The blind trust in which Florida Gov. Rick Scott has placed an extensive portion of his vast private investments complies with a new ethics law, the state ethics commission ruled without comment on Friday.
Scott requested the opinion from the Florida Commission on Ethics to ensure the trust he set up in 2011 to prevent perceived conflicts of interest conforms to the requirements of the state’s new ethics law that went into effect May 1.
Christopher Anderson, general counsel and deputy executive director of the commission, described Scott's trust as an example of how trusts should be set up under the law, with a "disinterested" third party authorized to independently make decisions regarding investments.
"What we have here is the governor continuing to be very transparent and complying with the ethics laws," Anderson said.
Anderson noted that the commission, of which five of the nine members have been appointed by Scott, still must establish the paperwork and certification process for when public officials set up their trusts.
Pete Antonacci, Scott’s general counsel, said the trust Scott set up emulates federal requirements for public officials. Antonacci also doesn't expect the investment decisions of the trust's adviser to be made public as part of disclosures required for the governor's re-election effort.
"The idea here is to make sure that the person who has created the trust, as an officeholder, does not know what the investment adviser has done as far as buying and selling of assets," Antonacci said.
After the meeting, Dan Krassner, executive director of the watchdog group Integrity Florida, questioned the commission's ruling and called the blind trusts an "inherently flawed process" that allow officials to keep their assets secret from the public.
"The ethics commission did not use its authority to seek additional information for this opinion beyond the limited facts presented to them by the governor," Krassner said in an email. "An issue that still needs to be addressed is whether the manager of the trust is a business associate of the governor, which is prohibited by the new ethics law."
Scott created the blind trust nearly four months after taking office, setting nearly $74 million aside in the account controlled by Alan L. Bazaar, a partner of New York-based Hollow Brook Wealth Management LLC.
Hollow Brook was an investment adviser for Scott before he took office and established the trust, Antonacci said.
"They were not in business together," Antonacci asserted.
Scott was not required to establish the trust.
When the trust was established, the ethics commission issued an advisory opinion that said, in part, "no prohibited conflict of interest would be created were the governor to place his investment assets in a blind trust."
Scott posted net worth of $218 million before he ran for office and reported that number was down to $103 million when he moved into the governor’s mansion. In June, Scott released paperwork showing that as of 2012 ended his net worth stood at $83.77 million.
The blind trust, which accounts for $72.8 million, made $3.1 million in interest last year, according to the financial disclosure form for 2012.
According to the report, Scott's Naples Gulf View Estates home is worth $9.2 million, and a boat club condominium is worth $99,750. He also holds an IRA account with CL King & Associates worth $468,118. No liabilities are listed.
Scott's financial disclosure does not include those of his wife, Ann Scott, whose assets include the company that controls the private jet used by the governor.
"All of the governor's assets that could have any impact on decision-making as chief executive or Cabinet office were placed in the trust in 2011," Antonacci said.
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