Florida Power & Light dominated the state. Now scandal darkens its future | Nate Monroe
COMMENTARY | Just a 14-minute drive from Florida Power & Light's headquarters in Juno Beach is the easternmost point in the state, where the sun's radiant light first cracks the night sky each morning. The warm light races across a 600-mile expanse of land and coast before finally brightening the Perdido River in Escambia County on Florida's western border.
In May 2018, FPL's sprawling utility empire laid claim to both boundaries, reaching a pinnacle of power and influence rare even among the mega-corporations that call Florida home.
Indeed, the company's future looked bright.
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That month, FPL announced a planned purchase of Gulf Power, expanding its reach for the first time into the Florida Panhandle, and in the process snatching away a lucrative asset from regional rival Southern Company, which had owned Gulf since 1925. With Gulf Power in hand, FPL would serve more than 12 million customers — more than half the population of the third largest state in the country.
In the Northeast corner of the state, a young, first-term Republican mayor in Jacksonville was eager to solicit proposals to privatize city services — none more enticing than the city's century-old municipal utility, JEA, one of the largest public electric, water and sewer utilities in the United States and a prize FPL had long sought.
That same year, a consultant told the Jacksonville City Council that taking JEA private would "likely represent the largest and most complex" transaction of its kind in the United States. But FPL was fixated on JEA; buying it would lock Florida's entire East Coast into FPL's service territory, another bold expansion of FPL's power.
The mayor, Lenny Curry, was ideologically predisposed to privatize a large government agency like JEA, and both the official and political arms of his office were surrounded by friends of FPL. There was no question the company would be the leading bidder almost by default.
Later that year, Floridians would narrowly elect Ron DeSantis governor, the utility's preferred governing partner. In 2020, FPL would help Florida Republicans keep control of the state Senate by contributing to several close races, in the process dispatching one of the few incumbents who was publicly critical of the company.
"We contribute to organizations where we're aligned on what the ultimate goal is, and from the standpoint of having the Senate at the time, who was being led by (Senate President) Wilton Simpson, continue to be able to be led by Wilton Simpson, I was a fan of that," FPL CEO Eric Silagy, recently told me and several other journalists with the Times-Union, Orlando Sentinel and Floodlight in a wide-ranging interview in Jacksonville.
"And we support organizations who had that mission."
Halfway through 2022, however, FPL's fortunes have markedly soured: The company that just a few years ago looked like it held Florida's shimmering coasts in the palm of its hand now faces a future darkened by scandal, embarrassment and uncertainty.
The Florida Panhandle is in revolt over bills that some FPL customers claim are double or triple what they were paying under Southern Company's stewardship of Gulf Power.
The effort to privatize Jacksonville's utility imploded in scandal and recrimination, prompting a two-year federal investigation that resulted in criminal charges against JEA's former CEO and CFO. FPL emerged from that episode empty handed, a particularly punishing outcome in the world of investor-owned utilities, which are locked in a rat race to grow bigger or die.
DeSantis, who is attempting to build a populist profile ahead of a presidential run in 2024, has turned on FPL, having used his veto pen earlier this year to kill one of the utility's highest legislative priorities — a controversial bill that would have limited the growth of the residential rooftop solar industry in Florida.
Such a turn in the political tide could be particularly dire for a regulated company like FPL, whose literal fortunes rise and fall on the decisions made by the Public Service Commission — appointees of the governor who must sign off on any number of high-stakes operational and financial issues for Florida's private utilities, starting with electric rates. And for that reason money spent in the present is almost always justified by the potential future: An election cycle might cost an investor-owned utility millions to meaningfully influence, but failing to do so could cost billions later.
FPL has been ensnared in public scandal over aggressive political tactics that Florida newspapers have laid bare since late last year.
And FPL is taking other public-relations hits that make the once-unstoppable company suddenly look more exposed: Earlier this month, for example, FPL uncharacteristically backed off a winter-hardening proposal that critics alleged could have led to costly customer charges. Skeptics of that plan notably included the Office of Public Counsel, the watchdog group that represents consumers before the Public Service Commission but was thought to have been more friendly to utility interests after the installation of a longtime industry lobbyist in 2021.
FPL's financials remain strong. The regulated monopoly is generally seen as a safe, stable investment, but there is some sign the recent public scrutiny could mushroom into a larger problem for FPL. An analyst at Seaport Global, a capital-markets firm, said recent reporting on FPL has "made us reassess FPL's risks" and that the research firm has "grown uncomfortable" with the "growing media scrutiny of FPL’s lobbying practices against distributed solar and retail choice (deregulation), among others."
