The state should have audited the $10 million Hope Florida deal. It didn’t happen: Trident

by Michelle DeMarco, Florida Trident

A $67 million Medicaid settlement deal at the center of a criminal investigation reaching the top levels of the DeSantis Administration was struck without any oversight from the state’s Chief Financial Officer, in contravention of traditional practice and possibly of Florida law.  

The Florida statute that governs money owed to the state requires the CFO to audit the “accounts of all the officers of the state” in regard to transactions like last year’s controversial settlement with Medicaid contractor Centene Corp. that saw $10 million in public proceeds funneled through the Casey DeSantis-affiliated Hope Florida Foundation to attack a referendum staunchly opposed by her husband, Gov. Ron DeSantis, to legalize cannabis.

In addition, a Department of Financial Services Rule within the state’s Administrative Code, requires agencies negotiating settlements to submit the proposed agreements to the CFO for review. 

But no such review or audit was conducted of the Centene settlement by then-CFO Jimmy Patronis, who is now a Congressman, or the Department of Financial Services (DFS) he led. Patronis said through a spokesman he had no knowledge of the payment to the Hope Florida Foundation.

“The Congressman had no approval role in the settlement, and never heard of Hope Florida,” Patronis’ Press Secretary Ryan Walker wrote in an email to the Florida Trident.

While DFS holds “broad authority to audit and settle state accounts,” said Devin Galetta, communications director for the agency, “DFS was not involved in this settlement agreement.” There was no additional explanation as to why the agency was not involved.

When contacted on the phone by the Trident, former Florida CFO Alex Sink said the settlement should have been vetted by the CFO and called for a separate probe into why that didn’t happen. 

“It begs the question of whether the law was violated,” said Sink, a Democrat who served as the state’s CFO from 2007 to 2011. “There needs to be an investigation.”

The lack of financial oversight raises more questions about the propriety of the Centene settlement and the $10 million transfer to the Hope Florida Foundation, the money-raising arm of the Hope Florida state charity spearheaded by Casey DeSantis. The payment was shrouded in secrecy after it was approved last September by several state agencies, including the Agency for Health Care Administration (AHCA) and Florida’s Attorney General’s Office. Neither AHCA nor the Attorney General’s Office responded to questions from the Trident. 

Attorney General James Uthmeier figures prominently in the scandal. The 37-year-old Uthmeier was serving as chief of staff for Gov. Ron DeSantis at the time the Centene deal was made while also running Keep Florida Clean, a political action committee aimed at defeating a constitutional amendment to legalize recreational cannabis. When the Hope Florida Foundation received the $10 million, it dispersed the money to a pair of dark money non-profits which then transferred $8.5 million to Uthmeier’s PAC. 

Amendment 3 received 56% of votes cast but failed to reach the 60% threshold required to pass, giving Uthmeier and his boss, DeSantis, a major political victory. 

Uthmeier, who was appointed attorney general by Gov. DeSantis earlier this year, has claimed no wrongdoing, but Republican Rep. Alex Andrade, who led a committee investigation into the $10 million payment, alleged during a committee hearing that Uthmeier committed money laundering and wire fraud with public funds that should have gone to financially disadvantaged Floridians. 

Andrade forwarded the committee’s findings to the state attorney’s office, precipitating the criminal investigation, according to the Tampa Bay Times/Miami Herald Capitol Bureau, which has played a leading role in the coverage. Both Ron and Casey DeSantis have defended the payment to the Hope Florida Foundation, with the governor claiming last Tuesday the criminal investigation is “pure politics.” 

The statute that requires the CFO to audit state accounts, Section 17.04,F.S.,  also grants authority to the CFO to conduct investigations of financial transactions and mandates that if any violations of criminal law are detected they must be referred to law enforcement or prosecutorial agencies. 

Former CFO Sink said that at a minimum, the settlement should have been “scrutinized” by the Department of Financial Services, but added she was not surprised it wasn’t. The elected CFO role has been “extremely weak” under DeSantis, she said, claiming the governor “thumbs his nose” at its oversight function. 

“The CFO is supposed to be the watchdog of the state,” she said. “The inmates are running the jail.”

Michelle DeMarco is an award-winning investigative reporter who returned to journalism after more than two decades in public service. Contact her at [email protected].

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