State Politics

Florida’s departing fiscal watchdog used public scrutiny as a weapon

Jeff Atwater, Florida’s chief financial officer, addresses the Greater Miami Chamber of Commerce Trustee Luncheon at Jungle Island, January 10, 2017.
Jeff Atwater, Florida’s chief financial officer, addresses the Greater Miami Chamber of Commerce Trustee Luncheon at Jungle Island, January 10, 2017. pportal@elnuevoherald.com

For all the talk of shrinking government and making it work like a business, there is one man in Tallahassee who knows exactly why that talk is folly.

Chief Financial Officer Jeff Atwater, who stepped down as CFO on Friday after serving 17 years in state government, the last of which as the state’s fiscal watchdog, knows where every penny of the state’s $83 billion budget goes. He also knows where to find the waste — and he’s tried to expose it.

Florida will spend more than $60 billion this year hiring outside contractors to do state work. But, as Atwater found when he took the job in 2011, state agencies often don’t hold vendors accountable for the services they agreed to provide. Agencies allow them to charge for things not included in the bids, fail to recover damages when the vendor won’t complete a task correctly or on time, and renew contracts when a vendor fails.

“You don’t have to go far to track that back to a lobbyist who had a client,” Atwater explained.

In other words, unlike a business, Florida government gets lobbied. Companies big and small, nonprofit and public, hire lobbyists to use political influence and cozy relationships to give them an advantage in the contracting process. Working in silos, agencies make billions in financial decisions using a patchwork of inconsistent standards, often with little oversight, and the process costs taxpayers.

Atwater, whose office pays the bills, made it his mission to try to change that — by exposing the state’s expenses to the sunlight and posting all state contracts online.

The effort won national awards, saved taxpayers millions and made transparency in contracting the new Florida standard. It is the lasting legacy of his nearly two decades of public service that spanned from a stint on the North Palm Beach Village Council to the Legislature and executive branch. But the intransigence of a slow-moving bureaucracy and the influence of a powerful lobbying corps hired by corporate interests have stymied Atwater from achieving even more success.

Atwater pins Patronis
Outgoing Chief Financial Officer Jeff Atwater pins the state fire marshal badge on his successor, Jimmy Patronis, as Patronis’ son, Theo, looks up. Steve Bousquet Tampa Bay Times

Atwater, 59, retired to become vice president of initiatives and CFO at Florida Atlantic University. In an interview with the Herald/Times last week, he outlined what more needs to be done to make state government work more effectively and why he believes Florida’s sunshine laws are essential to protecting taxpayers’ millions.

Florida has “some of the most advanced sunshine laws and public disclosure laws in the country” and, rather than weaken them, he said they “should absolutely be protected” because they allow for the public to trust their government.

“Transparency makes us better because we understand that the very people we have asked for this privilege will evaluate us without any hindrance,” he said.

“Would I have preferred not to fill out a financial disclosure form? Absolutely. But if that allows the public to know that there is nothing within those documents that they would ever wonder if there is any decision I was making, based upon what I might gain from that, then that outweighs the inconvenience and effort to express that.”

A former banker who was elected CFO after serving in the Legislature for 10 years, including as state Senate president, Atwater has spent a career carefully picking his battles while also not being afraid to mount a fight.

Transparency makes us better because we understand that the very people we have asked for this privilege will evaluate us without any hindrance.

Florida CFO Jeff Atwater

He helped install a system that capped annual rate increases at state-run Citizens Property Insurance Corp. at 10 percent and pushed for insurers to lower rates in the wake of reduced reinsurance costs. He backed legislation last spring to protect consumers against surprise medical bills from emergency care, and ordered life insurers to use the U.S. Social Security Administration’s Death Master File to pay on policies dating back to 1992.

He pushed back against Gov. Rick Scott when the governor attempted to dictate the appointment of the state’s insurance commissioner, and he stood his ground after the governor unilaterally decided to replace Gerald Bailey as head of the Florida Department of Law Enforcement in 2014 without public discussion or a vote.

“He brought the position of CFO into transparency and openness,” said Mike Fasano, Pasco County tax collector and former state senator who served with Atwater. “He was able to do that when special interests, the Legislature and the governor were fighting him every step of the way. And he does that in such a gentleman-like manner.”

It was Atwater’s time in the Legislature that helped inform his perspective on the power of the special interests in manipulating the multi-billion dollar enterprise of state government.

As Senate president, he watched as the most powerful Tallahassee lobbyists quietly tucked provisions into the finished budget to favor their clients through so-called budget “proviso” language. He confronted budget staff and asked how provisions that were intended to help medical device companies, charter school companies and transportation contractors arrived in the budget language without any public debate or hearing.

“I’d say, did the agency want this? No? Then who did want this?” Atwater recalled in a 2013 interview with the Herald/Times. “They’d throw out the name of a lobbyist, and so I’d cross it off. And cross it off and cross it off.”

When he got to the CFO’s office, tracking the trajectory of millions of dollars of murky contracts wasn’t any easier.

He brought the position of CFO into transparency and openness. He was able to do that when special interests, the Legislature and the governor were fighting him every step of the way.

Mike Fasano, Pasco County tax collector and former state senator

The independent Public Interest Research Group gave the state a “D” grade for transparency in spending on its “Following the Money” report, ranking Florida 36th in the nation.

