(Editor’s Note: A previous version of this commentary in print and on OrlandoSentinel.com contained outdated information.)
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We could barely contain our astonishment after reading the leaked grand jury report concluding that Gov. Ron DeSantis and his political allies stole, purloined, misappropriated, or embezzled (all four words were used in the report) $10 million from a settlement meant to reimburse Florida’s citizens for Centene Corporation’s Medicaid overbilling scheme. Medicaid provides health care to poor people. So whichever verb best describes the brazen caper — the grand jury settled on “misappropriated” – it was the poorest citizens who suffered the most. We have never heard of a prosecutor giving grand jury targets “get out of jail free” cards because none of the conspirators confessed. But that’s what happened. The grand jury said it couldn’t charge anybody because nobody confessed.
The Hope Florida Foundation, a tax-exempt charity set up to help those same poor people get back on their feet without state welfare, is featured prominently in the report. The $10 million owed to the State was instead “donated” at the governor’s behest to Hope Florida. The grand jury describes first lady Casey DeSantis as Hope Florida’s “champion”. The report says that a few days after the “donation,” Hope Florida made “grants” of about $5 million each to two other tax-exempt organizations and those organizations “funneled” their separate donations to DeSantis’ then-Chief of Staff (now Attorney General) James Uthmeier’s political action committee, where it was used to defeat a ballot initiative that would have de-criminalized marijuana. Uthmeier, described as the person with “authority over those involved” in diverting the money, was never called to testify. He recently threatened criminal charges against a reporter who had the temerity to ask him about the grand jury report.
If punishment is only appropriate when perpetrators confess, then Hope Florida should be punished. Because Hope Florida’s 2024 publicly available tax return includes a clear confession that it violated Section 501(c)(3) of the Tax Code. That provision prohibits Hope Florida from engaging in “substantial” lobbying. Whether a lobbying amount is substantial can be determined by comparing the percentage of an organization’s revenue spent on lobbying with its total revenue. Hope Florida took in $11,187,210 according to its tax return. The grand jury found, and the tax return confirms that Hope Florida funneled $10,211,215 to Uthmeier’s political action committee. Uthmeier’s PAC spent the money to lobby against legalized marijuana. In other words, Hope Florida spent more than 91% of its 2024 revenue on grassroots lobbying against legalizing marijuana. Nobody would call 91% insubstantial. And Hope Florida confessed to it all, on its tax return.
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A 501(c)(3) that violates the prohibition against substantial lobbying is liable for a penalty tax equal to 5% of the amount spent on substantial lobbying. Board members or foundation managers who knowingly approved are also personally liable for a 5% penalty. The grand jury report identifies Joshua Hay, Hope Florida’s Board Chairman and Jeff Aaron as the people who approved funneling $10 million to Uthmeier’s lobbying effort. Finally, the substantial lobbying violation means that Hope Florida did not qualify for tax exemption in 2024. As a result, the corporation must pay the 21% corporate tax on its $11 million in revenue. That would be about $2.3 million Hope Florida owes in federal taxes in addition to the penalty taxes. And it needs to repay the $10 million indisputably misappropriated, stolen, purloined and embezzled from the Free State of Florida.
Darryll K. Jones is a professor and Mark Dorosin is an associate professor at Florida A&M University College of Law.