Deal me in
Enterprise Florida is a public-private partnership that helps determine where incentive money gets spent to create jobs in the state. Sometimes, board members' companies reap the benefits.
By SYDNEY P. FREEDBERG and CONNIE HUMBURG
Published August 27, 2006
Times were tense at BellSouth Telecommunications. As costs and competition escalated, the phone company began a $700-million modernization and expansion in early 2000.
Then, with layoffs starting to mount in 2001, BellSouth asked the state for a huge tax break.
Only a handful of companies had gotten such a deal - called a capital investment tax credit - since it was authorized in 1998, and BellSouth did not appear to meet the requirements.
But its top Florida executive, Joe Lacher, was a powerful member of the board overseeing Enterprise Florida, the nonprofit organization that spearheads the state's efforts to attract and retain high-wage jobs.
Starting in August 2000, Lacher helped push through three bonuses totaling $290,000 for Enterprise Florida's president. He oversaw bonuses for other senior managers. And his company contributed $400,000 to Enterprise Florida between 2000 and 2005, more than all but one corporate donor.
Meanwhile, a sometimes dubious Enterprise Florida staff put aside concerns that BellSouth might not qualify for the tax break. It helped BellSouth revise its application. It arranged briefings between phone company executives and aides to Gov. Jeb Bush. Twice, it recommended Bush's trade office approve the company's requests.
In December 2003, BellSouth got the green light to collect its first claim: a state tax savings of $2-million.
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Enterprise Florida encourages the Legislature to create and expand corporate tax breaks and grants. It negotiates - often in secret - with companies that contemplate moving or expanding here. And when it recommends incentives for a company, the governor's office almost always approves.
The Orlando-based organization, which has gotten more than $100-million in state money since 2000, likes to boast that it is a national model for doing government work with the savvy and efficiency of private business.
As the BellSouth case suggests, however, another description might be this: a network where back scratching and self-dealing sometimes seem more important than its mission.
Members of its 63-person board of directors, which is chaired by Bush and includes some of the state's most widely admired companies, say they provide active, independent oversight of the organization.
But a St. Petersburg Times investigation shows that a corporate seat on the board - which in most cases requires a $50,000 annual donation - often benefits board members' companies.
Consider the following:
- Seventeen companies represented on the board between 2000 and 2005, including BellSouth, qualified for incentives promoted by Enterprise Florida.
Those companies - about one-fifth of the organizations on the board during that time - have lined up as much as $43.8-million in state-authorized incentives. Additionally, they often get other government benefits, such as local property tax breaks, federal grants, free land and county building fee waivers.
Companies that are not represented on the board aren't as lucky: There are an estimated 1.4-million businesses in Florida, and less than 1 percent have gotten incentives promoted by Enterprise Florida. In fact, most aren't eligible.
- About one-third of the organizations now represented on the board have business ties to Enterprise Florida or its affiliates. It has engaged in a wide variety of transactions with insiders, including payments of about $1.9-million to 15 organizations associated with current board members.
Among those payments: $1.1-million in legal and consulting fees for the Holland & Knight law firm and $157,000 for Florida Trend magazine, an affiliate of the Times. Some of the business was awarded without a full or open bidding process.
- Three big banks are among Enterprise Florida's biggest winners. Companies affiliated with Bank of America, Wachovia and SunTrust have collected about $12-million since 1995 through two Enterprise Florida affiliates, according to Times estimates.
The affiliates manage about $100-million in bonds and a partnership in which the banks invested more than $19-million. Yet four times between 1995 and 2001 auditors raised questions about the public benefits and oversight of those affiliates.
What's best for Florida
Enterprise Florida board members say they always put the organization and the public above their companies' interests.
"Enterprise Florida board members and those companies associated with the board have no influence on - and play no role in - the approval and awarding of business incentives. Your insinuation otherwise is purely inaccurate and offensive," said Bush spokesman Russell Schweiss. "Participation in Enterprise Florida (or any other leadership organization or activity) does not accord access to or influence upon routine financial transactions of the state."
But what's good for the public is often good for their companies, too.
When Enterprise Florida helps a company move to Florida or expand operations here, new jobs and tax revenue generally follow. So does instant business for the companies of many board members.
For utilities like Gulf Power and Verizon, there are more customers to serve; for developers like the St. Joe Co., more homes to build; for firms like Rinker Materials, more concrete to pour; and for banks like SunTrust, more commercial and personal loans to write.
