FOX 13 Investigates: What color is Bill Johnson's parachute?

Just over a year ago, Johnson signed a contract worth $265,000 a year, plus benefits -- a $600-per-month car allowance, for instance. There was also a $100,000 per year bonus potential; in August, he got half of it -- a prorated amount, EFI’s board members said, since he’d only been on the job for a few months.

Questions over EFI’s operations and effectiveness have reached a peak in the past few years. Last month, lawmakers ultimately rejected Scott’s quarter-billion dollar request to put more state money in EFI’s job incentives fund, used to close deals with companies thinking about relocating to Florida.

Last Monday, Johnson announced he was stepping down.

“Following the close of this year’s state legislative session, and in conversation with the Governor, it is clear that Enterprise Florida will now move in a new direction that includes organizational changes,” he said in a letter to board members.

Johnson, who has not announced his final day, has been in the position just 13 months. He declined FOX 13 News' interview request.

The tab for Florida Commerce Secretary Bill Johnson’s short tenure could top $500,000 for compensation and benefits. That doesn't include tens of thousands of state dollars used to create his brand new presidential office. 

When Gov. Rick Scott appointed Johnson to take the reins as Florida’s Secretary of Commerce, the Miami-Dade County employee landed one of the most lucrative jobs in the state.

Technically, that position pays him nothing, but in this state, the gubernatorial appointment comes with the dual title of CEO and President of Enterprise Florida, Inc. (EFI), the mostly taxpayer-funded entity charged with luring jobs to the state.

Johnson's Contract

In addition to the $340,000 he’s earned in base and bonus compensation so far, he could receive $132,500 in compensation on the way out.

According to his contract, he gets the compensation if he makes an exit before June 30, 2017.

There are exceptions to the golden parachute clause, like if he was terminated for gross negligence or illegal activity - or if he is the one who resigned.

So, does he get the exit compensation?

“It will be strictly in accordance with his contract,” EFI vice-chair Alan Becker told FOX 13 News, declining to answer the question.

Becker said the decision for Johnson to step down was a mutual decision between the governor and Johnson.

“Bill is transitioning out and the details of his departure are still being finalized,” said Enterprise Florida spokesman Stephen Lawson, in response to FOX 13 News’ request for the employment termination letter.

Presidential Expenses

With or without the exit compensation, Johnson’s short tenure will be an expensive one.

An analysis of hundreds of pages of EFI ledgers and receipts obtained by FOX 13 News reveals EFI used at least $170,000 in state money to expand its Miami office, rather than have Johnson move to EFI’s headquarters in Orlando.

Staying in Miami meant staying in his hometown. It also kept him close to his other job.

His contract with EFI allowed him stay on as an employee for Miami-Dade County, where he’d been director of the water and sewer department. At the time, the county was in the midst of a major sewer upgrade.

The contract says "in consideration of this circumstance and for the efficient transition of that department,” he could work in a “minimum necessary,” part-time consultant capacity, until June 30, 2015 -- while also holding the role of EFI President and CEO and and Florida Secretary of Commerce.

Among the Miami office expansion costs:

- $40,000 for new furniture for Johnson and four other staffers, including $1,800 for a coffee table for Johnson’s office, $350 desk chairs, and a $1,000 side table for the reception area. 
- $7,000 for four flat-screen televisions and a refrigerator
- $2,000 for a new solid-brass business sign
- $60,000 for infrastructure and equipment -- like new computers, security system upgrades, utility installations, and IT networking for “remote operations.”

The expansion also meant a build-out of EFI’s current office space at the SunTrust building, located in downtown Coral Gables. The increased square footage raised EFI’s annual rent from $178,000 to a quarter-million.

Becker, a Fort Lauderdale lawyer, defends the expansion, saying the Miami office was already undersized.

"It's the office that was responsible for all our international activities. We have many foreign visitors and dignitaries come," he said, adding taxpayers are paying below-market rent for the expanded lease.

Still, office space will be part of a review of EFI expenses and operations, set to be the main topic of discussion at EFI’s May board meeting in Naples.

FOX 13 News raised questions about charges found on Johnson’s expense reports last November.  At the time, one of the office expenses showed up on his credit card statement - a charge for $6,662 for custom-made lounge chairs. They were paid for with state dollars, then returned, after FOX 13 News began requesting public records.

Among the other findings: Meals nearly always exceeded state per diem limits, and there were some exceptionally pricey dinners. There was a $350 dinner for Johnson and two of EFI's publicly paid employees at Eddie V’s Prime Seafood in Tampa; a $374  dinner with his former colleague from Florida Ports at Red, The Steakhouse in Miami.