"We've heard (FPL parent company NextEra's) management assurances about internal investigations," the analyst, Angie Storozynski, wrote, but "any legal, political or regulatory inquiry into FPL’s conduct would be highly damaging to the stock."
In the remarkably successful years of its ambitious expansionism, secret records show FPL may have also been sowing the seeds of its more uncertain present.
About a decade ago, FPL made the fateful decision to hire Matrix LLC, an Alabama-based political consulting firm notorious in its home state but with little public profile in Florida. Leaked records in the possession of that consulting firm show that Matrix employees worked behind the scenes in cities across Florida for years to advance FPL's interests, sometimes going to extreme lengths to manipulate the political process in the utility's favor.
All of that work was a closely held secret — until recently.
FPL consultants have a messy breakup
While Matrix operatives quietly pulled strings for FPL, strife within their own firm boiled over. The company's owner, Joe Perkins, and its former CEO, Jeff Pitts, parted ways in early 2021, becoming bitter enemies locked in legal battles in courtrooms in Alabama and Jacksonville.
Perkins has alleged in a lawsuit that Pitts led a rogue group of Matrix employees who undertook work on FPL's behalf that he only learned about after Pitts departed — work worth millions in fees. Perkins claims he only became aware of this work after he encountered what appeared to be a damaged hard drive in Pitts' former office and hired an IT team to extract the remains. Going through those tens of thousands of records, he said, alerted him to the extent of work Pitts performed without his knowledge.
Pitts in turn has accused Perkins of defamation and of leaking confidential records to the media.
FPL has echoed Pitts' allegations and called into question the veracity of some of the leaked records, although it has repeatedly refused to provide evidence the documents have been altered in any way. FPL has also said an internal investigation ordered by its board of directors cleared the company's employees of any wrongdoing; it has also refused to provide copies of that investigation.
Perkins has repeatedly denied leaking records, though he has verified the authenticity of numerous records underlying recent stories by the Times-Union, Orlando Sentinel and Floodlight, a nonprofit investigative news outlet.
And additional reporting since last year has made it clear the leaked Matrix records contain legitimate information.
Matrix records paint unflattering portrait
Taken together, the internal Matrix records depict a group of well-resourced executives and their enablers who have nurtured twisted views of the First Amendment and American democracy, and who have little hesitation over going to remarkable — and troubling — lengths to achieve their goals.
The records also demonstrate that secrecy is no substitute for sophistication or savvy: Some of Matrix's tricks did little to improve FPL's business prospects and, in fact, have now served to humiliate the utility — like Silagy's use of a pseudonym email account belonging to a fictitious "Theodore Hayes" to communicate with Matrix employees (a tactic detailed in the leaked Matrix records that both FPL and Silagy himself confirmed took place).
The Matrix records show:
• Matrix consultants had little regard for the professional press.
The consultants pitched and supported tactics designed to embarrass individual reporters who they believed had crossed their client's interests. In at least one case, they had this Times-Union columnist surveilled, according to the secret records.
• To work around the independent, traditional media, former Matrix employees took a more direct route to influence the public narrative about Florida Power & Light.
FPL's former consultants orchestrated a financial takeover of a small Tallahassee-based political news site with a conservative bent that allowed the utility's highest executives to weigh in with editorial decisions, the internal Matrix records show.
That effort culminated with a Matrix employee signing an option agreement to purchase a controlling stake in The Capitolist in September 2019, the records show. Run by a former Rick Scott spokesman, Brian Burgess, The Capitolist often focused criticism not on powerful industry players or politicians but on individual journalists at publications like the Miami Herald, Palm Beach Post and Times-Union that had crossed the interests of one of the state's large corporations, like FPL.
In one case, at the suggestion of Silagy, FPL's CEO, Burgess included in a newsletter a photoshopped image of the Herald's Tallahassee bureau chief, Mary Ellen Klas, as a pauper begging for money. FPL has long despised Klas' hard-hitting coverage of the company.
In a 2020 email, Burgess wrote a former Matrix employee with an idea they could "cobble together however many millions of dollars it would take to buy ALL the Florida newspapers from Gannett and then we could let most of the clown reporters go, save a fortune, eliminate print, and syndicate content across the entire state."
"We could even do it stealthily so we could inject content into all those publications and nobody has to know who's actually pulling the strings," he wrote.
