As Florida Governor, Jeb Bush Bought Land From Timber Company That Later Paid Him $1 Million

June 19, 2015


By Andrew Perez and David Sirota June 19, 2015

Florida was buying wetlands. Seeking to conserve its fragile coastline, the state sought to set aside acreage in perpetuity, ensuring it would never be developed. But as then-Gov. Jeb Bush assessed a proposal to buy a choice parcel — a 26,000-acre piece of swampland near Jacksonville — he worried that the price was far higher than the land’s true worth.

“I’m concerned about the value of the property,” Bush told top state officials during a meeting in Tallahassee in March 2000.

This was a subject Bush knew something about, having previously earned his living in real estate. After expressing his reservations, however, Bush quickly assented to the purchase, calling the parcel “a jewel.” Then he cracked a prescient joke.

"Man,” the governor said, according to the minutes of the meeting, “I can’t wait to get back into the real-estate business and sell property to the state."

That wish would ultimately come true.

A year after the state bought the land, Bush approved a plan through which the state purchased logging rights on part of the property, paying $4.6 million to a publicly traded timber and real-estate company called Rayonier Inc. A state audit would later conclude that this price was likely inflated: Florida officials had relied on “questionable assumptions” that “may have led to misleading and overstated value conclusions.”

During Bush’s eight years in office, Rayonier would secure almost $100 million from the state of Florida in exchange for surrendering logging rights and property. In 2008, two years after Bush left office, Rayonier gave him a seat on its board of directors as it continued to sell property to Florida.

When Rayonier appointed Bush to its board, the company specifically touted his “expertise in real-estate and public-policy issues.” This know-how was an asset, given that Rayonier was at the same timepublicly expressing concerns about what it called “anti-development groups” in Florida that were “seeking constitutional amendments, legislation and other anti-growth limitations” that threatened to impede the growth of its business.

With Bush on hand to lend his knowledge of state government and his political connections, Rayonier overcome these obstacles, securing state government backing for two major developments near Jacksonville. Florida has agreed to spend taxpayer money widening a highway in the vicinity of those developments. Rayonier secured a deal with the state to sell renewable energy to Florida utilities. Rayonier also waged a legal battle that ultimately prompted the state Legislature to preserve a tax benefit boosting major landowners.

During his six years on Rayonier’s board, Bush would draw nearly $1 million in pay for this part-time job, according to the company’s financial statements.

As Bush now seeks the Republican Party's nomination for the U.S. presidency, he is presenting himself as an outsider who abhors the culture of lobbying and inside dealing that often shapes politics. But some advocates for greater government transparency point to the land deals Bush brokered with Rayonier followed by the hefty payday he secured for himself as evidence that he is a savvy exploiter of the very culture he now decries.

“It’s a classic example of cronyism,” said Peter Butzin, who leads Common Cause Florida, an advocacy group, who described Bush’s dealings with Rayonier as emblematic of how many politicians operate. “When they are cozy with interests in office, it’s not surprising they would end up working on behalf of those interests when they leave office.”

Bush’s presidential campaign did not respond to questions from International Business Times. A Rayonier representative, Roseann Wentworth, told IBTimes it was “entirely appropriate” for the company to have brought on Bush.

“We had in Governor Bush somebody with extensive real-estate experience and experience in the state of Florida where we had so many real-estate interests,” said Wentworth, whose company manages416,000 acres in Florida and runs a factory in one of 29 areas recently flagged by the U.S. Environmental Protection Agency for failing to meet air-pollution standards.

Although Bush stepped down from Rayonier’s board in December, his relationship with the timber company is not the only one that has provoked questions about his proclivities for mixing public and private interests.

While Bush was governor, his administration directed state pension investments to firms that employed top donors to the campaign that elevated his brother, George W. Bush, to the White House. Some of those donors are now contributing to his own campaign. Jeb Bush also pressed state officials to consider investing taxpayer money into a donor’s financial firm. Since leaving office, he has gone on to serve as a board member or adviser to 15 companies and nonprofit organizations, including firms with significant business with the Florida government, such as Barclays PLC, Lehman Brothers Holdings Inc. and Tenet Healthcare Corp. Some of those firms also lobby federal government agencies Bush would supervise were he to win the presidency.

