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Agency and law firm entangled

The hiring of Enterprise Florida CEO Darrell Kelley by legal giant Holland & Knight is the latest in a list of close, lucrative connections.

By SYDNEY P. FREEDBERG and SCOTT BARANCIK
Published November 8, 2005


While Darrell Kelley was chief executive of Florida's top economic development agency, it paid hundreds of thousands of dollars in legal and consulting fees to the Holland & Knight law firm.

Now he's joining the giant law firm as a top executive.

Kelley, 63, starts his job as chief operating officer at Holland & Knight on Nov. 15. His appointment is the latest example of the close and lucrative ties between the law firm and Enterprise Florida, a tax-exempt, nonprofit arm of state government that received $16.7-million in taxpayer funds last year to lure high-wage jobs to Florida.

Among the more conspicuous examples:

--Since 2001, Holland & Knight has held an open-ended, apparently no-bid contract to serve as general counsel to Enterprise Florida at rates as high as $425 an hour. Fees paid to date total $588,600, according to agency spokeswoman Erin Heston. Kelley joined Enterprise Florida in June 2002.

--In 2003, Holland & Knight won an additional $475,000 contract from Enterprise Florida to assess the state's vulnerability in the coming round of military base closures. Only one other company submitted a bid.

--This year, Holland & Knight began serving as Enterprise Florida's official representative in China. Though the law firm is providing its services largely for free, the role affords it entree to the world's fastest-growing economy as well as many potential clients.

The ties go both ways.

Howell Melton Jr., Holland & Knight's managing partner, sits on Enterprise Florida's board of directors, as did his predecessors at the 1,250-lawyer firm. Melton also is chairman of the three-person committee that sets salaries for agency executives like Kelley, who earned nearly $350,000 in total compensation during the 2004-05 fiscal year.

This won't be the first time Kelley has called Melton "boss." Melton served as chairman of the Orlando area's economic development commission several years ago when Kelley was the not-for-profit's president and chief executive officer.

On Monday, both men declined to be interviewed. But in a news release issued by Holland & Knight after inquiries from the St. Petersburg Times , each warmly praised the other.

Said Melton: "Darrell's exceptional reputation for client service, relationship building and commitment to high values make him a perfect fit for our firm. He brings with him significant expertise in business generation and client service, which will complement Holland & Knight's approach to the delivery of legal services."

Said Kelley: "Having worked with Howell Melton as a committee chair and member of the (Enterprise Florida board) and during his term as Chairman of the Metro Orlando EDC, I know him to be an exceptional leader with whom I share common values. I look forward to joining Howell at Holland & Knight, a firm whose national platform offers many great business opportunities."

Kelley's role at the law firm, one of the nation's largest, is not clear. Holland & Knight created the chief operating partner slot last year for Douglas A. Wright, a Tampa lawyer who quickly resigned after the Times reported he had been reprimanded for harassing young, female colleagues.

The position, which ranked third on the firm's corporate ladder and put Wright atop all business operations, including the firm's human resources department, has remained vacant.

Kelley, a longtime Sprint Corp. executive, is not a lawyer. But thanks to his three-year tenure at Enterprise Florida, whose board includes executives representing many of the state's top businesses, he has the potential to give an already powerful firm an extra edge in securing clients.

Under then-Gov. Lawton Chiles, the Legislature created Enterprise Florida in 1992 as a tax-exempt partnership between the public sector and private businesses. Today it gets 82 percent of its funding from taxpayers. Holland & Knight has contributed more than $200,000 since 2000, assuring the law firm a seat on Enterprise Florida's 63-member board of directors, which is chaired by Gov. Jeb Bush.

The board approved Holland & Knight as its general counsel at a November 2000 meeting. Other than former managing partner Bill McBride, who abstained, the vote was unanimous. The agency is permitted to award contracts to companies represented on its board so long as two-thirds of the board approves.

Since then, Orlando partner Jonathan Rich and others have provided Enterprise Florida with hundreds of hours of legal advice.

Among other things, they have advised the group on how to tailor its lobbying activities so as not to jeopardize its tax-exempt status. They have briefed board members on their financial disclosure requirements. They have researched the agency's legal obligations under Florida's Open Meetings Law. And they have drafted or reviewed numerous agency contracts.

Ben Wilcox, executive director of the public interest group Common Cause Florida, said Holland & Knight's close relationship with Enterprise Florida raises its own ethical concerns.

"The fact that (Kelley) is moving in and out of public service and taking a position with someone that (Enterprise Florida) had a contractual relationship with, and now stands to personally benefit from being employed by that law firm, is troubling," he said.

Last week Enterprise Florida said it was negotiating with John Adams Jr., a Laredo, Texas, economic development official, to replace Kelley.

--Times computer-assisted reporting specialist Connie Humburg and staff researcher Carolyn Edds contributed to this report.

[Last modified November 8, 2005, 02:15:36]


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