Wednesday, August 15, 2018
Politics

Florida Cabinet supports Rick Scott, approves investment prohibitions on Venezuela

TALLAHASSEE — Rick Scott and the Florida Cabinet unanimously voted Wednesday to continue to refrain from allowing state investment managers to use Florida funds to invest in companies controlled by the Nicolás Maduro regime or companies that violate federal law by doing business in Venezuela.

The state currently has no direct investment with the government of Venezuela and the proposal will continue that, but the resolution falls short of a plan initially pitched by Scott that would have required the state to divest its assets in companies that do business with the Maduro regime, including Goldman Sachs.

Instead, the mostly symbolic measure is designed to send a message to the emerging dictatorship that Florida will not sanction the regime's brutality.

"I stand firmly with the Venezuelan people," Scott said before the vote of the State Board of Administration, which includes the governor, the chief financial officer, and the attorney general, and is charged with oversight of the Florida Retirement System and its $150 billion in assets.

He said he may pursue legislation next session that pressures more companies to stop doing business in Venezuela, but "this was a great start."

Goldman Sachs' investment arm was criticized earlier this year when it purchased $2.8 billion in what were called "hunger bonds" from Maduro's state-owned oil company. The reference to the low-cost bonds was seen by critics as providing the Maduro regime an economic lifeline when the government's policies were causing a shortage of food and leading to malnutrition, unrest and violence.

Goldman responded that it bought the bonds for asset-management clients through a second-party broker, and didn't send the money directly to the government.

The Florida Retirement Fund holds $147 million in Goldman Sachs shares, $171 million in Goldman Sachs bonds and other financial instruments and pays the firm $1.9 million in yearly fees to manage some accounts.

Scott, who is expected to run for U.S. Senate next year, has been courting South Florida voters in the last two months with tough talk on the Maduro government. He backed off his initial comments, made at a series of media events in Miami, after Goldman Sachs sent its head of its Investment Management Division, Tim O'Neill, and the firm's chief of staff, John Rogers, to meet with Scott, the other members of the Cabinet, and SBA Executive Director Ash Williams in mid-July.

They would like to introduce themselves to you, answer your questions, and share the story of the trade and what the firm will do for trades of this magnitude going forward," wrote Lisa Rotenberg, Goldman Sachs' asset managing director, in a July 13 email to Williams.

In July, state Sen. Jose Javier Rodriguez, D-Miami, proposed legislation, SB 70, which would add the Maduro dictatorship to Florida's existing divestment programs — Sudan and Iran — and force the state to sell its Goldman assets.

If the governor follows through and supports a similar proposal, Goldman Sachs and numerous other companies who derive revenue from Venezuela could lose Florida as an investor.

According to Enterprise Florida's annual report, at least three companies that derive revenues from Venezuela — General Electric, United Technologies International and Citibank — have collectively received more than $4.26 million in Florida incentive funds.

The governor did not say whether those companies will be part of his legislation.

"My focus today was on the SBA doing business with the Maduro regime but I'm going to continue to look at ways to make sure we don't support the Maduro regime," he told reporters.

"Companies that do business with the Venezuelan people, that's not our target. Our target is companies that do business with the Venezuelan regime," he said.

According to internal SBA correspondence obtained by the Times/Herald, divesting of all investments from Goldman Sachs and companies that do business in Venezuela could have a broad impact on the retirement fund.

"As you would expect, the list of companies with revenue exposure in Venezuela includes major consumer staple, auto, electronic and airlines companies as well as some oil, infrastructure and financial companies. The list is extensive so any prohibition on holding these companies would have a significant impact on returns," wrote Alison Romano, senior investment officer, in a July 7 email to other investment team members.

She also noted, however, that "many of the companies that had business in Venezuela have either shrunk those businesses or pulled out entirely."

Under the proposal approved Wednesday, the SBA will be prohibited from investing in any securities issued by the Venezuelan government; prohibited from doing business with any financial institution or U.S. company which directly, or through a subsidiary, violates federal law by making a loan, extending credit, or makes purchases with the government of Venezuela, and will be prohibited from taking a shareholder proxy vote that advocates or supports the Maduro regime.

"These guidelines will be in place to keep us in the posture we are in today," Williams told reporters Wednesday. He said they will have "zero" impact on any current investments.