At the time, EFI defended the charges, saying Johnson’s expenses were paid for by corporate donations, not state dollars.

By statute, EFI is required to bring in private donations that equal the amount of operating funds the state kicks in. For the current fiscal year, the state funded around $30 million for overhead (not including $43 million for the incentives fund); private cash contributions - mostly from Florida company executives who pay EFI $50,000 for a seat on the board - were just $1.6 million.

EFI has traditionally used the small percentage of operations that are funded by corporate contributions to justify expenses that would not be allowable under state statute, such as alcohol and generous staff bonuses. It has also used the fund to pay for employee and gubernatorial trips to Paris for trade missions.

Critics have said that EFI’s justification is weak, because money pulled out of the private donations can’t be used for other expenses, which end up falling on the public.

The governor refused to answer questions about FOX 13 News’ findings in November. Scott also refused to answer questions about the state costs for the presidential office expansion. However, in a letter to EFI board members last week - sent the same day Johnson said he was stepping down - he called for a hard look at EFI’s operations and overhead costs.

He specifically mentioned salaries and office space.

A review of EFI’s expenses began months ago. After a FOX 13 News investigation aired, Becker called for a policy review by the audit and salary committees.

"When the story came out and questioned some expenses and some policies, we wanted to make sure that we were, in fact, good stewards of the public's money,” Becker said. "For the most part, found that the policies were entirely proper; the expenditures were very reasonable. But that doesn't mean we can't do better."

Becker says they’ve already revised and implemented new policies for expenses and reimbursements, and they’re continuing the review.

"We set about creating policies to make sure there's never any question, to make sure taxpayer money is being well-spent," he said. 

EFI’s Future

Funding EFI has been Scott’s nearly singular focus this past year, if not longer. Job numbers have been his top talking point for years. 

In October, he announced a three-year, $250 million plan for the “Quick Action Closing Fund” - his top objective for the legislative session.

"If we don't do this, it's a big mistake for our kids,” Scott said at the fall meeting with board members.

Lawmakers ultimately didn’t agree with that assessment; they funded EFI’s operations, but didn’t add more money for the “Quick Action Closing Fund.”

“I thought it was very unfortunate that the House eliminated the incentive payments from the budget,” said Sen. Jack Latvala, R-Clearwater, the chairman of economic development subcommittee and frequent proponent of EFI.

Latvala’s proposal included putting the $250 million in the fund, but added more accountability measures. It passed in the Senate, but not the House. “Obviously, without any incentive payments for companies, that makes the job of Enterprise Florida harder, but I still think there’s a lot they can do,” he said. 

The private-public partnership was created two decades ago, dissolving the state department of commerce. Hundreds of millions of state dollars have been poured into incentives funds. As of October, more than $130 million sat in an escrow account, reserved for companies that meet certain benchmarks. Over the years, escrow account funds have frequently reverted back to the general fund.

In Scott’s letter to board members last week, he asked David Wilkins, his former Secretary of the Department of Children and Families, to target $6 million in savings. The letter also asked EFI to consider whether to privatize some, or all, of EFI’s functions.

Latvala hopes “some iteration” of Enterprise Florida stays.

“There’s still going to be companies that want to move to Florida,” said Latvala, who declined to comment about questions about EFI’s overhead costs. “We need to have someone to do that. I think Enterprise Florida is a good group to do that.”

Some question Scott’s suggestion of further privatization.

“If the private sector continues to barely support what’s going on, why would you give the private sector more control over what’s going on?” said Greg LeRoy, executive director with Good Jobs First, the think-tank that has produced several critical analyses of private-public economic development groups.

“I think they should debate whether [EFI] should have any future, or whether it should go away, and the state takes back the functions that are inherently public,” he said.

Golden Parachute?

With or without exit compensation from EFI, Johnson will enjoy a soft landing.

According to his contract, Johnson received his full EFI salary starting March 1, while still working part-time as a Miami-Dade county employee in a consultant role until June 30, 2015. The stated reason on the contract is so he could help the county transition during the implementation of the “significant public investment program.”

Johnson was also nearing the goal date for his own public investment program.

June 30, 2015 was the end of his 60-month participation in the state DROP system, making it his mandatory retirement date with the county. Records show he received a lump payout of just under a million dollars and his first monthly benefit of $14,254.47, last July. He’ll also have a 3-percent cost-of-living increase every July for the rest of his life.

Have a tip? FOX 13 Investigates wants to hear from you. Email us at investigates@wtvt.com. Contact the reporter directly at (813) 870-9758 or email tina.jensen@foxtv.com.

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