"We participate in Enterprise Florida because we believe diversifying Florida's economy is the right thing to do for the state, and in the long run it's in our best interest as a company," said Susan Martinez, senior executive vice president for AmSouth Bank in Florida.
AmSouth contributed $50,000 to Enterprise Florida in 2005. That contribution had nothing to do with an $18.7-million deal AmSouth handled for Enterprise Florida's bond program 14 months later, AmSouth says. The bank says it bid on the bond deal and got more than $309,000 in fees from an expanding company.
Board members whose companies get incentives are quick to point out that, while the board embraces incentives as smart public policy and often encourages the Legislature to broaden them, they do not vote on individual deals.
Some companies say they should not be precluded from getting incentives or contracts just because they have executives on Enterprise Florida's board. Others say they weren't aware of Enterprise Florida's role in promoting or recommending incentives.
"We participate (in Enterprise Florida) because it's a good business decision," said Publix Super Markets spokeswoman Maria Brous. "We don't expect any preferential treatment."
Lakeland-based Publix has contributed $175,000 since 2001. It has benefited from $3.2-million in incentives since 1999 and now is negotiating for local and state incentives for a proposed distribution center at the Charlotte County Airport. Neither Publix nor Enterprise Florida will put a price tag on any new incentives.
Enterprise Florida says it complies with conflict of interest laws and rules governing transactions between itself and organizations represented on its board.
For example, two-thirds of the board must vote to approve any contract of more than $100,000 that goes to a board member's organization, and that board member must abstain.
Board members say any financial ties their companies have to Enterprise Florida - or to each other - do not compromise their independence or judgment. They also say any benefits they get are miniscule.
"Public interests and business interests are frequently the same," said J. Thomas Cardwell, chairman of the Akerman Senterfitt law firm. The firm has contributed $200,000 to Enterprise Florida since 2000 and made at least $730,000 in fees since 1997 through the organization's bond program.
The law firm's contributions have nothing to do with the bond fees, which are paid mostly by businesses in that program, not taxpayers, Cardwell says.
"There was no inside deal," Cardwell said, adding that the firm got the bond work through competitive bidding three years before it began contributing $50,000 for a board seat. "We were just a law firm that applied."
Many transactions at Enterprise Florida fall under the public radar, and the disclosure rules governing them are not as strong as they might appear. Legislative oversight is lax.
Neither corporate board members nor their companies are required to disclose names of clients, the value of stock holdings, terms of loan transactions or some board compensation fees.
By law, the state and Enterprise Florida are allowed to keep information about incentives secret for at least two years.
And the two-thirds rule for contracts means little; virtually every Enterprise Florida board vote since 1999 has been unanimous.
Former Florida Comptroller Bob Milligan, whose auditors did an exhaustive review of Enterprise Florida in 2001, questions the companies' assertions that they have only the public and the taxpayers in mind.
"If you're going to pay for a board seat, you're not going to fritter away $50,000 unless you expect to see some sort of return from it," said Milligan, a Republican who served from 1995 to 2003.
Some grassroots organizations feel shut out.
"It's about who you know ... a pattern of contributions and payback," said Bill Newton, executive director of the Florida Consumer Action Network. The nonprofit group shines a light on laws and programs that it says benefit special interests at the expense of most taxpayers.
"Enterprise Florida is not about helping consumers; it's about making money" for the corporations on the board, Newton said. "Our perception is it's strictly to help companies get corporate welfare."
Expand and modernize
Few companies have gotten more from the state than BellSouth. In addition to the $2-million tax break, the telecom qualified for about $1.9-million in other state-approved incentives between 1998 and 2003.
Last year BellSouth deployed up to 32 state lobbyists. Besides the $400,000 it contributed to Enterprise Florida between 2000 and 2005, it donated $2.4-million to state political parties and candidates. And it has friends in high places - from the Bush White House to the governor's office.
Lacher, the company's top Florida executive for 15 years, says his prominent role at Enterprise Florida and his company's contributions to the organization had no bearing on the financial incentives BellSouth received.
He says he can't recall talking to anyone at Enterprise Florida or the governor's office about tax breaks, though he may have made colleagues at BellSouth aware of incentive programs.
The pay packages and bonuses he oversaw for the Enterprise Florida staff were based strictly on performance, he and other board members say.
"I consciously recused myself on anything with BellSouth to avoid any appearance of a conflict of interest, which is apparently what you are trying to suggest now," Lacher said in a brief telephone interview. He retired last year from BellSouth and the Enterprise Florida board.
Lacher referred follow-up questions to BellSouth.
