March 28 (Bloomberg) -- Months before Florida Crystals Corp. won a no-bid contract to farm sugar on state-owned land, its top lobbyist and president met with Governor Rick Scott in the home of King Juan Carlos of Spain.
They got access during a 2012 trade mission underwritten by corporations including the company, which is co-owner of the Domino Sugar brand. The trip, intended to recruit businesses to Florida, also provided a lobbying opportunity for those already in the state. After the meeting at the palace, Florida Crystals executives joined Scott at a reception they sponsored, featuring Spanish omelets and dry-cured ham.
Governors increasingly are using corporate money to fund their excursions, often from businesses that stand to benefit from state decisions. While taxpayers traditionally paid for trade missions, at least 15 states have started collecting donations to cover costs, including six since 2010. Scott, a 61-year-old Republican, has tapped the private money most often, making 10 overseas visits in the past three years, twice the pace of his predecessor, according to public records.
“It’s an opportunity that the vast majority of people and companies never get,” said Hayden Dempsey, a Tallahassee lobbyist and former aide to the governor who went on the Spain trip. Scott, he said, was “very accessible.”
In the months after, Scott approved a 30-year lease extension that Florida Crystals sought on 8,700 acres of state land. He also signed a bill helping the company limit payments to clean up pollution near its South Florida farms.
Jackie Schutz, a Scott spokeswoman, declined to respond to criticism of the trips or say whether Florida Crystals representatives talked to the governor during the trip about the cleanup costs or lease.
“The only goal of trade missions is to recruit businesses that will create jobs and hire Florida workers,” she said.
The lease was also approved by the state’s cabinet and legislature, said John Tupps, a Scott spokesman.
Florida Crystals President Jose “Pepe” Fanjul and lobbyist Gaston Cantens didn’t respond to requests for comment on the Spain trip left with Karen Zamani, who handles media calls for the company.
Florida Crystals is among more than 15 companies that have sponsored events on Scott’s overseas trips. The company paid for the reception, held at the home of the U.S. ambassador.
Corporate donations to Enterprise Florida, a public-private group that organizes the missions, are used for Scott’s expenses, according to the group. Travel bills for other officials are covered by taxpayer money.
Executives from Florida Crystals didn’t get special treatment for their $7,500 payment to sponsor the reception in Spain, said Nancy Blum-Heintz, spokeswoman for Enterprise Florida. Blum-Heintz confirmed the meeting with the king. Eduardo Palmer, a lawyer from Coral Gables who traveled to Spain, described the reception at the ambassador’s house.
The closely held sugar company has spent $16,500 to sponsor receptions during Florida trade missions and has donated more than $150,000 to Let’s Get to Work, a political committee that supports Scott’s re-election in November, records show.
Scott and other governors say the trade missions resulted in foreign investment and increased exports. After the Spain trip, Scott’s office said 465 jobs would be created in Miami-Dade County by companies based in that country. Scott’s office said in May that companies from Canada, England and Brazil opened or expanded operations in Florida after his trips.
State Senator Jeff Clemens, a Democrat whose district includes Florida Crystals’ West Palm Beach headquarters, said the governor’s trips allow corporate donors to get too much access.
“Taxpayers get nervous when you accept large gifts from corporations, and they have every right to know what the results of him accepting those gifts are,” Clemens said. “He gives the taxpayer the impression that he’s saving them money when what he’s really doing is performing government functions in the dark.”
There’s a correlation between trade missions and growing exports, though there’s no conclusive evidence that the trips are the cause, said Andrew Cassey, who teaches economics at Washington State University in Pullman and studied more than 500 governor-led missions between 1997 and 2006.
States have found willing donors, with companies that lobby government among the most generous, according to public records. The arrangements have allowed governors to fly business or first class, stay in five-star hotels and dine with dignitaries.
In Texas, donations from companies including Exxon Mobil Corp. and AT&T Inc. help cover expenses for Republican Governor Rick Perry. The sponsors, whose donations get them access to events with the governor, have funded Perry’s travel to more than 15 countries, according to TexasOne, a public-private partnership that collects the donations for the trips.
When California’s Jerry Brown, a Democrat, took his wife and eight staff members to China last year, dozens of private-sector participants paid $10,000 each to offset costs and cover their own expenses. At least seven lobbyists went along, according to state records. Business representatives had access to dinners and receptions with the governor.
Georgia’s Republican governor, Nathan Deal, held a private reception in Tokyo last year for representatives of companies that donated at least $7,500 to help underwrite his mission to China and Japan. About 40 participants traveled with Deal, including representatives from Coca-Cola Co., Delta Airlines Inc. and Johnson & Johnson, according to state records.
Spokeswomen for governors and economic development agencies in Texas, California and Georgia, which organize the trips, said the arrangements benefit the public by saving taxpayers money and creating jobs.
Other states collecting money for governors’ trips include New Jersey, Michigan, Massachusetts and Pennsylvania, according to public documents.
Florida started accepting corporate donations in 1994 to recruit businesses and encourage them to expand.
Thirteen years later, the state started using some of the funds to cover travels overseas. Charlie Crist, then a Republican, was the first governor to tap the money. Enterprise Florida has raised more than $21.6 million from donors in the past two decades, according to its records.
Scott may meet privately with business representatives who travel with him, said Blum-Heintz, the Enterprise Florida spokeswoman. Those meetings aren’t linked to whether companies help pay the bill, she said.
Enterprise Florida, which produced a solicitation offering donors recognition by Scott at events they host, has spent more than $320,000 in private money on the governor’s trips.
“This approach to funding makes the best use of our operational budget, and creates stronger partnerships between our sponsors and the small- and medium-sized businesses that benefit from the missions,” Blum-Heintz said in an e-mail.
At least eight lobbyists and 30 executives traveled with the governor to Spain in 2012 as part of a 70-member delegation.
The Florida Crystals executives went as the governor was negotiating a federal water-quality agreement that would affect the company’s sugarcane fields near the Everglades. Phosphorous runoff from farming and fertilizer polluted the water.
To pay for the cleanup, Scott could raise taxes on sugar farmers responsible for much of the pollution or use tax dollars. Environmentalists called on him to require companies to pay the bill.
After Scott returned to the U.S., he pledged tax dollars to finance the bulk of the restoration. In exchange for providing land for the cleanup, Florida Crystals received a no-bid lease to farm state-owned property near the Everglades.
“The fact that Scott was taking a trip with sugar execs the month before the deal was announced really just proves that sugar gets what it wants, when it wants,” said Alan Farago, president of Friends of the Everglades, a nonprofit that supports environmental preservation. “It is probably the most egregious example of government for sale that environmentalists know of.”
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