Audit Notes: Glades Crusade, Greenspan Deflects, Whatever Happened to…?

The New York Times’s excellent investigation into Florida’s deal for thousands of acres in the Everglades finds an awful lot of fishiness and hints at banana republic-style governance.

Governor Charlie Crist agred to buy the land for $1.3 billion from U.S. Sugar, which agreed to sell the land to the state and which got an, uh, sweetheart deal. The only question is if what went on with government officials there was simple incompetence or something worse:

United States Sugar had an unusually powerful advocate in Gunster, a West Palm Beach law firm that had represented it since 1990. Gunster’s chairman, George LeMieux, was Governor Crist’s chief of staff when the deal was first conceived. Mr. LeMieux, who began working at the law firm in 1994, returned to it in January 2008 as the deal was being renegotiated.


When a “fairness opinion” commissioned by the state found that those appraisals had overvalued the land by $400 million, Florida officials orchestrated a public relations campaign to discredit the findings, internal e-mail showed. Appraisers from the Florida Department of Environmental Protection, which was required to sign off on the deal, were also cut out of the process after raising concerns, e-mail messages showed.

Great work by the Times’s Don Van Natta Jr. and Damien Cave. What a debacle by Florida.

— I linked to this A1 Journal story this morning to discuss banks regulation, but it had some more interesting information in there on deregulation. Here’s Alan Greenspan dodging responsibility for the crisis:

Mr. Greenspan, in an interview, acknowledged that banks should have been forced to hold more capital. He said he regretted the Fed didn’t do more to stem the risky rise of “megabanks,” an issue he raised in 1999. Mr. Greenspan said he shouldn’t be blamed for imposing a deregulatory mind-set. As chairman, he said, he deferred to staff and other governors on regulatory matters.

Does anyone buy that at all? Why does the Journal let it sit there unchallenged?

— I just ran across this early 2007 story by late Audit pal Mark Pittman and it struck me how aggressive the regulatory proposal struck me in the world we live in three years later.

Barney Frank, a Democrat from Massachusetts and chairman of the House Financial Services Committee, and Spencer Bachus of Alabama, the top Republican on the committee, said earlier this month that they favor legislation making bond investors liable for loans that end up in default.

Sheila Bair was on the warpath, too:

Bondholders are as much to blame as lenders, Federal Deposit Insurance Corp. Chairwoman Sheila Bair in Washington says.

“We should hold the servicers’ and the investors’ feet to the fire on this,” Bair said in testimony to the House Financial Services Committee last week. “We did not have good market discipline with investors buying all these mortgages.”

Whatever happened to that one?

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.