"BellSouth, led by Joe Lacher in his tenure as president of BellSouth's Florida operations, followed the spirit and the letter of the law in claiming available tax credits, and denies any inference to the contrary," spokeswoman Marta M. Casas-Celaya said in an e-mail.
Lacher served on Enterprise Florida's board under both Gov. Bush, a Republican, and his predecessor, Lawton Chiles, a Democrat. As vice chair in 1999 and 2000, Lacher effectively ran the board since Bush, the chairman, rarely attends Enterprise Florida meetings.
In addition, Lacher was chair of the committee that approves compensation for Enterprise Florida staff and executives. When Enterprise Florida's vice chairmanship passed to George Koehn of SunTrust in 2001 and to William Habermeyer of Progress Energy in 2003, Lacher remained on that committee.
Lacher's tenure as an Enterprise Florida leader came as BellSouth faced growing costs and competition.
The telephone company responded to the challenge in January 2000 with a $700-million plan to expand and modernize so it could compete with cable companies by offering high-speed Internet service. To help offset some of the cost, BellSouth sought state tax incentives, including the capital investment tax credit.
The 20-year credit is designed to attract or retain capital-intensive, high-impact companies that create at least 100 new jobs in Florida and invest at least $25-million in a project.
In an undated draft of its application, BellSouth said its "communications network transformation" project already had added 535 jobs in 2000 and 2001. The project would draw businesses and people to the state and make life easier for those already here, BellSouth said. With the tax credit, the company estimated, it could potentially save more than $40-million over the first seven years alone.
"The availability of these high-tech data services depends on BellSouth's ability to team with the state of Florida," BellSouth wrote.
Wynnelle Wilson, the governor's chief analyst for incentives, questioned whether BellSouth qualified, however. So did at least three managers at Enterprise Florida.
BellSouth already had begun to outsource some higher paying engineering and technology jobs. While its application was pending, it announced plans to lay off 226 Florida workers. The governor's office questioned how permanent the new jobs would be.
Applicants for the tax credit also are supposed to be certified by the governor's office "prior to the commencement of operations." BellSouth's project already was well under way.
"I have briefly discussed with Wynnelle Wilson ... your company's desire to receive the capital investment tax credit in connection with the laying of broadband," Crystal Sircy, Enterprise Florida's senior director of competitive programs, wrote in an August 2001 e-mail to a BellSouth tax manager in Atlanta. "She reiterated the concerns I have raised ... regarding commencement of operation, permanency of the jobs created, etc."
Despite the misgivings, both Enterprise Florida and the governor's office agreed to continue discussions. Enterprise Florida staffers met with BellSouth representatives, relayed messages between the company and the governor's staff and arranged briefings.
On Sept. 6, 2001, Sircy sent an e-mail about a planned meeting to then-Enterprise Florida president John Anderson.
The Enterprise Florida board pays staff bonuses from corporate contributions. Lacher helped persuade fellow board members to approve three bonuses for Anderson totaling $290,000 in three years' time, on top of his annual salary of $200,000.
With the assistance of Enterprise Florida's staff, BellSouth retooled its application to stress the public benefits of its plans: more high-speed services in inner cities and rural areas where the company might not otherwise invest.
Wilson, the governor's incentives coordinator, was still skeptical.
"It's looking better," Wilson wrote in an e-mail dated Nov. 26, 2001. "At least urban and rural areas are mentioned."
She agreed to talk to Pamella Dana, the governor's top trade aide, to "see how far she is willing to go with this project."
On Dec. 13, Enterprise Florida recommended approval of the application, which promised "the direct creation of 411" jobs by the end of the year - curious, since the company earlier said it had already created 535 jobs.
Dana approved the application the next day, but within two months the tax credit was again in doubt. BellSouth acknowledged it might have trouble maintaining the 411 jobs it had pledged.
In February 2002, four BellSouth executives met with staff from Enterprise Florida and the governor's office. The company asked for flexibility in meeting its job goal, adding that it had made mistakes in calculating its promised average wage.
On April 1, BellSouth officially requested that the jobs goal be lowered from 411 to 328 and vowed to meet 90 percent of its original wage target (which the state declines to reveal).
On April 19, Enterprise Florida recorded a BellSouth contribution of $75,000. And during the June 19 meeting of the compensation committee, Lacher recommended that Darrell Kelley, Anderson's successor, get a three-year contract starting that August - with a pay package potentially worth $300,000 a year.
The next day, the full board - following Lacher's motion - awarded the retiring Anderson a $100,000 bonus, plus $92,000 in bonuses to eight other senior managers.
