Florida’s Lieutenant Governor Resigns in Setback for Scott

Florida’s lieutenant governor resigned amid a racketeering investigation that resulted in charges for 57 people, the latest setback for her boss, Republican Governor Rick Scott.

Jennifer Carroll’s resignation was spurred by a probe into Allied Veterans of the World Inc. & Affiliates, Scott said at news conference today in Tallahassee, the capital. Carroll, 53, once counted the Jacksonville-based nonprofit -- which authorities say was a front for gambling rather than a charity - - among the clients of her public-relations firm.

Scott said that by resigning “she did the right thing for the state and for her family.”

He picked Carroll, a former state representative who is the first black person to hold the post, as his running mate in the 2010 election. Her resignation is the latest reverse for the governor, the former chief executive of HCA Holdings Inc. who spent $73 million to win his first political office.

Facing re-election in 2014, he was rebuffed this month when his push to expand Medicaid under President Barack Obama’s Patient Protection and Affordable Care Act was defeated in two Republican-controlled legislative committees. Scott had opposed the expansion before the November presidential election.

Losing Florida

Last year, Florida, a state both presidential campaigns considered competitive, gave its electoral votes to Obama, who became the first Democrat in 68 years to win it twice. Democrats used Scott’s governorship to argue against voting Republican, and his party lost seats in both the state House of Representatives and Senate.

Scott began 2013 with an approval rating of 33 percent, according to a poll taken between Jan. 11 to Jan. 13 by Raleigh, North Carolina-based Public Policy Polling.

His struggles put him among the country’s most vulnerable governors as 36 seats, including 22 held by Republicans, are up for election this year and next.

Carroll, mother of Miami Dolphins defensive back Nolan Carroll, was interviewed yesterday by the Florida Department of Law Enforcement about her work for Allied Veterans, Scott said. She wasn’t charged.

Authorities issued warrants for 57 people in six states in connection with a racketeering and money-laundering scheme conducted at 49 gambling centers masquerading as Internet cafes, according to the Seminole County Sheriff’s Office.

Passed Money

The company is accused of operating illegal slot machines in Florida and defrauding public and government agencies, according to an Internal Revenue Service affidavit filed in Oklahoma federal court. The investigation also involves the U.S. Secret Service and sheriff’s offices in three Florida counties, according to court records.

Allied Veterans earned more than $290 million from 2007 to 2012. About 98 percent was directed to for-profit companies and people who operated the nonprofit, according to the affidavit.

Scott said he’ll name Carroll’s replacement after the legislative session ends on May 3. The case isn’t the first time her entanglements have drawn attention.

A staffer, Carletha Cole, said during a 2011 polygraph interview that she saw Carroll and another aide, Beatriz Ramos, in a “sexually compromising position” in Carroll’s office, according to a court filing. Cole said Ramos ordered her to book adjoining hotel rooms when they traveled.

Carroll, who is married, denied the allegations, telling WTSP-TV in Tampa that, “Usually black women that look like me don’t engage in relationships like that.” She later apologized.

The polygraph was administered as part of an investigation into Cole, who was charged with distributing a secret recording of a conversation between her and Carroll’s chief of staff, Jon Konkus. Cole disputed the charges, saying Carroll’s office encouraged staff to secretly record conversations, according to a court filing.

Before it's here, it's on the Bloomberg Terminal.