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Sunday, March 27, 2011

The curious case of Rick Scott: How is the way he's running the state like running a business?

by John MacBeath Watkins

One of the enduring myths of American politics is that the best managers are all in the private sector, and if those captains of industry could be convinced to take the cut in pay it would entail, they could straighten this country out. We are now witnessing how that plays out in real life.

Florida Gov. Rick Scott says he wants to run the state like a business. So, canny businessman that he is, he spend $73 million of his own money to get a job that pays $130,000 a year, and announced that he would refuse the salary.

His goals, now that he is governor, include doing what any businessman would to for his company -- reduce revenues. He plans to cut property and corporate taxes by $2.2 billion in his planned two-year budget, and these combine with other proposed tax cuts for a total of about $4 billion. Revenues are already down about $4 billion because of the recession, so to balance the budget will require what we bloggers quaintly refer to as "savage cuts."

That is to say, something like a 20% cut in education and transportation. In other words, Scott wants to be businesslike by providing the customers -- Florida voters -- with less service.

 As a businessman, I'm pretty sure if someone offered to pay for building an asset that would improve the value of my business, I'd take them up on it. But Scott turned down $2.4 billion in federal stimulus funds for high-speed rail between Orlando and Tampa without even consulting the state legislature, which has a Republican supermajority in both houses.

The next question, I suppose, is whether, like the board of directors of Columbia Homecare Associates, voters will eventually decide he's cost them too much and ask him to leave. The directors had seen their company fined a total of $1.7 billion for 14 felony counts of defrauding the U.S. government.

Which highlights one of the major differences between the way he ran the business he was reportedly forced out of and the way he is running the state. He was willing to accept federal money when he was running a business.

And indeed, in running his business, he seems still to be willing to take federal money. After leaving Columbia/HCA, he started his own company, Solantic, which operates clinics able to accept Medicare and do drug testing. Now Scott has issued an executive order to subject state employees to mandatory drug testing, which would no doubt increase Solantic's profits. You see, his chain of clinics profits because people get drug tests from them to make sure they can pass an official drug test, so even if Solantic doesn't get a contract to test state employees and welfare recipients, it will profit from those who wish to make sure they can pass before they take the official test. Of course, how could anyone think that influences Scott? He handed over his $62 million stake in Solantic to his wife. Why this is supposed to eliminate the obvious conflict of interest is a mystery I have yet to penetrate.

Solantic is under investigation for allegations of fraudulent Medicare billing. It's the sort of thing that happens when the pressure is to produce profits and it's clear top management doesn't mind cutting corners, so if the allegations turn out ot be true, don't assume Scott knew about the fraud. He would, in that case, have merely set up the incentives. And since Solantic has this little problem with fraud allegations, isn't it just the kind of outfit you'd want to give more control over federal money?

Scott is pushing through a bill that would give private clinics far more control over the Medicaid program that serves Florida's poor. Eric Jotkoff, a Florida Democratic Party spokesman, was quoted in Mother Jones as saying, "These changes to Medicaid are basically nothing but a business plan for Rick Scott's Solantic. It's clear that he stands to greatly profit from these changes to Medicaid."

So there you have it. Scott appears to be running the state like a business. His own, personal business. He's already made moves that are likely to increase his wealth by far more than the salary he is refusing to accept, leaving us to wonder whether he can recover his investment in the election if his plans come to fruition.

I have a feeling by the time he's done, people will have a new regard for those career politicians who don't know how to make the job pay more than $130,000 a year.

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