• July 12, 2024

Disney Caught Pulling A Big Bait And Switch On Florida…

 

According to an independent audit of the entertainment giant’s role in the state, Disney “bait and switched” the state to secure the ability to effectively govern itself for more than 50 years. It then used its “complete and unaccountable governmental power” to “maximize its profits” at “the expense of the public good.”

The Reedy Creek Improvement District (RCID), which Florida created in 1966 to attract Disney to the state, was audited, and it was discovered that Disney had taken total control of the government organization and had made use of the framework to become one of the biggest companies in the world.

The report, obtained by The Daily Wire, says the steps Disney took to maintain control over RCID are “shocking,” and that its establishment “facilitated the most egregious exhibition of corporate cronyism in modern American history.”

Nine months after Florida Governor Ron DeSantis dismantled the Disney-controlled district—a move his critics said was motivated by a political struggle with the corporation—the investigation was made public.

DeSantis said he took action because Disney should “live under the same laws as everybody else” and that “allowing a corporation to control its own government is bad policy.”

The audit’s findings will likely be seen as a vindication of DeSantis, with the report stating that RCID’s 55-year stint “represented a stunning deviation from the good governance standards of the State of Florida.”

The audit included an examination of the district’s governing framework and urban planning, in addition to a forensic audit of its financial records. It was discovered that Disney had selected government officials by hand and paid district staff in amounts “akin to bribes” to retain its hold on power. Additionally, it pushed costs onto nearby communities’ taxpayers by using the district as an exemption from taxes.

Law School at George Mason One of the independent auditors, Professor Donald Kochan, discovered that Disney had fooled Florida into obtaining the Reedy Creek structure and that it understood it wanted to rule itself.

According to the research, Disney promised Florida that it would construct a city centered on a single theme park, featuring “affordable housing, transportation, and other community services.” Disney “quickly abandoned its city-building pretense,” according to Kochan. Rather, it constructed the contemporary Disney World, which consists of four golf courses, numerous amusement parks, and dozens of hotels, all of which are exclusive to tourists and lack housing.

“The RCID was a mousetrap,” the report states. “Disney dangled savory cheese in front of the Florida Legislature and the people of Orlando, but quickly abandoned its city-building pretense.”

According to Kochan, Disney always intended for this to happen because a real population in the district would put its authority in jeopardy.

“The historical record demonstrates that Disney disdained voters from the outset and did not want its special district or its corporate choices to be subject to public accountability through popular elections,” Kochan states. “Documentary evidence from Walt Disney himself makes clear that he did not want permanent residents in his model community.”

In an interview with The Daily Wire about his audit, Kochan said that although it was “a bait and switch,” Florida would still have made a mistake even if Disney had kept up its half of the agreement.

“I do not conclude in this report that had they fulfilled these promises, this would have been a good idea,” Kochan said. “The governance structure was a bad idea. We would have hoped that the legislature never would have been seduced by the narrative in the first place.”

The study exposes Disney’s rigorous control over even the democratic parts of the RCID. For example, board members could only be appointed if they possessed land in the district. Consequently, Disney would deed inaccessible land parcels to board members for the term of their appointment, which they would then have to return to Disney. The business would even keep covering the board members’ property taxes.

The system ensured that the board “would be responsive to Disney’s preferences and would serve Disney’s interests,” the report states.

“Because The Walt Disney Company controlled the election of the Board of Supervisors, the Board of Supervisors effectively reported to Disney and represented Disney’s interests,” it says. “This created the potential for corruption.”

According to the study, the financial audit seems to have uncovered possible tax fraud as well as areas where corruption may have existed.

The federal government frequently hires forensic accountant William Jennings to carry out investigations, and Jennings discovered that Disney treated the district employees who were meant to be overseeing it like employees.

Benefits offered to employees of the Reedy Creek Improvement District included high discounts on merchandise and related services, such as Disney cruises, as well as free yearly passes for themselves and their families.

The report states that “showering gifts and lavish spending on RCID employees” created the “impression that these employees worked to achieve the interests of Disney, not of the District or other property owners.”

The audit states that these “improper” payments were “akin to bribes of public officials” when they were coming from Disney. In recent years, the district has reimbursed Disney for the benefits, categorizing the perks as “financial and administrative services.”

Even after staff members brought up the tax issue with leadership, the district neglected to report the perks to the IRS as taxable income.

The district administrator, John Classe, referred to the benefits as a part of “employee training,” which included yearly passes for every employee and three or more family members.

The report notes that “RCID employees received the tickets regardless of their job duties and for the use of their friends and family,” criticizing Classe’s claim as “not plausible.”

Jennings found that the same administrator, Classe, in a 15-month span put $166,000 on the RCID’s American Express card for “celebrations, sports tickets, memberships, meetings, and other events,” including roughly $23,000 for “entertainment and golf.”

The “stunning deviation from … good governance standards” was allowed to happen due to a lack of oversight.

“Hardly anyone outside of the special district knew about the scope and scale of the problems plaguing it,” the auditors found. “Complete and unaccountable governmental power was handed over to a private corporation, transforming a democratic institution into a private corporate monopoly.”

The report’s conclusion states that the inability of the business to effectively manage Disney was “disastrous for the surrounding communities of Central Florida,” since these communities were left to foot the bill for the company’s large workforce’s housing, healthcare, and other public services.

“Over 100,000 people work in the District, but they must commute from elsewhere because the District has no workforce housing,” the report explains, noting that it was also “not home to any schools, hospitals, or libraries and instead foists those costs upon the surrounding communities which must supply those services for Disney employees and their families.”

Disney’s urban planning was “focused almost entirely on optimizing corporate goals,” rather than the needs of its workforce, which consists predominantly of people with “relatively low-wage service industry jobs,” all living outside the district.

Disney has undoubtedly had a positive influence on the area, according to the audit, but it could have benefited Central Florida just as much if it hadn’t taken the steps it did to establish self-government.

The audit was to be finished within a year of the law that abolished the Reedy Creek Improvement District being passed in February 2023. Last Monday, Democratic senators presented legislation to reinstate the district, claiming that DeSantis’s new Central Florida Tourism Oversight District had “no transparency.”

The auditors also discovered that Disney signed a 100-year contract with the district and took other measures to document its hold over the district during the last days of Reedy Creek. In court, the recently established Central Florida Tourism Oversight District is attempting to invalidate these alleged “11th-hour agreements.”

Disney’s battle is not surprising, according to the report’s authors.

“No one would expect a company that’s grown obese on a steady diet of gigantic portions of exemptions and privileges to peacefully pass back the plate,” it states.

The report will be sent to DeSantis and the legislature later on Monday.

It can be read in full here.

 

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Patriots Beacon