The email was forwarded on to Silagy, though there is no indication the company seriously entertained Burgess' idea. And Burgess himself seemed to recognize it was an unlikely proposal, lamenting that "they are such douchebag newspaper people they added the poison pill to prevent ahostil [sic] takeover, even if it costs them hundreds of millions in stock value" (it's not clear in his email what the alleged "poison pill" is supposed to have been).
• The financial entanglement between FPL and The Capitolist dated back to 2018, records leaked to the Miami Herald show, when an FPL vice president suggested the website publish a critical piece on DeSantis' Democratic opponent, Andrew Gillum. Hours later, a story like the one the executive pitched appeared on The Capitolist. “Promote the @&;$&!!! Out of this,” the FPL executive told Burgess, according to the Herald.
• Before the prospect of JEA had even been formally proposed, Matrix employees were planting seeds intended to undermine public confidence in the Jacksonville agency, potentially as early as 2017.
A short-lived organization called "Fix JEA Now" registered a web domain in 2017 and began making dramatic claims about the city-owned utility. "JEA is broken," the group boasted on its website, where it posted Times-Union coverage of the utility's involvement in an over-budget, behind-schedule nuclear project in Georgia. The nuclear project was part of what the group deemed a "record of failure," rhetoric that bore a remarkable similarity to the talking points later used by the mayor and privatization supporters to justify selling JEA.
The records show that entities controlled by the former Matrix employees, and associated in an internal ledger with FPL, financially backed an intermediary who had arrived in Jacksonville to help set up Fix JEA Now.
• Later, in 2019, when JEA executives were preparing to announce their intention to put the agency up for sale, Matrix employees drew up another radical idea.
They proposed offering a job to Garrett Dennis, a member of the Jacksonville City Council who had been outspoken against selling JEA. The job was to be with a shell nonprofit created by Matrix employees that supported marijuana decriminalization and, on its face, had no connection to FPL. And the job was to come with one key hitch: To accept it, Dennis would have to leave his council position.
FPL has acknowledged it received the idea but insists the company immediately rejected it. But Dennis, in an interview last year, recalled receiving a job offer with remarkable similarities to the one outlined in the internal Matrix documents.
• FPL has repeatedly denied any involvement in the "ghost candidate" controversy stemming from the 2020 election cycle, but Matrix records show the company's consultants were deeply involved.
Reporting, primarily by the Orlando Sentinel, showed spoiler candidates in three state Senate races in 2020 were propped up by at least a half-million dollars from dark-money groups in an effort to help damage the Democrats in those races and help Republicans control the chamber. Those dark-money groups were controlled by former Matrix employees, the records show.
One of those Democrats, Sen. José Javier Rodríguez, happened to be both a prominent member of his party and an incumbent FPL particularly despised.
FPL remains defiant
The ghost candidate controversy set off a wide-ranging criminal investigation by prosecutors in Miami, who secured a guilty plea from the independent candidate in District 37 and filed felony charges against Frank Artiles, a former Republican lawmaker accused of bribing the candidate to run. Artiles pleaded not guilty.
Neither FPL executives nor the consultants identified in the secret records have been accused of wrongdoing in that investigation.
FPL has complained bitterly about the news coverage of the leaked records, and there is little indication its parent company, NextEra, is reflective about what the records have to say about the involvement of its largest subsidiary and its highest-level executives.
During an investigation by this newspaper, as well as the Sentinel and Floodlight, FPL became at least vaguely threatening about our decision to continue reporting.
“We understand this may mean you’ll continue your campaign to smear FPL or our employees,” FPL spokesperson David Reuter told us in the last communication between the company and our reporting team. “That is your choice, but rest assured, we will hold you accountable if that continues to happen. I’ve also .cc’d Gera Peoples on this note. As you may know, Gera is NextEra Energy’s Vice President and Chief Litigation Officer. He is a former federal prosecutor with experience in public corruption cases.”
The string of controversy spans nearly the entire Florida Peninsula — already an impressive trail of dirty tricks. But one thing the leaked Matrix records make clear is that more secrets remain on the firm's hard drive.
A note of gratitude to our friends at the Orlando Sentinel and Floodlight News, with whom we have worked in partnership to report our stories. And an additional kudos to the Miami Herald for its own story on the latest batch of leaked Matrix records, which can be read here.
Nate Monroe is a metro columnist whose work regularly appears every Thursday and Sunday. Follow him on Twitter @NateMonroeTU.
This article originally appeared on Florida Times-Union: Florida Power & Light once dominated, now humbled by scandal |Nate Monroe