In July, Enterprise Florida staff recommended to the governor's office that BellSouth be allowed to lower its job and wage goals.
A year and a half later, on Dec. 5, 2003, the governor's office certified that BellSouth had met the original requirement of 411 new project jobs - even though statewide the company had announced plans to lay off 700 Florida workers in 2001 and 2002.
BellSouth claimed a credit of $2-million for tax year 2001, a company tax manager confirmed. In 2002, the company intended to claim a $500,000 credit, but after it wiped out all of its tax liability with other large deductions, it could no longer claim the credit. Records indicate BellSouth has not received any further credits.
Meanwhile, BellSouth applied for additional incentives, including tax refunds for a proposed customer operations center in Duval County that would create 200 jobs. Enterprise Florida staff recommended - and in July 2003 the governor's trade office approved - a potential award of $800,000. BellSouth has not received any of that money.
It has shed more jobs, however. BellSouth's Florida employment has fallen from 14,817 (as reported on its 2001 application for its first tax break) to about 13,000 (the number recently provided by a company spokeswoman).
Enterprise Florida denies any favoritism in recommending tax breaks to the governor's office, and the governor's office says it rigorously examined BellSouth's application.
"In all (capital investment tax credit) cases, our team of analysts always start out asking the tough questions - testing the responses, double testing, to see if a project meets the requirements and intent of the statute," said Scott Openshaw, a spokesman for the governor's Office of Tourism, Trade and Economic Development. "Performing its due diligence, (the governor's office) reviewed and analyzed this project very closely."
Enterprise Florida's top executives, who were based in Orlando, say incentive negotiations were always handled by their Tallahassee staff. They say they never felt pressure to help any corporate contributor.
Anderson, who was president from 1996-2002, says he doesn't remember ever talking to Lacher or anyone else at BellSouth or Enterprise Florida about the capital investment tax credit or other incentives.
"I did not get engaged in incentive matters affecting the companies where we had board members/investors involved," added Kelley, who followed Anderson as president from 2002-05.
They also say the bonuses that they and top staff received had no affect on Enterprise Florida's recommendations on incentives for BellSouth or any other corporate contributor.
"There were very specific" performance guidelines and formulas for bonuses, Anderson said. "There was very, very little room for subjectivity by Joe Lacher, anyone on the compensation committee or staff ... I never, swear to God, saw any instance of anyone above me or below me trying to game the system."
The Times asked Gov. Bush if he had ever discussed the tax break with Lacher or any other officers or directors of BellSouth.
"The real question should be, 'Are Florida's incentive programs, and how they work, a secret?' The answer to which is no," responded Schweiss, the Bush spokesman, in an e-mail. "Enterprise Florida is in the business of marketing the state and its tool kit of incentives. The governor would be disappointed if they were not promoting to all within reach what Florida has to offer in terms of retaining, growing and establishing business in the state."
More than the governor
When Enterprise Florida began in July 1992, it had a 21-member board, 12 from the private sector and nine state agency chiefs and elected officials. The governor chose the private-sector members.
The organization was to be a shining example of a public-private partnership and eventually "weaned off the public trough," said former comptroller Milligan.
Instead, Enterprise Florida, which replaced the state's Department of Commerce in 1996, came under steady criticism from auditors and legislators between 1997 and 2001. They questioned whether the agency took too much credit for creating jobs and found a separate corporate account paying for lavish travel, lobbying and six-figure staff salaries.
When Gov. Bush took office in 1999, state government was contributing all but $1.9-million - 92 percent - of Enterprise Florida's $24.5-million annual revenues.
Vowing reform, Bush reduced spending and cut the staff. The board of directors approved new ethics rules, became more hands-on and agreed to adhere to provisions of the Sarbanes-Oxley Act. (The act, which went into effect after the Enron scandal, sets standards for public accounting and financial disclosure at publicly traded companies.)
"We divulge every penny we spend," said Susan Story, Enterprise Florida's current vice chair and chief executive officer of Gulf Power.
Yet the Times found the new Enterprise Florida is a lot like the old. Eighty-two percent of its $20.3-million in revenues last year came from the government.
It has 16 bank accounts, up by three. Its president was paid more than $324,000 last year - one of six senior managers who made more than the governor ($129,060). And over 14 years, its board has tripled in size. With 63 members, it is almost as large as the staff (69 last year).
Today, most of the board members are elected by the board itself, and board seats are often passed down from one executive to another within the same company.