Outraged at the loss of accountability and what he considered the potential for waste, fraud and abuse, Atwater launched a crusade to increase transparency in the contracting process and require more audits of the financial deals.

He knew he couldn’t stop payment on the sketchy contracts — only the Legislature can control spending decisions — but he could to turn the public into watchdogs and invite more competitors to the table.

IMG_FYG05_Fraude_News_rk_2_1_GI2UD4KI_L73279336
Florida CFO Jeff Atwater speaks during a news conference, Feb. 4, 2014 in Miami, where Miami-Dade State Attorney Katherine Fernandez Rundle announced that 22 people had been charged in a major home insurance fraud ring operating in South Florida. Roberto Koltun rkoltun@elnuevoherald.com

In 2012, he created the Florida Accountability Contract Tracking System, also known as FACTS, that allows the public to search for more than 856,000 individual contracts, grants and purchase orders.

He increased contract auditing, created a process to train agencies that manage contracts greater than $100,000 and persuaded the Legislature to pass a law that specified that for the first time competitively bid contracts must be awarded to the vendor with the lowest bid.

His goal, he said, was to level the playing field for business owners who want to bid for state business and reduce the opportunity for “back-door deals done far away from inquiring minds.”

But the infusion of state cash into outsourced contracts created its own obstacles to reform. The growing industry of lobbyists who build relationships with executive agency officers so they can steer contracts to their clients resisted change.

“If you have a choice between hiring a legislative lobbyist or an executive branch lobbyist, you get a really good executive branch lobbyist because that’s where the money is,” said Don Gaetz, former state Senate president from Niceville, who championed Atwater’s attempts to strengthen the CFO’s oversight.

But even with Gaetz’s support, Atwater struggled to get his initiatives through the Legislature, whose political committees can accept unlimited cash contributions from the same companies that want to influence the $60 billion procurement process.

In 2012, Atwater tried and failed to transfer authority over the state’s contracts from the governor’s Department of Management Services to the Department of Financial Services, his agency — a feud Gaetz called a “turf battle” with the office of the governor.

While the Legislature authorized all the governor’s agencies to post their contracts on the FACTS website, it excluded the other Cabinet offices of attorney general and agriculture commissioner.

In 2013, Atwater returned, this time asking for additional oversight, the authority to train contract negotiators and the power to demand that images be supplied so it can be posted on the public website. The Legislature passed a measure to require private contractors who receive state contracts to be subject to the same public records requirements as a public agency and imposed accountability provisions that allowed the state to get money back from contractors who fail to perform.

Now, the site includes contract audits, grant award information and even scans of the actual contracts executed by all state agencies. The changes have produced results.

In 2012-13, 55 percent of the 898 contracts that were reviewed were deficient — meaning they failed to meet the terms of the contract by not delivering on the goods or service in the time or cost required. By 2016-17, the deficiencies found in contracts dropped to 18.2 percent, and contract managers across state government were better trained.

Atwater’s office estimates that because of the transparency at least $40 million in taxpayer money has been saved from renegotiated or more competitive contracts. And in the first year after FACTS arrived, PIRG’s “Following the Money” report gave the state an “A” grade for financial transparency, a grade Florida has received every year since.

Agencies are “now proud of their contract managers and they are willing to have their work scrutinized,” Atwater said. “Everyone understood no one is going to have to track this down with a records request. ... You can bet if this looks like a giveaway to a lobbyist friend, that is going to eventually be exposed.”

But, Atwater acknowledged last week, “it’s not enough.”

“This was a first step to make sure the markets and the taxpayer could have access to information to hold us accountable,” he said. “But now comes the chance to really measure the quality of each of those performance measures.”

He says the Legislature continues to use backroom provisions in the budget process to give advantages to some vendors.

“I’m not opposed to a legislature asserting a request upon an agency,” Atwater said. “It just should be done in the sunshine and it should be the expectation that there isn’t a provider yet.”

He also wants to see the performance measures used to produce better quality service for taxpayers.

“It’s not enough to just say I commit to creating 12 internships. What was the quality of that internship? What was the quality of that after-school care? What was the quality of that senior home care experience?” he asks. “I’m hoping that the scrutiny will continue to get deeper and deeper into the quality of the contract itself.”

He continues to advocate for a law that would give the CFO’s office the authority to review contracts before the state commits to them, and he wants to see tougher penalties for when vendors fail.

“It is one thing to slip somebody with a $1,000 fine on a $10 million contract, but that’s not going to get anybody’s attention,” he said. “When you’re talking about a Department of Corrections, or public safety and the education of our children, the consequence to me should be: You’re not participating anymore.” 

But Atwater is also realistic about the limits of his agency’s scope.

“Under our present arrangement, no matter what the dollar size is, I am watching. I am not able to engage,” he said. That’s where the role of the state’s sunshine laws and a scrutinizing public play a role, he said.

“I know nobody wants to sit up and read FACTS at night,” he said. “But if there is a hungry competitor that wants to read a contract, they will now have the access to that contract and ... if it’s not written in the way it should be, if it’s not the best effort for the person getting the services, I hope they will pick up the phone and call the local newspaper, the local television station and expose deficiencies when they see it.”

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