By Dan Christensen, BrowardBulldog.org
Before he was governor, Rick Scott, left, funneled stock options worth $375,000 to then Broward Sheriff Ken Jenne
Kimberly Kisslan’s sudden resignation from Broward Health’s governing board two weeks ago followed news of her immunized testimony in the 2007 corruption case that brought down Broward Sheriff Ken Jenne.
Since then, Gov. Rick Scott, who appointed Kisslan in July, has refused to answer questions about the matter or explain why a state background check failed to uncover Kisslan’s involvement in Jenne’s criminal scheme. Kisslan was BSO legal counsel under Sheriff Jenne.
Scott, however, has a little-known reason for not wanting to talk about Jenne. The governor and the convicted felon are old friends and business associates.
“I’ve just known (Scott) for years and years and years,” Jenne told this reporter in 2005.
Scott was a wealthy private investor in April 2003 when he funneled hundreds of thousands of dollars Sheriff Jenne’s way by recommending him for a lucrative seat on the board of directors of CyberGuard, a Deerfield Beach computer security company. At the time, Scott owned nearly 40 percent of CyberGuard’s stock.
Less than three years later, California-based Secure Computing bought CyberGuard for $295 million in stock and cash. Cyberguard’s annual report made public a few weeks after the announcement listed Jenne as the beneficial owner of 42,555 CyberGuard shares valued at $375,000 under the terms of the deal.
Jenne acquired most, if not all of those shares via stock options he received for serving on CyberGuard’s board.
CyberGuard’s core business was building and selling digital firewalls to shield computer networks from intruders. Its “target customers,” according to U.S. Securities and Exchange Commission records, were “companies, major financial institutions and government entities.” Cyberguard did not identify specific clients.
Why Scott wanted Jenne on CyberGuard’s board is not known, and neither the governor nor Jenne would comment for this story. Jenne, who went to prison for mail fraud and not disclosing benefits he received from BSO vendors on his income tax returns, previously said CyberGuard was not a BSO vendor.
SCOTT BUYS A STAKE
Richard L. Scott, as the governor was known before he ran for office, made his initial investment in Cyberguard in August 1999 via Fernwood Partners II, which acquired $3.7 million in company debt, according to SEC and other records. Fernwood was a Delaware firm that bought, sold and invested in the stock and debt of other companies. Scott and his wife, Annette, were major equity shareholders in Fernwood.
As part of the deal, CyberGuard added Scott’s brother, William Scott, and former Columbia/HCA Healthcare executive David Manning to its board of directors. Gov. Scott was Columbia/HCA’s chief executive until 1997 when he resigned amid a federal Medicare fraud investigation.
Fernwood went on to acquire nearly 50 percent of CyberGuard before it was dissolved and its holdings distributed to its members in March 2003, SEC records say.
With that, Scott became CyberGuard’s largest individual shareholder. By August 2005, when Secure Computing announced it would acquire all of Cyberguard’s shares, Scott owned 8,249,597 shares worth $72,356,000 in cash and Secure Computing shares, according to SEC records.
Scott’s total investment in Cyberguard: about $10 million, the records indicate.
“When I initially made my investments in Cyberguard, I felt Cyberguard had superior products in the firewall industry,” Scott said in the press release that announced approval of the takeover by Cyberguard’s shareholders. “What was accomplished over the last five years is a testament to the management team we put in place and their commitment and focus.”
Scott kept nearly 4 million Secure shares when he joined Secure’s board after the transaction was completed in January 2006. He was briefly chairman before computer giant McAfee bought Secure in a $462 million cash deal in 2008. Scott walked away with $23 million.
INVESTMENT PARTNER RUNS SCOTT’S ‘BLIND TRUST’
SEC records identify Scott crony Alan L. Bazaar as another member of Fernwood Partners in the CyberGuard investment.