Rodriguez said in a statement that he welcomed the SBA's "initial step" but urged them to "take stronger action in the face of the deepening crisis in Venezuela."

Contact Mary Ellen Klas at [email protected] Follow @MaryEllenKlas

Comments
Veteran Hernando politicians take oversized contributions, run afoul of campaign finance laws

Veteran Hernando politicians take oversized contributions, run afoul of campaign finance laws

BROOKSVILLE — With primary Election Day at the doorstep, two Republican candidates vying for seats on the Hernando County Commission found themselves in uncomfortable spots over potential filings with the Florida Commission on Ethics.And a third Repu...
Published: 08/15/18
Q&A: A Watergate trickster talks dirty politics, then and now

Q&A: A Watergate trickster talks dirty politics, then and now

CLEARWATERNearly half a century ago, Martin Kelly made the mistake of his life.He was a senior at the University of Miami when he decided to take part in what would become one of the most infamous political scandals in U.S. history: Watergate. He was...
Published: 08/15/18

Pasco Political Notebook for Aug. 17

Republican Club hosts candidate forum at meetingThe West Pasco Republican Club will host an "Election Extravaganza" candidate forum at its meeting Aug. 21 at Heritage Springs Country Club, 11345 Robert Trent Jones Parkway, Trinity. A social time will...
Published: 08/13/18
Updated: 08/15/18
Early voting in Pasco: Here’s what to remember when you head to the polls

Early voting in Pasco: Here’s what to remember when you head to the polls

Early voting Pasco County begins Saturday and runs through Aug. 25, with 11 locations across the county for voters.Polls are open from 9 a.m. to 5 p.m. Saturday and Sunday, from 10 a.m. to 6 p.m. Aug. 20-24, and from 9 a.m. to 5 p.m. on Saturday, Aug...
Published: 08/13/18
Largo election cancelled as incumbents stay with no opposition

Largo election cancelled as incumbents stay with no opposition

LARGO — There will be no suspense in the city when elections arrive Nov. 6. In fact, there will be no election at all, because all four city commissioners whose seats were up were re-elected by default when no one came forward by the end of the candi...
Published: 08/13/18
Florida candidate tried to prove she’s a college graduate. The school says her diploma is fake.

Florida candidate tried to prove she’s a college graduate. The school says her diploma is fake.

The political kerfuffle around Melissa Howard began when a news site reported that the Florida state House hopeful is not a college graduate, as she claims to be. To prove the story wrong, Howard, R, reportedly flew to her proclaimed alma mater, Ohio...
Published: 08/12/18
Romano: Two years later, politicians still ignoring Florida voters on medical marijuana

Romano: Two years later, politicians still ignoring Florida voters on medical marijuana

The war is over, except no one in Tallahassee has bothered to read the news.And so Florida continues its daft fight against medical marijuana. All of which means patients are being left behind, voters are getting ignored, and lawyers are buying fanci...
Published: 08/11/18
Hillsborough, tops in state for drug-addicted babies, will file suit against opioid makers

Hillsborough, tops in state for drug-addicted babies, will file suit against opioid makers

TAMPA — Hillsborough County plans to file a lawsuit next week against companies that manufacture opioid drugs, alleging that aggressive marketing of painkillers worsened the opioid crisis.The county joins a number of other local governments nationwid...
Published: 08/10/18
Ex-aide Omarosa says she refused hush money, pens White House memoir calling Trump racist

Ex-aide Omarosa says she refused hush money, pens White House memoir calling Trump racist

WASHINGTON — Omarosa Manigault Newman was offered a $15,000-a-month contract from President Donald Trump’s campaign to stay silent after being fired from her job as a White House aide by Chief of Staff John Kelly last December, according to a forthco...
Published: 08/10/18
Carlton: Sorry, Gov. Scott, but college students can early vote after all. Hey, USF, talking to you here...

Carlton: Sorry, Gov. Scott, but college students can early vote after all. Hey, USF, talking to you here...

Good news, at least for those of us who keep believing in that old-fashioned notion that voting should be open and accessible to everyone who’s qualified.Even if they’re, say, young voters. And even if certain politicians do not like the direction in...
Published: 08/10/18