Water managers to U.S. Sugar: Disclose payments to lobbyists, execs

By PAUL QUINLAN

Palm Beach Post Staff Writer

Thursday, March 12, 2009

CLEWISTON — South Florida water managers want U.S. Sugar Corp. to disclose any "success fees" attached to its pending sale of 180,000 acres of farmland to the state.

The demand comes amid a crescendo of rumors circulating among opponents of the sale that a cabal of U.S. Sugar executives, lawyers and lobbyists stand to collect multimillion-dollar bonuses and "golden parachutes" should the taxpayer-funded, $1.34 billion land deal close.

U.S. Sugar denies the rumors. "There are no success fees associated with this deal," said spokeswoman Judy Sanchez.

In June, Gov. Charlie Crist proposed buying the New York City-size swath of land south of Lake Okeechobee that Everglades advocates have long considered critical to the ecosystem's restoration. But critics, including U.S. Sugar competitor Florida Crystals and Glades-area leaders who fear staggering job losses, call the deal an overpriced bailout for a well-connected agro-giant suffocating under massive debts and declining profit margins.

Leaders of the South Florida Water Management District, the state agency set to finance the purchase, directed staff today to ask for the more detailed disclosure in a letter to U.S. Sugar's board.

"I'm troubled by it because I continue to hear rumors and have no basis to know whether they're true or not," said board member Jerry Montgomery, a Disney executive, who raised the issue. "It's a simple question that requires plain speak and plain answers."

U.S. Sugar's Sanchez called the rumors "absolutely untrue."

No one outside the company would be paid based on a successful sale, she said. Within the company, if U.S. Sugar's board were to decide to make special payments to top executives in connection with the sale, those payments would be publicized in documents released prior to the deal's final closing, Sanchez said.

So-called success fees became a subject of controversy at the district in 2007, following federal prosecutors' revelations that former County Commissioner Warren Newell and a business partner had gained an undisclosed $2.4 million share of the proceeds from a $217 million land deal between the water managers and a Loxahatchee rock-mining company.

Both the district and the mining company said they had no idea Newell was receiving money from the deal. Newell is now serving a five-year prison sentence for corruption.

It's unclear whether the district's new request carries legal weight.

U.S. Sugar already filed an affidavit required under new water district rules established to guard against corruption that lists all individuals who stand to gain from the deal.

Among the hundreds of U.S. Sugar shareholders listed are 31 executives' names marked with cryptic asterisks - which Montgomery spotlighted today.

"I think we have to ask more specific questions relative to those employees who are asterisked," said Montgomery.

Sanchez said the asterisks signify executives whose jobs carry compensation packages that could yield one-time payouts at the discretion of U.S. Sugar's board. She reiterated that any payments tied directly to the land deal's closing would be disclosed in advance.

Montgomery's call won unanimous support from fellow board members.

"The present system that we're working under encourages a lot of innuendo, a lot of speculation, a lot of rumor," said the board's Charles Dauray, from Lee County. "And that's no way to treat $1.34 billion of the public money."