Exactly who is the Florida Development Finance Corporation (FDFC) accountable to?
Senate President Pro Tempore Anitere Flores (R-Miami) and Senator Debbie Mayfield (R-Melbourne) are among those who would like to know. Both senators sent inquiry letters to the Orlando-based financing authority’s executive director, William Spivey, weeks ago and, as of Friday, had not received a reply.
The two senators were requesting clarification about the organization’s issuance of private activity bonds (PABs) for All Aboard Florida’s (AAF) high-speed trains. In addition to her role as president pro tempore, Flores also chairs the Senate Banking and Finance Committee. Mayfield chairs the Joint Legislative Auditing Committee.
A fact sheet put out by the FDFC states that FDFC is “a statewide financing authority and is tasked to assist for-profit and not-for-profit businesses. . . The FDFC is not an extension of the Executive Office of the Governor, a public agency of the State of Florida, nor is it a division of Enterprise Florida, Inc.” The fact sheet goes on to explain that its “sole purpose is to provide financing for qualified projects and borrowers.”
The organization’s directors are appointed by the governor and are to be confirmed by the Florida Senate.
The Treasure Coast communities of Martin and Indian River counties have been battling AAF in court on several premises, including successfully challenging $1.75 billion in PABs issued by the FDFC.
In August 2016, U.S. District Court Judge Christopher Cooper ruled that the PABs issued by FDFC provided a substantial subsidy valued at $600 million to AAF, a private company, since the federal government forgoes receiving tax payments on the bonds. Receipt of a substantial government subsidy would in turn make the high-speed train project subject to the federal National Environmental Policy Act (NEPA).
AAF plans to operate their Brightline trains in excess of 100 mph through small towns in Martin and Indian River counties, at street level including through traffic circles and pedestrian crossings.
One of the legal arguments the two counties had made was that AAF had violated NEPA by not undergoing the multiple environmental reviews the act requires. Cooper’s ruling would give the counties legal standing to proceed with that complaint.
After the ruling, the company and its sponsor, the U.S. Department of Transportation (DOT), withdrew the bond issue. Then in November 2016, the FDFC approved a new $600 million bond request.
In her letter, Flores wrote, “I am seeking to better understand what the FDFC believes its role is in AAF’s new PAB application. Based on DOT’s recent approval of this $600 million allocation, I am concerned that the FDFC has informally agreed that it can simply transfer its previous actions and approvals to the new application, without any further consideration of the economic and social impacts of the project it would help fund.”
When Flores’s letter went unanswered for more than a month, Mayfield sent her own letter. “As Chair of the Joint Legislative Auditing Committee, it is my responsibility to provide oversight and accountability to government operations in the State of Florida. As an entity created by the Florida legislature, the Florida Development Finance Corporation falls under our committee purview,” she wrote on March 30.
“By ignoring requests from ranking members of the Florida Senate, the FDFC has raised substantial questions about its integrity as a government organization. Who do they report to?” asked Brent Hanlon, chairman of Citizens Against Rail Expansion FL, a group which has worked with the counties to fight AAF.
“The FDFC had originally rubber stamped the issuance of $1.75 billion in PABs to benefit AAF during a 2015 proceeding where commissioners failed to take genuine community concerns seriously and the outcome seemed to be predetermined. Never mind the published media reports, based on public record requests, that pointed to ex parte meetings and meals between FDFC Commissioners and AAF,” said Hanlon. “Don’t the taxpayers deserve to know more about this shady deal and the government organization backing it? The total failure of FDFC to respond to simple questions by elected state senators clearly demonstrates it is an out of control entity that answers to no one.”