tampabay.com

Two for CFO set cash-flow example

Two candidates vying for the Republican nomination for chief financial officer have healthy personal finances.

By ALISA ULFERTS
Published August 27, 2006


If Senate President Tom Lee and state Rep. Randy Johnson have one thing in common, it's that spending two months each year away from their day jobs hasn't hurt their wallets. In fact, both have grown richer in their years in Tallahassee.

The two men are vying for the Republican nomination for chief financial officer, the Cabinet officer who cuts the state's checks, makes short-term investments, manages the cash flow and balances the books. A third Republican candidate, Milt Bauguess a Tallahassee financial planner, will be on the ballot but has not mounted a significant campaign.

A review of the two men's personal finances produced one undeniable fact: If either of them were to increase the state's wealth at the rate they increased their own, Florida would never worry about money again.

The primary is Sept. 5.

Randy Johnson

In 1998, Randy Duane Johnson was a man of moderate means. He, his wife and his two elementary school-age children got by with a single car - a '95 Buick Riviera. On weekends they tooled about in an 11-year-old, 27-foot Sea Ray boat. He had a $165,000 house - and a mortgage. His net worth was $25,733.

Fast forward eight years - the span of Johnson's career in the state House. His salary as president of the Central Florida Sports Commission has more than doubled to well over $200,000. He has a bigger house in Celebration - worth almost $1-million - plus 50 acres of farmland. He's added a motor home and several cars, including a yellow Hummer with state legislator tags, to his garage.

Now, his net worth is $605,243.

He credits his financial ascent to a combination of smart real-estate investments and his expansion of the sports commission over the last 12 years into the largest organization of its kind in the United States.

"When I took it over there was 17 days worth of operating capital," Johnson said of the sports commission, which helps bring sporting events to the greater Orlando area. "When I took over it had one sporting event on the books. This last year we had 72."

Johnson's salary - he's paid more to run an organization with $2.6-million in gross receipts than the $147,000 Orlando Mayor Buddy Dyer is paid to run a city with a budget of $681-million - has been a flash point in recent weeks. He took a leave of absence to campaign full time for the CFO position, and there's talk in Orlando that the furor raised over his paycheck might keep him from returning if he loses.

Johnson says his plan is to not lose.

Last year, Johnson earned $30,096 as a state lawmaker. He also received $18,144 in disability pay from the U.S. Veterans Administration; Johnson broke his hip in 1987 after being blown off a parked jet onto the deck of the USS Saratoga during a military operation off the coast of Libya. A former Navy carrier pilot, Johnson spent six months in a wheelchair and had his hip rebuilt.

Johnson has his share of debt; loans for his house, farm and car and motor home total $1.15-million. If he's elected CFO, he'll have to manage those loans with a $115,781 cut in pay. (As CFO, he'd earn $127,771, plus his VA disability).

Johnson has an economics degree from the University of Florida. After he was injured and left the Navy he worked briefly at the Orlando Naval Training Center and as a staff director for the Orange County Board of County Commissioners. Those connections and his experience in the Orlando area helped get him the sports commission job.

The salary listed on the financial disclosure forms Johnson files with the state is slightly lower than the salary listed on federal IRS forms that his sports commission files as a nonprofit.

Johnson said the difference is a result of varying reporting requirements between the two forms, which meant that some benefits, such as a car allowance, had to be counted twice. He said an accountant prepared the sport's commission's IRS return and declined to provide more details of all his benefits, saying he has disclosed everything he's required to disclose.

"I'm over-reported to death," Johnson said.

With his more expansive personal holdings, Johnson must navigate the place where his personal interests meet his public duties. His district includes Disney World, and a Disney executive is the vice chairman of his sports commission board.

In 2003, the year he received a $37,588 raise, Johnson sought a tax break for go-carts that would have benefitted the Disney built town of Celebration, and he advocated spending $10-million in state money for a rail system that would connect the theme park with the Orlando airport.

Johnson says those were good projects and there have been other times - such as when he voted this year against a rental car tax increase that could have indirectly benefitted the company- when he's voted against Disney's interests.

"And George Aguel didn't say a word," Johnson said, referring to the company executive who is vice chairman of his board.

Tom Lee

After Tom Anthony Lee graduated from the University of Tampa, he almost went to work for an insurance company. Instead, he chose to join the housing development company founded by his father in 1976.

It was the right call. The job gave him his first taste of swamp and sand that is Florida real estate, and set him on a path that 20 years later made him a wealthy man.

Lee still works for Sabal Homes of Florida as vice president of finance, and last year he earned a $396,000 paycheck. In 2004, the company sold 50 houses for $24-million in revenue. Lee is responsible for land acquisition, project financing and management of insurance and the books.

But it's his other holdings - several real estate ventures - whose rental income, exploding property values and capital gains earnings form the bulk of his $3.8-million net worth.

That's more than eight times what Lee was worth when he first joined the Florida Senate in 1996.

"I've made some strategic real estate investments that have turned out well," Lee said. "It's the culmination of two decades of work."

Lee owns all of TAL Holdings, a limited liability company that owns real estate and that earned him $42,590 in income in 2005. It alone accounts for $2.5-million of Lee's assets. He owns 20 percent of Lithia Properties, an office building that netted him $5,900 in rental income last year. His other assets include savings, his house, stocks, an IRA and a lot he owns in Apollo Beach.

And last year he earned $41,600 as Senate president.

Lee has grown his wealth with surprisingly little debt, considering his holdings. The only liabilities he lists on his state-mandated financial disclosure form for 2005 is an estimated $47,500 in taxes payable and a $400,000 mortgage on his home.

Lee says he also pays child support - he divorced in 2003 and has two children - but declines to name the amount. It's one of the few monetary matters Lee won't divulge; he's earned a reputation - and a cache of enemies - by insisting on transparency in political fundraising.

Like other lawmakers Lee is a "citizen legislator" and like the others - his Republican CFO opponent included - Lee's private interests have intersected with public legislation.

Lee has presided over legislation sought by a company, TECO, in which his IRA is significantly invested. (Other utilities also sought the law, which granted them some immunity when someone is injured due to a broken streetlight.) Lee, whose TECO stock was valued at $10,696 at the end of 2005, spoke at a rally in support of the bill, as well as a package of similar bills intended to decrease corporate liability and curb civil lawsuits.

But he also has opposed TECO on other matters, including Lee's push for more funding and authority for the public counsel, the citizen advocate at the utility-regulating Public Service Commission.

Lee says staying active in his businesses keeps him connected to the issues faced by constituents.

"You're a better public servant when you do stay engaged," he said.

Times researchers Angie Drobnic Holan and Caryn Baird contributed to this report.