On a thirsty tract up in Clay County, some savvy businessmen pulled off a nearly magical act of hydraulic engineering. They converted hundreds of acres of dry piney woods into an extremely profitable wetlands mitigation bank. And they did it without water.
How did the folks behind the not-so-wet Highlands Ranch Mitigation Bank do it? They hired an influential lobbyist. They leaned on the Department of Environmental Protection and the St. Johns River Water Management District to get rid of pesky regulators who saw the purported wetlands as mostly a mirage.
When state regulations governing mitigation banks didnt jibe with its business plan, Highlands Ranchs corporate counsel simply dropped by DEP headquarters and rewrote the rules.
Highlands Ranch demonstrated, in brazen fashion, that Gov. Rick Scotts administration was much more keen on boosting well-connected businesses than enforcing those nuisance laws protecting whats left of Florida wetlands.
His political appointees at DEP happily abided the unwet wetlands bank. Things seemed to be going swimmingly perhaps the wrong word until Thursday, when a state administration judge threw water on the scam.
Mitigation banks were conceived as a market-driven solution to the destruction of wetlands. Mitigation bankers buy up former swampland, restore it to wetlands. Regulators from DEP or local water districts then employ the state formula for awarding mitigation bank credits. Developers who plan to drain wetlands elsewhere buy those credits from the banks, making it, at least in theory, an even swap an acre of restored wetlands for every acre lost to development.
In 2008, a group of investors paid $15 million for an 1,575-acre pine plantation southwest of Jacksonville and claimed they were recreating wetlands worth 688 credits. (A single credit has a market value of about $100,000). Except that regulators from St. Johns River Water Management District figured the actual value was only 193 credits. Highlands Ranch appealed the finding and lost. And then tried to convince the state Legislature to loosen the damn rules that require water on wetlands. That didnt work either.
So, according to the Tampa Bay Times, the company hired a lobbyist who was tight with Scotts very corporate friendly DEP Secretary Herschel Vinyard Jr. Thats how you get things done in Florida.
Pretty soon, Deputy Secretary Jeff Littlejohn (who just happens to be the son of another powerful Tallahassee lobbyist) reconfigured the formula DEP had used to score credits. He admitted that the new rules were actually written by the corporate counsel for Highlands Ranch.
With new and friendly regs in place, Highlands Ranch did an end-run around the St. Johns River Water District and submitted a new application directly with DEP, this time asking for 426 credits.
Scientist steps in
It was a nearly perfect scam. Except the DEPs top wetlands expert wouldnt play along. Career scientist Connie Bersok decided the mostly dry wetlands were only worth 177 credits. Littlejohn ordered her to come up with a number close to what Highlands Ranch wanted. Last May, she responded in a memo: I hereby state my objection to the intended agency action and refusal to recommend this permit for issuance.
Two days later, Bersok was suspended. Just a coincidence, DEP insisted. Except the DEP Inspector General examined the charges against Bersok and found them groundless: There was no documentation or testimony to substantiate any violations by Bersok. She was reinstated after four weeks off the job, but DEP kept her off the Highlands Ranch case.
Meanwhile, two regulators at the St. Johns River Water District who just happened to have undercut Highlands Ranchs case for all those undeserved credits were forced to resign. Another coincidence, I suppose.
With Bersok off the case, DEP awarded Highlands Ranch 424 credits good for an extra $25 million over her original calculation.
Except the Florida Wildlife Federation challenged the permit. Administrative Judge E. Gray Early, who held a hearing last fall, issued his findings Thursday. Judge Early noted the peculiar and unprecedented actions that DEP had taken to accommodate Highlands Ranch, including the decision to hijack the case from the water district and to rewrite the regulations using only the input of the Highlands Ranch counsel, offering no opportunity for other views, either in favor of or in opposition.
He noted that the DEP officials, during the hearing last fall, had been unable to identify who in the Department calculated the [mitigation bank] credits which just happened to add up to just two credits short of what Highlands Ranch had demanded.
The regulator DEP had removed from the case had a much better memory. Ms. Bersoks opinions were based on competent and substantial evidence, including the complete application and sufficient knowledge of the conditions of the property, the judge said.
He said that even under the rewritten and very permissive regs designed by Highlands Ranchs own lawyer, DEP should have capped the credits at 280. Judge Early stopped this desiccated wetlands scam, thanks to the testimony of a brave state regulator who stood up to her political appointee bosses.
A lousy deal was derailed, but the Highlands Ranch case demonstrates, with dismal clarity, the Scott administrations enthusiasm for protecting Floridas environment.