In May, an aide to former Florida Gov. Reubin Askew, James Apthorp, filed suit against the state alleging that a new “blind trust” law passed in 2013 violated the state constitution by allowing public officials to conceal their private investment holdings.
A dozen media organizations, including The Associated Press and the Florida Society of News Editors, joined the suit.
The law was supposedly created for the right reason: to prevent elected officials from profiting from official acts.
Blind trusts are supposed to ensure that the trust’s owner does not know and cannot direct where the money goes. But it appears Florida’s law has enough holes to look like Swiss cheese.
So far, according to the Florida Commission on Ethics, the only elected official taking advantage of the blind trust law is Gov. Rick Scott.
Thanks to reporting by the nonprofit investigative news website Broward Bulldog, led by veteran South Florida journalist Dan Christensen, it’s clear that Scott’s blind trust wasn’t entirely blind. But it was blessed by the ethics commission, a majority of whose board is appointed by Florida’s governor.
Christensen found that Scott’s trust was managed by a firm run by a longtime Scott family associate, Alan Lee Bazaar, now chief executive officer of Hollow Brook Wealth Management. Bazaar was with Naples-based Richard L. Scott Investments for more than a decade before.
Christensen found that some of Scott’s blind trust holdings were so large that they triggered reporting requirements of the U.S. Securities and Exchange Commission, making them openly viewable by the public — and not blind.
A number of the companies handled natural gas and did business in Florida. The companies are directly regulated by the Florida Public Service Commission, whose members are appointed by the governor and approved by the state Senate.
One asset, SEC documents showed, had quadrupled in value over 15 months, earning the Scotts more than $17 million, Christensen found. The investment was in a company called Argan Inc., whose subsidiary, Gemma Power Systems, does business in Florida. Another, Christensen found, was in a company building a natural gas pipeline through Florida, Spectra Energy, owned in part by Florida Power & Light Co.
“Gov. Scott signed legislation last year to speed up permitting for the (pipeline) project, and his appointees on the Public Service Commission approved it last October,” Christensen noted.
In June, Scott closed his first blind trust, made his investments public, and challenged Democratic gubernatorial opponent Charlie Crist to do the same with both his and his wife’s tax returns. Scott then opened a new blind trust. Meanwhile, Crist has made his tax returns available, but not disclosed his wife’s assets, saying that was her wish.
Explaining his move, Scott said in a June 16 statement: “For the purposes of qualifying as a candidate for re-election, I have disclosed my financial assets today. However, before that and immediately after filing, these assets were under the management of an independent financial professional in a blind trust in order to avoid even the appearance of a conflict of interest.”
Scott’s staff said the governor has had no knowledge of his blind trust’s investments.
The Sunshine Amendment to Florida’s Constitution, Article II, Section 8(a), states:
“All elected constitutional officers and candidates for such offices … shall file full and public disclosure of their financial interests.”
Even so, a lower court has sided with the state, and found that Florida’s blind trust law is “reasonable.”
Apthorp and the media companies have appealed, and asked the Florida Supreme Court to consider whether blind trusts violate Florida’s Sunshine Amendment.