that some of the cash incentives had been "egregious," and he wanted to take action against businesses not complying.

In January 2012, Darling abruptly quit after a disagreement with Steve MacNamara, who was then Scott's chief of staff. His replacement, Hunting Deutsch, quit the $140,000 job after it was revealed by the Florida Current that he collected unemployment benefits for 91 weeks over a two-year period from 2009-2011 — when he was traveling in Europe with his wife.

"I think it was bad form for him to seek unemployment while he was off on a trip to Europe," Senate President Don Gaetz said.

Early last year, Scott tapped his general counsel, a 32-year-old Harvard Law graduate and former student body president at Duke University, to take over the agency. Though Jesse Panuccio's management experience was limited, his conservative credentials were without question.

In 2010, he was an attorney for supporters of Proposition 8, California's same-sex marriage ban. As Scott's interim general counsel, he litigated the governor's controversial proposal to drug test welfare recipients.

By the time Panuccio had taken over, Florida's online registration system for claims was under attack. In April, the U.S. Department of Labor, which pays for Florida's unemployment program, threatened to terminate its funding after determining the state was discriminating against the disabled and those with language challenges by requiring them to file claims online. The DEO objected, asking congressional leaders to investigate federal officials for "potential politicization" that violated Florida's authority.

Amid this legal tussle, which is not resolved, the CONNECT project floundered. The website was initially supposed to launch in November 2012, but delays from its contractor, Deloitte, had pushed it back. Unhappy with these delays and cost overruns, the DEO threatened to terminate Deloitte's contract in June 2012. But the contractor consented to some changes.

Still, the website didn't debut until Oct. 15, 2013, and Deloitte is now getting paid $45 million — $5 million more than agreed upon in the initial contract.

In the weeks since the launch, and the complaints about its shortcomings, Panuccio has stopped blaming the media and shifted blame to Deloitte. Nobody with Scott's administration has taken responsibility for CONNECT's failures.

When asked to comment about the website, Scott consistently shifts the subject back to jobs — and away from the unemployed.

"Gov. Scott has full confidence in director Panuccio's leadership of DEO," said spokesman John Tupps. "While it is essential to provide the unemployed with the benefits they deserve, Gov. Scott is focused on growing the economy and continuing to drive down the state's unemployment rate — now at 6.2 percent — so that every Floridian who wants a job can find one."

Michael Van Sickler can be reached at (850) 224-7263 or

CONNECT just the latest problem at Scott's prized economic development agency 01/24/14 [Last modified: Saturday, January 25, 2014 7:49pm]
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