Few relationships better illustrate Bush’s overlapping public and private dealings than the one he forged with Rayonier. The firm is one of the largest landowners in Florida. It lobbies both the Florida andfederal governments.

The connection dates back to 1999, when Bush’s administration helped coax the timber conglomerate into moving its headquarters to Jacksonville from Stamford, Connecticut, with the aid of $2.6 millionworth of state and local tax incentives. Bush and other state officials soon approved a $60 million purchase of 57,000 acres of the company’s land in the northern part of Florida as part of an environmental-preservation deal negotiated by the Nature Conservancy.

In 2001, Bush and other Florida officials backed the proposal to buy the timber rights from Rayonier on a portion of the swampland the state had purchased the year before.

An audit that emerged in 2003 suggested the terms of the two deals had been overly generous to Rayonier. The report from Florida’s auditor general, obtained by IBTimes, said the administration’s appraisals on one of the Rayonier land deals contained “inconsistencies” and “unsupported assumptions” about the potential for development. The report further found the valuations on the timber-rights purchase “contained questionable assumptions related to future timber rights that may not have supported” the price the state paid to Rayonier.

Wentworth, the Rayonier representative, said the company was not concerned by the questions the audit raised about the appraisal process. “It’s part of a normal state auditing process, and due diligence is part of that kind of transaction,” she said.

While he was governor, Bush acknowledged the state often paid a premium in purchasing property. He presented this as a sign that Florida was successfully pursuing public aims while still rewarding property owners.

“When I got elected governor, I thought that private property owners typically got the shaft from the state, that there was an erosion of private property rights,” he said during a meeting to approve the deal for land on which Rayonier held timber rights. “They come up here every other week, and they do real well.”

While the state was directing taxpayer money to Rayonier, Bush was developing political ties with the company. As Bush sought re-election in 2002, his administration was publicly lauding Rayonier’s environmental record. Both the company’s then-CEO, Lee Nutter, and his wife gave the Bush campaign maximum contributions of $500 each. According to emails compiled by the Florida Center for Investigative Reporting, Bush also agreed to solicit a donation from Nutter to Enterprise Florida, the state’s public-private partnership that recommends economic-development strategies. An Enterprise Florida representative said the group has no record of support from Nutter or Rayonier.

Those ties were a precursor to 2008, when Bush was appointed to Rayonier’s board of directors.

Some longtime observers of Florida politics say Bush’s current rhetorical mode, in which he rails against political influence peddling, collides with the apparent reason that Rayonier saw fit to include him within its inner circle.

“You know why people get on boards and why they are sought after, and why he in specific was sought after,” said Ron Book, a prominent lobbyist in Florida’s capital Tallahassee. “People end up on boards because they are people of stature and people of influence, and they are looking for intelligent people that fit that sphere from a profile perspective.”

In Bush’s first year on Rayonier’s board, the company lobbied the U.S. Securities and Exchange Commission to oppose an accounting regulation that would have required timberland to be appraised at “fair market value” on a quarterly basis. The rule was designed to compel companies to more accurately report the value of their property to governments and to ensure that firms are paying required taxes.

While Bush was on the board, the company also raised objections to a Florida clean-water regulation proposed by the federal government. At the same time, Bush served on Rayonier’s audit committee, which helps oversee the company’s financial statements — now the subject of a class-action lawsuit and an SEC subpoena amid claims that the firm misstated its earnings.

Government watchdogs say the former governor must explain how he came to land on the Rayonier board.

“The question that comes to mind is, ‘Is this some sort of payback for the land purchase and the tax breaks?’” said Greg LeRoy, executive director of Good Jobs First, an advocacy group that tracks government development deals nationwide. “The governor should be forthcoming about how this happened and whether there’s a quid pro quo.”