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Debate over new position is lost in sea of big issues

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By HOWARD TROXLER, Times Columnist

© St. Petersburg Times
published January 29, 2002


TALLAHASSEE -- In any other year, the fight over who gets to regulate insurance, state-chartered banking and securities in this state might be the biggest news in town. What could be more important than the protection of the homes, health and savings of Floridians?

But it is a tough year. Our state Legislature is riven over tax reform, drawing new political districts and the problems of a shaky economy. The debate over who will hold this power is not getting much attention.

It is a great debate anyway. It pits against each other two of our state's elected officials who are about to lose their jobs -- Tom Gallagher, the state treasurer, and Bob Milligan, the state comptroller. Both are Republicans.

The way it works now, Gallagher holds and invests the state's money, and Milligan cuts the state's checks after making sure they are for the right purpose. After this year, their jobs will be merged into a single position, chief financial officer.

Gallagher also currently regulates insurance. Milligan also regulates state-chartered banks and securities. Should the new, consolidated job inherit all of these powers as well? Milligan says no. Gallagher says yes.

"I have been fighting since I've been in this job," Milligan told me Monday, "to separate the chief financial officer of the state from the regulation of financial services."

It is too much power in one place, Milligan believes. An elected official with all that regulatory power could abuse it, and pressure the regulated industries under him for campaign contributions.

Besides, they really are widely different functions, Milligan says. The chief financial officer will be busy enough with his or her constitutional duties. He supports the proposal of the state House, which is to spin off insurance, banking and securities regulation into a separate department, with appointed regulators under the joint control of the governor and Cabinet, like several existing agencies.

To do otherwise, says Milligan, 69, a retired Marine lieutenant general, "flies in the face of good government, and good public policy." He recalls his own election in 1994, in which he had to defeat a heavily financed incumbent. Rather than retiring, Milligan says he might run for the new post -- if he doesn't like the way the Legislature sets it up.

Gallagher, 57, occupies the office next door to Milligan's on the main floor of the state Capitol. He is running for the new job. He says the voters of Florida intended to reduce the size of the state government when it approved the merger in 1998, not just to create two new separate agencies.

Stripping away the regulatory functions, Gallagher says, would leave only the job of "statewide elected bookkeeper." It would even make more sense to make THAT job appointed, and keep the regulator directly answerable to voters, he argues.

Gallagher prefers a competing proposal over in the state Senate. The chief financial officer would nominate the regulators of insurance, banking and securities, but they would be confirmed by the governor and Cabinet. They would operate semi-independently, with final say over their regulatory decisions, although still under the chief financial officer's department.

That insulates the regulators, Gallagher contends. The chief financial officer couldn't use his post to drum up money from regulated industries: "That stick is removed." Besides, he says, does putting regulators under the governor and Cabinet really get rid of politics?

Power and politics are part of the fight. For three years now, the House and Senate have failed to agree on the duties of the new job. Our own state Sen. Jack Latvala, R-Palm Harbor, is leading the effort on the Senate side. It's hard to imagine it not becoming part of the overall, hard-driving horse trading that is unavoidable in the Legislature.

I asked Gallagher: Okay, so you couldn't reverse the regulators. Could you give them a crummy office? Harass the hired help? Angle to get them fired? Gallagher said that such "game playing" would have no place. No matter who wins, I hope he is right about that.

-- You can reach Howard Troxler at (727) 893-8505 or at troxler@sptimes.com.

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