For a decade before Scott was elected governor, Bazaar helped manage his portfolio at the better-known Richard L. Scott Investments LLC. Today, as co-CEO of New York’s Hollow Brook Wealth Management, Bazaar oversees the “blind trust” established by the governor in 2011 to avoid conflicts of interest and manage much of his large personal investment portfolio.
Lobbyist William Rubin with Gov. Rick Scott Photo: Tampa Bay Times
Serving with Scott and Jenne on Cyberguard’s board was Fort Lauderdale lobbyist William D. Rubin, a longtime friend and political supporter of both men. Rubin was listed in SEC records as having 58,000 CyberGuard shares worth $510,000 in cash and stock.
In 2003, while together on CyberGuard’s board, Sheriff Jenne made Rubin an “honorary deputy sheriff.” He also bestowed a BSO “Friend of Children Award” on a lobbyist in Rubin’s firm, Noreen Reboso.
The Tampa Bay Times quoted Rubin about his friendship with Scott on the day of Scott’s election in November 2010.
“I got to know Rick in 1991 when he started his hospital company, and we’ve stayed close ever since. I love him,” said Rubin, who in 2009 lobbied in Tallahassee on behalf of Solantic, Scott’s walk-in clinic company. “He’s a very good friend. We’ve stayed in touch ever since.”
Rubin added that he would not benefit from Scott being in the Governor’s office. “I won’t be. I’ll quickly dispel that perception.”
Nevertheless, Rubin is today registered to lobby Scott and the Executive Branch on behalf of nearly 60 corporate and government clients, including Scott’s old firm, now called HCA Healthcare, and BSO under Sheriff Scott Israel.
Rubin did not respond to a request for comment.
Knowledgeable sources have said privately that they believe Rubin and/or Jenne prevailed upon Scott to appoint Sunrise City Attorney Kimberly Kisslan to the board of the North Broward Hospital District, also known as Broward Health, but there is no evidence to support it.
KISSLAN RESIGNATION TRIGGERS QUESTIONS
Kisslan resigned Oct. 18 – three months into her four-year term and two days after BrowardBulldog.org reported about her grand jury appearance under a grant of immunity.
Kisslan got into trouble with federal prosecutors due to personal legal work she did for Jenne while he was sheriff. Specifically, she and a BSO vendor coordinated the demolition of an old house with code compliance issues that Jenne owned in Lake Worth.
At the same time, Kisslan was negotiating a BSO lease extension with the vendor – quickly signed by Jenne – that called for the police agency to lease additional office space from him at a cost of $348,000.
The vendor, developer Philip Procacci, later paid the $8,130 demolition cost for Jenne and the matter became part of the corruption charges to which the sheriff pleaded guilty in September 2007.
Kisslan’s role in Jenne’s scheme is spelled out in public court documents filed at the time of his plea. Yet despite a background check, Gov. Scott was unaware of that damaging information when he installed Kisslan on Broward Health’s board, said spokesman John Tupps.
The governor’s office declined to discuss the vetting process for gubernatorial appointees.
There is, however, an intriguing Broward connection inside Scott’s Executive Appointments Office that dovetails back to both Jenne and Rubin.
Former Fort Lauderdale resident Carrie O’Rourke is the governor’s $116,000-a-year Director of External Affairs. Her duties include oversight of gubernatorial appointments.
From 2007-2009, O’Rourke was director of organizational development in Fort Lauderdale for Edify, LLC. That’s the health benefits consulting firm whose owners included convicted Ponzi schemer Scott Rothstein.
Jenne worked at Rothstein’s law firm after his release from prison in 2008. And in September 2009, New Times reported that Edify paid Jenne’s son, former State Rep. Evan Jenne, $30,000 as a consultant.
As finance director for Scott’s inaugural committee, O’Rourke worked with Rubin and his lobbying firm, The Rubin Group, to select candidates for the governor’s transition healthcare team.
In December 2011, as the governor’s deputy chief of staff, O’Rourke traveled to Israel with Rubin and his wife Lys as part of a 48-member trade mission delegation led by Gov. Scott, according to Sunshine State News.