'No inside deal'
Over the years, auditors have noted that Enterprise Florida does business with organizations in which some of its board members may have an interest. Those transactions "may not always be conducted on an arm's length basis," the organization's auditor said last year.
The Times review found that Enterprise Florida paid about $1.9-million to 15 organizations associated with its board members since 1998. In addition, at least three firms have agreements with Enterprise Florida that help them reach private customers.
Money goes the other way as well. Three nonprofit groups affiliated with Enterprise Florida pay it for management services. Another group reported paying Enterprise Florida about $60,000 a year for advertising and trade shows.
Such insider deals can be perfectly legitimate. But they also raise questions about whether Enterprise Florida got as good a deal as it would have with any other firm.
Board members say every contract undergoes strict scrutiny.
"It's transparent and in the sunshine," said board member Tony Villamil, whose consulting firm got his board colleagues' approval for a contract with Enterprise Florida in 2004. "We're not talking about multimillion-dollar deals." The contract was for $72,000.
Enterprise Florida says its staff constantly reviews transactions to make sure taxpayers are getting a good deal. Usually, it requires at least two bids, though its policy allows exceptions for reasons such as "time restraints based on external deadlines" and "unique qualifications of vendor, which may include satisfactory prior working history" with Enterprise Florida.
In Villamil's case, Enterprise Florida cited nine justifications for giving his firm the job over one other bidder. Among them: cost, the firm's "connection with legislators" and "is an EFI (Enterprise Florida) board member."
Villamil, a former under secretary of Commerce under former President George Bush, was Gov. Bush's top trade aide in 1999 and 2000, responsible for overseeing Enterprise Florida and approving incentive deals.
In November 2003, Enterprise Florida paid a Disney resort $49,610 to provide space for a board meeting and a speech by Gov. Bush touting his education agenda.
"Other hotels were not able to accommodate" the two events, Enterprise Florida said in a statement. "As a result, there was no bidding."
Disney has contributed $350,000 to Enterprise Florida since 2000. That year, Enterprise Florida's staff helped Disney get a tax break potentially worth $680,000.
"It is silly to imply that the company was awarded approval for incentives because of Walt Disney World's support of Enterprise Florida," Disney spokeswoman Jacquee Polak said. "It is also absurd to imply that Enterprise Florida has hosted events at Walt Disney World because of the company's support of Enterprise Florida."
Entangled with itself
Holland & Knight is another big financial supporter - and big business partner - of Enterprise Florida.
Since 2000, the law firm has held an open-ended, no-bid contract to serve as general counsel to Enterprise Florida at rates as high as $425 an hour. Holland & Knight has advised the organization on issues ranging from financial disclosure requirements to potential conflicts to Enterprise Florida's obligations under the state's open records laws. Fees paid: $667,514.
In addition, Enterprise Florida's board voted in 2003 to authorize a consulting contract with Holland & Knight to advise the state on military base closings. Cost: $499,451.
Between 2000 and 2005, the law firm contributed more than $375,000 in cash and $107,000 in free legal services to represent Enterprise Florida in China.
Kelley, who became Enterprise Florida's president two years after Holland & Knight got the legal deal, says he succeeded in substantially reducing the organization's legal fees. He considered seeking other bidders for the legal work, but eventually decided against it, he says.
"It didn't make sense to go and educate another lawyer as to the ins and outs of the regulations" of Enterprise Florida, said Kelley.
He resigned last year after his three-year contract was up and took a job at Holland & Knight.
Four times since 2002, records show, Holland & Knight has notified Enterprise Florida of potential business conflicts, disclosing that it represented another client whose interests might conflict with Enterprise Florida's.
One example: After the board voted to give Holland & Knight the military consulting contract, the firm got entangled with itself: One of its lawyers wrote the military contract with Enterprise Florida while another reviewed it for Enterprise Florida.
Bill Kean, an Enterprise Florida administrator, saw a potential problem: The way Holland & Knight crafted the agreement suggested that the firm could use work produced for Florida "in work for other states."
Kelley agreed to send the contract to another law firm for review. Whom did his staff pick? A former Holland & Knight lawyer.
Lynda Keever, publisher and chief operating officer of Florida Trend magazine, earned her seat on the Enterprise Florida board in 2001 with free advertising. The monthly business publication also has gotten some other benefits.
The free color ads, one a month, are valued at the current rate of $109,140 a year, or $9,095 for each full page.
Trend is one of the few businesses that provide non-cash donations valued at $50,000 in exchange for a board seat.
