As Republicans move to scrap blind trusts, Democrat agriculture chief Nikki Fried launches one

By Dan Christensen, FloridaBulldog.org

After years of embarrassing news about mega-wealthy former Gov. Rick Scott’s financial conflicts of interest, state Republicans in the House and Senate are pushing bills to repeal Florida’s controversial qualified blind trust statute.

Repeal would outlaw future blind trusts. But that won’t affect a new blind trust quietly set up by new Florida Commissioner of Agriculture and Consumer Services Nikki Fried one week after taking office in early January.

Fried, the only Democrat to hold statewide office, is a lawyer and Fort Lauderdale resident who until her election was a lobbyist for the medical marijuana industry and the Broward School Board. Her platform focused on more access to marijuana and stronger gun control.  On Feb. 6, she named Nashville consultant Holly Bell as the state’s first “director of cannabis.”

Fried, 41, is also only the second statewide officer after Scott to employ a Florida blind trust. (The only other public official in Florida with a blind trust is Sam E. Mousa, chief administrative officer to Jacksonville Mayor Lenny Curry.)

According to paperwork filed with the state ethics commission by Fried’s lawyers, the lone asset placed in the Nicole Fried Blind Trust was “100% of the membership interest in Ignite Holdings LLC, a Florida limited liability company.” Florida corporate records state that Ignite Holdings LLC was incorporated on Jan. 17, the same day as Fried’s blind trust was created. Fried’s name is not included in the corporate records for Ignite Holdings LLC.

FloridaPolitics reported in 2016 that Fried dubbed her lobbying shop “Igniting Florida” after she left the Sunrise-based lobbying and legal firm Colodny Fass. Ignite Florida LLC appears to be a reference to marijuana, but Fried could not be reached to discuss her company, its business, its value, why she placed no other assets in the blind trust and other questions.

Immunity

Under the law, officials with a beneficial interest in a qualified blind trust do not have either a prohibited or voting conflict-of-interest regarding their holding. That means Fried is essentially immune from any real or perceived conflicts-of-interest that might involve Ignite Holdings LLC.

Blind trust trustees have complete discretion to manage the trust by law, which includes the power to sell its assets. Yet under Florida’s legislative scheme, trustees can notify public officials when the trust’s assets are sold. No notification would likely mean that Fried’s blind trust still holds her 100 percent stake in Ignite Holdings LLC, information that could prove rewarding should Fried take action based on her holding.

The trustees of Fried’s trust are a trio of Fort Lauderdale lawyers: Craig A. Pugatch of Rice, Pugatch, Robinson, Storfer & Cohen; Darren Spielman of Kain Spielman; and Samuel Eppy of The Eppy Group. Palm Beach Gardens attorney Andrew R. Comiter, of Comiter, Singer, Baseman & Braun, filed the trust papers with the ethics commission. Comiter is also the registered agent for Ignite Holdings LLC.

The Senate sponsored bill to repeal the blind trust law is SB 702. It was filed by Sen. Tom Lee, R-Brandon, on Feb. 11 and is to be considered at 4 p.m. Tuesday by the Ethics and Elections Committee. House Bill 6041 was filed the same day by Rep. James Grant, R-Tampa. Grant’s bill would be effective July 1 of this year, while Lee’s version is effective six months later, Jan. 1, 2020.

Neither Lee nor Grant returned detailed Florida Bulldog phone messages seeking comment as to why they want to scrap Florida’s blind trust law, and if it is because Scott no longer needs it.

Lee has a special connection to Gov. Ron DeSantis. In January, DeSantis picked Lee’s wife, Hillsborough County Circuit Judge Laurel Lee, to be Florida’s secretary of state. She succeeded Mike Ertel, who served just 16 days before resigning after photos surfaced of him wearing blackface.

Scott, now a U.S. senator, opened a blind trust and placed his enormous portfolio of stocks, bonds and other financial assets into it not long after taking office as governor in 2011. He stopped using a blind trust when he went to Washington, where federal rules regarding blind trusts are significantly stricter than in Florida.

Florida’s Legislature passed, and Scott signed into law, a much watered-down version of the federal blind trust in 2013 at Scott’s request. The declared goal: to eliminate any appearance of a conflict of interest between the governor’s financial assets and his official duties by “blinding” him – and the public – to the nature of his vast holdings.

Florida’s blind trust a failure

But the blind trust quickly proved to be a failure. In March 2014, Florida Bulldog used U.S. Securities and Exchange Commission records to detail how Scott and his wife, Ann, had over the last 15 months made more than $17 million selling hundreds of thousands of shares of Argan, a publicly traded company whose Gemma Power Systems did business in Florida.

Asked for comment at the time, Scott’s office said “he has no knowledge of any blind trust activity” because his trust was “controlled by an independent trustee.” In fact, as Florida Bulldog reported six days later, Scott’s trustee was Hollow Brook Wealth Management, a New York investment company run by Alan Lee Bazaar, Scott’s former longtime associate at Richard L. Scott Investments, the governor’s investment firm before he took office.

In July 2014, Florida Bulldog reported that Gov. Scott had a hidden personal financial stake in Spectra Energy, a natural gas pipeline company in a joint venture with NextEra Energy, the parent of Florida Power & Light, to build and operate the $3 billion Sabal Trail pipeline in North Florida. Scott. Scott owned shares of Spectra Energy worth $53,000 on Dec. 31, 2013.

Scott and his appointees backed the project, but no one in power in Tallahassee objected publicly. In May and June 2013, Scott signed into law a pair of bills designed to speed up permitting for the Sabal Trail project. Later that year, the Florida Public Service Commission, whose five members were appointed by Scott, unanimously approved construction of Sabal Trail.

There were plenty of more stories about:

• The governor’s undisclosed interest, via his wife, in Mosquito Control Services of Metairie, LA, and how Florida Zika emergency funds went to a partner of Ann Scott’s aerial spraying business.
• The 2017 sale of Scott’s blind trust stake in Michigan-based Continental Structural Plastics to a Japanese conglomerate as part of an $825 million deal.
• The payment of $200,000 in job-creation incentives to 21^st Century Oncology. The blind trust owned an indirect interest in 21^st Century via a $210,000 investment in Vestar Capital Partners.
• How in 2012 Broward Health’s board of commissioners, all appointed by the governor, awarded 21^st Century an unprecedented, no-bid 25-year radiology contract.
• Scott’s huge, hidden stake in a Chinese company that supplied components to the maker of Brightline Trains.
• How Peter Antonacci, appointed by Scott to replace Brenda Snipes as Broward supervisor of elections, misled Florida’s Commission on Ethics about Scott’s sham blind trust.