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Ron DeSantis Hates Elites, But Gives Them the Little Guy’s Money Anyway

Follow the coin. When I was a US Department of Justice financial fraud prosecutor, that was our mantra.

Does the multi-billion dollar investigation Ponzi scheme or Medicare fraud or foreign corruption, tracking the money is a surefire way to get to the bottom of something suspicious—which often points to the leader of the scam. Tracking the amount not only reveals who is behind the scam but also helps reveal the cause and why.

A few weeks ago, The news quietly appeared that thing Florida redistributed large amounts of public servants’ pensions to money managers who contributed to Governor Ron DeSantis‘ political campaigns. That sounds like the usual swamp disposal arrangement, you scratch my back, I’ll scratch you what ordinary people often describe as “corrupt”.

Before getting to the very unethical and possibly criminal nature of this behavior, let’s get into some background information.

The Florida State Board of Trustees (SBA) is responsible for investing the proceeds from the Florida state employee pension fund and other statewide investment programs. In total, the SBA manages more than $228 billion—$180 billion of which belongs to the Florida Retirement System’s Retirement Plan, making it the fifth largest pension plan in the country.

The Retirement Plan is the retirement plan for more than one million current and former state employees: police, teachers, etc. The SBA has an executive who reports to the Board of Trustees, but the Trustees , along with legislative directives, has a “supervisory final decision” for the overall strategy of the SBA. The board of directors includes DeSantis, Attorney General Ashley Moody, and State CFO Jimmy Patronis.

Like any large retirement fund, the Retirement Plan invests in a variety of assets, including U.S. stocks, foreign securities, real estate, fixed income, and cash. SBA’s Annual Report goes into considerable detail—nearly 30 dense pages in small fonts and colorful charts—explaining Retirement Plan investment strategy, risk, return and analysis analysis. asset allocation, including all the different money managers covered by this Report. $180 billion portfolio. The full list of hundreds of money management accounts includes familiar names like Morgan Stanley ($1.85 billion) and less familiar names like Tiger Iron $228 million. receive a fee as compensation for their services.

Nothing in the annual report seems out of the ordinary. But it’s worth noting that Leverage News found that in recent years, the SBA has transferred more than $1 billion in retirement funds to money managers with significant political contributions to the Republican Governors Association (RGA), the amount following That was passed on to the political committee Friends of Ron DeSantis. The article provides some detailed examples: $50 million in retirement funds went to a specific hedge fund whose principal gave more than $1 million to the RGA and $100 million in retirement funds went to another fund that the founder contributed to the RGA for the first time. .

US ELECTION/REPUBLIC-DESANTIS

Florida Governor and Republican presidential candidate Ron DeSantis is reflected in the mirror on the wall of the convention center hall as he speaks at the North Carolina Republican convention in Greensboro, North Carolina, USA June 9, 2023.

Reuters

I haven’t tracked all the dollars that flow from the SBA to the regulators to the RGA to DeSantis. That’s the kind of incredibly tedious work that federal agents and prosecutors do when investigating fraud schemes.

Make no mistake, the arrangement suggested by the report in the article could be criminal. Ability. Federal securities laws prohibit any money manager from receiving compensation from a government entity within two years of making a contribution to that official. (There is an exception for donations under a few hundred dollars.)

Willfully violating these so-called Pay-to-Play Rules is a crime, punishable by up to 5 years in prison for each violation. While the Pay-to-Play Rules are aimed at money managers and other investment advisors, anyone who knowingly helps a money manager commit a crime is also committing a crime. That money managers received a portion of the Retirement Plan appears to have contributed to the RGA—and not directly to DeSantis—cutting off any crime, but that is not a safeguard. perfect defense.

Giving money to a third party knowing that the money is going to the intended beneficiary (whom you can’t give directly) is a way to mask transactions, commonly known as money laundering. At this time, there is no known evidence to charge anyone. That, of course, is the purpose of the investigations.

The article concluded that the SBA’s decision to invest in “high-fee, high-risk” investments by donors cost state employees about $10 billion in interest. It quotes Kathleen Clark, an ethics expert and professor at Washington University at St. Louis: “From afar, it looks like pensioners are hurting here. It seems to raise the obvious possibility that the decisions the pensions board is making may serve DeSantis’ political interests and not the interests of pensioners.

In addition to the possible harm to state employees—hard-working Floridians whose retirement should never be risky to turn business over to campaign sponsors—there are a billion-dollar irony in DeSantis’ SBA. After all, the governor is against the “elite”, claims to represent middle-class families, and brags about draining the marshes of Tallahassee. But his administration has consistently sent middle-class savings to the elite to finance his campaign, a fitting example of the swampy transactional nature of politics that America is disgusting.

On May 24, the same day he announced his candidacy for president, DeSantis signed Florida Senate Bill 110 into law, giving the SBA the power to invest an additional 10%, or $20 billion, in “investments” alternative investments” such as private equity and hedges. fund.

Tracking the amount over time will show us whether this investment strategy is good for Florida’s police, teachers, and other public employees. And perhaps tracking the money, if investigators dig deep, will reveal the rationale and rationale for a settlement that raises serious concerns about the relationship between DeSantis, the RGA, and the sponsors that profit from it. management of the Florida Retirement Fund.

But for now, running for money tells us a lot about who: a candidate talks about draining swamps and working for everyday Americans, but instead of walking away, seems to be selling. stand them to further their political ambitions.



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