Wednesday, December 30, 2009

Ponzi schemer II: Scott Rothstein and his run at Florida's treasure chest

Here we are, two days in a row with fresh stories on Ponzi billionaires using their money trying to corrupt government. See the previous post for Allen Stanford's successful infiltration of the US Congress, as investigated by the Miami Herald. On Tuesday it’s the St. Petersburg Times’ story on Scott Rothstein and his run at Alex Sink’s office and the huge treasure chest of the Florida State Board of Administration.

The story also was the main lead in the Miami Herald, thanks to the news exchange partnership of the two papers. We’ve got to say the old mainstream media aren’t dead yet. The two stories mark tremendous effort on the investigative side. They tell complicated stories, especially the St. Pete paper’s story on the State Board of Administration, which is little known but is so big ($136 billion) that if it loses a couple billion on bad investments it’s only a few percent.

And yes, this blog has been aware of the SBA for many months, thanks to Jeb Bush, the ex-governor who became a consultant for now-belly-up Lehman Brothers and helped grease the way for good Floridians’ money to disappear from SBA accounts.

Read about that at this link to one of the posts on this blog.

But back to the issue at hand. Alex Sink is the highest-ranking Democrat in state government as chief financial officer, and the likely candidate for governor against a cabinet colleague, Attorney General Bill McCollum. Scott Rothstein was a generous donor to Republicans and not for the Democrats until this year when he gave $200,000 to the Florida Democratic Party, fulfilling a pledge made at a fundraiser for Sink, the St. Pete Times reports. Her office then was recruiting law firms for legal work, and Rothstein’s firm tried hard to get it – in vain, as it turned out. But still, what’s a Ponzi schemer likely to want to do with a big state legal job? Rip it off big-time, I’d say, to make a big profit on that investment of $200,000.

Couple questions:
  • Why does Florida have to pay “tens of millions” in fees for legal work?
  • Why doesn’t the Attorney General supply legal workers for some big part of these jobs?
  • Which firms got the work, and since three of them are reported as having donated to Sink, why aren’t we hearing more about their qualifications?

To Sink’s credit, she’s trying to raise the SBA as a campaign issue. Here’s the way the St. Pete Times puts it (this aspect doesn’t seem to be included in the print edition of the Miami Herald):

Sink has made reform of the SBA a campaign issue. She has suggested that the oversight board be expanded to include nonpoliticians, which Crist and McCollum have balked at. In a campaign e-mail, Sink recently said her reforms were being blocked by "career politicians who would rather protect their own political interests'' than the retirement checks of Floridians.

Should she and her two fellow politicians who oversee the SBA be barred from accepting campaign contributions from firms seeking business with the agency?

"I think the whole governance structure is not appropriate,'' she said. "It would suit me to have no elected official on the board.''
There’s another way to do it. As this blog said on Monday: Get money out of politics.

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