The magazine also draws advertising revenue for publishing and distributing annual special magazines called Florida Trend's Business Florida and Florida Small Business.
Enterprise Florida approves all editorial content. Most of the ads are placed by state agencies, trade groups, key businesses in Florida and corporations represented on Enterprise Florida's board.
Enterprise Florida pays only shipping costs for the special magazines, which offer state promotional material laid out as news.
Business Florida 2006 tells readers that it is "The Official Publication of Enterprise Florida & The Florida Economic Development Council." But it does so in small letters and white ink that are difficult to read against the blue background of the cover photo.
Andrew P. Corty, president of Trend Magazines Inc., says everything in Business Florida is clearly labeled and readers are given sufficient warnings that it is not news.
Florida Small Business is "more of a hybrid," he acknowledged, because it is edited by a Trend staffer and distributed to some of the magazine's regular subscribers.
Corty declined to say how much Trend pays to produce the Enterprise Florida publications or how much it makes from them.
Most of the incentives that Enterprise Florida promotes are aimed at large companies. To broaden its reach, a former Enterprise Florida subsidiary put together two ventures in the 1990s to support smaller firms, from high-tech startups to promising manufacturers.
Yet records suggest that the biggest beneficiaries may be three big banks represented on Enterprise Florida's board - SunTrust, Wachovia and Bank of America.
Combined, the banks and their predecessors have poured $1,275,000 in contributions into Enterprise Florida between 2000 and 2005. That's about 16 percent of all corporate donations.
Meanwhile, the banks (and their affiliates) have received about $12-million through the two Enterprise Florida programs, records show.
The first program, created in 1995 with $1.1-million in state seed money, was an experiment to help startup companies in Florida.
The banks invested more than $19-million in a partnership called Cypress Equity.
The money was then invested with private funds operating nationwide, which in turn used it to help businesses specializing in everything from biotech to petroleum.
The banks will not disclose their profits. But so far, documents provided by Enterprise Florida suggest, the banks have made about $10.9-million since 1995.
"The results have been exceptional returns to all parties," said Louis Laubscher, Enterprise Florida's senior director of capital programs. He also has served on Cypress Equity's board.
In 1995 and twice in 1998, however, auditors questioned the public benefits because the investment money was "not targeted" to Florida businesses.
According to a Cypress Equity Funds report last year, only 17 percent of the companies that got money were in the Southeast.
The second program, called the Florida Development Finance Corp., was set up by the Legislature in 1993 to provide low-cost financing for promising manufacturers.
A 1995 audit cited a tentative early goal of up to 35,000 "high-quality" jobs by 2005. As of last year, according to a report prepared by Enterprise Florida, 55 businesses had received about $88-million in loans. But they had agreed to create or retain only about 2,700 jobs.
The program has been lucrative for two banks and two law firms represented on Enterprise Florida's board. Fees paid to them since 1997: about $2-million, according to documents provided by Enterprise Florida.
Wachovia and SunTrust (and affiliates and predecessors) have collected more than $1-million for underwriting bond issues, closing statements obtained from Enterprise Florida show. For doing legal work for the banks, Holland & Knight has received more than $200,000, the statements indicate. Akerman Senterfitt, the official bond counsel, reported earnings of $730,000, largely for representing businesses getting loans.
Essentially the same team of law firms and banks has remained in place since 1997.
Florida Development Finance Corp. got $162,000 in state seed money and relies on Enterprise Florida for financial support and administrative services.
In 2001, Enterprise Florida strongly disagreed with an audit's finding that the bond projects were not sufficiently supervised.
The bond agency "not only adequately monitors the use of bond proceeds ... but exceeds current industry standards," Enterprise Florida wrote.
Kelley, the Enterprise Florida president from 2002-05, says the bond agency and the investment partnership were never on his "radar screen. ... They were just not big financial concerns."
Today SunTrust might be Enterprise Florida's most connected corporate player, managing 13 of the organization's 16 bank accounts.
Longtime board member George Koehn, who retired as SunTrust's top Florida executive last year, served as Enterprise Florida's vice chair in 2001-02. He says he worked hard to raise money for Enterprise Florida and fix its problems after the critical 2001 audit.
"A public-private partnership was a pretty new thing and very complicated and there were not a lot of ground rules," Koehn said. "All of what I did and my predecessors did was to try to build an organization with good meaningful results."
Times researcher Carolyn Edds contributed to this report.
Fresh off leading trade efforts in Laredo, Texas, Enterprise Florida's new leader brings a fresh view to the state's economic efforts. 1D