Gov. Scott’s federal financial disclosure disguised blind trust loan to daughter

By Dan Christensen, FloridaBulldog.org 

Gov. Rick Scott

Gov. Rick Scott’s blind trust loaned as much as $5 million to a Delaware company privately owned by his daughter Jordan. But you wouldn’t know it by reading Scott’s recent “full and complete” federal financial disclosure form.

Jordan Leigh Scott isn’t mentioned in the 125-page document. Rather, the governor listed the loan as an “accounts receivable from a business,” Seabass Properties LLC. The loan value was reported to be in a range between $1 million and $5 million, earning interest this year for the blind trust of $15,000 to $50,000.

Gov. Scott disclosed his blind trust assets in late July while campaigning against Sen. Bill Nelson. Until then, Florida law prohibited him from having any knowledge or control of the blind trust’s assets. Still, Scott directed the blind trust loan to his daughter’s company, disguising it as a business investment.

This is what Gov. Scott’s campaign had to say when asked why he  disclosed this as an investment, and not a loan, and also how he accomplished the transfer of blind trust funds to his daughter’s company.

“It is ridiculous and offensive to question a father making a personal loan to his daughter. It is completely within the purview of the blind trust for the trustee to take out money for expenditures – not for investments ” spokeswoman Kerri Wyland said in an emailed statement. “The Governor cannot, and does not, instruct the trustee on any matters relating to investing, or relating to where money should come from within the trust, for these personal expenditures.”

“Governor Scott has never made a single decision as Governor with any thought or consideration of his personal finances.”

Avoiding taxes?

In Florida, a blind trust owner is legally prevented from directing a specific investment, but the law does allow the owner to request distributions of cash or other unspecified assets.

Jordan Leigh Scott

By giving the money to a limited liability company instead of directly to his daughter, Gov. Scott bypassed the need to file a federal gift tax return while avoiding any taxes that might have been due. Limited liability companies (LLCs) are not subject to income tax; owners are taxed directly on profits.

The governor’s loan to Seabass Properties was made sometime after its Feb. 18, 2016 incorporation in Delaware, a state that does not identify the owners of corporations. But Jordan Scott disclosed her ownership a year later in Texas, where it turned out the name Seabass Properties was already taken so she registered to transact business under the assumed name Seabass Real Estate LLC.

A few months later, in June 2016, a multi-million dollar revocable trust owned by First Lady Ann Scott and controlled by Gov. Scott bought the recently divorced Jordan a 4,000-square-foot home at 2202 Bonita St. in the Tarrytown Oaks section of Austin, TX, taking back a promissory note for $1,515,000.

The general warranty deed conveying the property to Jordan was signed by Ann Scott and notarized by Diane Moulton, a key gatekeeper to Gov. Scott and the longtime director of his executive staff in Tallahassee. The document was signed on June 7, 2016, a Tuesday.

Florida’s misuse of public position statute prohibits public officers like the governor from “corruptly” using their “official position or any property or resource which may be within his or her trust, or perform his or her official duties, to secure a special privilege, benefit, or exemption for himself, herself, or others.”

Questions not answered

Scott campaign communications director Wyland did not respond directly when asked why the governor allowed or instructed Moulton to notarize a document in a private transaction not involving his official duties. Likewise, there was no direct response when asked whether Scott has permitted his staff to notarize other private documents.

Diane Moulton, director of Gov. Scott’s executive staff

“The Governor does not discuss the First Lady’s investments with her or her financial advisers. First Lady Ann Scott discusses her finances with her financial adviser, like millions of Americans. It’s insulting to infer that the First Lady needs her husband to dictate her financial decisions,” Wyland said in an emailed statement.

Gov. Scott’s loan to Seabass Properties is the latest example of how Florida’s weak blind trust law has been ineffective in keeping Scott from knowledge of its assets.

Four years ago, Florida Bulldog reported how U.S. Securities and Exchange Commission records showed that Scott had sold stocks in his blind trust with impunity, raking in millions of dollars in profits along the way.

Another story less than a week later reported how Scott’s blind trust was run not by a disinterested fiduciary, but rather a business crony, Alan Bazaar. The story reported, too, how SEC records revealed an apparent coordination of transactions between the blind trust, the First Lady’s revocable trust and the Scott Family Partnership. Also, it disclosed an apparent conflict because Florida’s State Board of Administration, the giant investment manager which Scott chairs, owned stock in companies in which the blind trust was also heavily invested.