DeSantis Business Battles: Disney, Covid, Taxes, ESG

Florida Governor Ron DeSantis delivers remarks during the Heritage Foundation 50th Anniversary Leadership Summit at the Gaylord National Resort & Convention Center on April 21, 2023 in National Harbor, Maryland.

Anna Moneymaker | Getty Images

Florida Governor Ron DeSantis officially kicked off his presidential campaign on Wednesday, putting his mix of pro-business conservatism and culture-war populism to the national test.

DeSantis, 44, has filed campaign materials and is set to announce his candidacy for the Republican presidential nomination on Twitter, during a live chat with Elon Musk scheduled for 6 p.m. ET. The announcement will cement DeSantis as the primary Republican rival to former President Donald Trump, who holds a consistent lead in the primary field polls.

DeSantis worked to establish himself as a champion of economic growth even before pushing to quickly lift Covid lockdown policies in the name of revitalizing Florida’s struggling businesses. He has since taken credit for the state’s low unemployment rate, growing population, and economy that outpaces the national average.

At the same time, he embroiled himself in a political battle with some of his state’s top employers, including disney — and signed legislation targeting private business practices, some of which have since been blocked in court.

DeSantis apparently sees no contradiction between his pro-business posture and his authoritarian governance. “Corporatism is not the same as free enterprise,” he said in a speech last September, “and I think too many Republicans have taken limited government to mean basically that what is best for American business is how we want to do the economy.”

But some experts have expressed skepticism that the governor is walking a tightrope.

“The Disney case kind of illustrates that tension in DeSantis as a candidate,” said David Primo, professor of political science and business administration at the University of Rochester. “There’s this hydra-like element to what he’s trying to do.”

A pending campaign spokesperson for DeSantis did not immediately respond to CNBC’s request for comment.

The rise of DeSantis

DeSantis himself has little business experience. A lawyer trained at Yale and Harvard, he joined the Judge Advocate General’s corps of the US Navy and served at Guantanamo Bay and in Iraq. He worked as a lawyer after his active duty ended in 2010, and in 2012 was elected to Congress. Once there, he quickly established himself as a member of the far-right Tea Party movement.

DeSantis was the primary sponsor of 52 congressional bills, none of which became law, Spectrum News reported. One of them was the “Drain the Swamp Act,” which sought to give effect to Trump’s campaign slogan by tightening lobbying bans imposed on public officials after they left government service.

A founding member of the conservative House Freedom Caucus, DeSantis also introduced legislation that would remove the payroll tax for Americans of retirement age, and he backed another bill to replace most federal taxes with a national sales tax. Critics say such proposals, which have cropped up in Congress again this year, would weigh on low- and middle-income Americans.

DeSantis resigned from Congress to run for governor in 2018 and, buoyed by Trump’s endorsement, narrowly defeated Democratic challenger Andrew Gillum. DeSantis’ aspirations for higher office were evident among his loyalists that same year, Politico reported.

“He seemed like a traditional Republican — pro-business, very conservative on social and economic issues,” said J. Edwin Benton, professor of political science at the University of South Florida.

“And all of a sudden he had the ambition to be president. And to do that, he knew he had to carve out a place for himself.”

Covid Breakthrough

Florida Governor Ron DeSantis provides an update on the state’s response to the coronavirus pandemic during a press conference at Florida’s Turnpike Turkey Lake Service Plaza in Orlando on Friday, July 10, 2020.

Joe Burbank | Orlando Sentinel | Getty Images

He also gained more power for himself. By the following May, DeSantis had lifted all local Covid restrictions. Six months later, the governor banned private employers from imposing vaccination mandates.

Along the way, DeSantis has argued that his actions were to protect the freedoms of Florida businesses.

“No one should lose their job due to heavy COVID mandates and we had a responsibility to protect the livelihoods of Florida residents,” he said in a November 2021 press release.

DeSantis’ position clashed with the opinion of public health experts at the time and drew heavy criticism, particularly after Florida weathered record waves of Covid cases and deaths in 2021. But while the state suffered the third-highest number of Covid deaths in the nation, its death rate per 100,000 population was lower than states with much stricter lockdown rules, such as New York and New York. Jersey, according to data from The New York Times.

DeSantis claimed victory, making his response to Covid a key part of what he now calls the “Florida Blueprint” for economic success.

Corporate culture

ESG is a long-term risk and opportunity for investors, says Si2's Heidi Welsh on the cost of culture wars

Florida Gov. Ron DeSantis, a critic of green investing, failed to protect his constituents from the devastation of Hurricane Ian, which may have been intensified by global warming.

Joe Burbank | Orlando Sentinel | Getty Images

DeSantis has also waged war on socially conscious ESG investment strategies, decrying the trend in his latest book as “an attempt to impose ruling class ideology on society through publicly traded companies and asset Management”.

ESG, a broad concept that typically refers to investment strategies that prioritize environmental, social and governance factors, has become a prime target for conservatives seeking to root out progressive influence in corporate culture. ‘business.

DeSantis signed a bill in early May prohibiting state and local authorities from making investment decisions based on ESG. It was only his last action against the ESG.

ESG movements played into the governor’s argument against corporate influence and patronage — themes he would employ again in his ongoing fight against Disney.

The Disney saga

Clothing promotion Florida Governor Ron DeSantis sits on a table before a book tour at the North Charleston Coliseum April 19, 2023 in North Charleston, South Carolina.

Sean Rayford | Getty Images

The battle centers on legislation banning classroom discussions of sexual orientation or gender identity from kindergarten through 3rd grade. Critics, who also noted that the bill’s vague language could apply to older students, dubbed it “Don’t Say Gay.”

Among those critics was Bob Iger, the current CEO of Disney, who was not running the company when he tweeted in February 2022 that the bill “will endanger vulnerable LGBTQ youth”. Bob Chapek, then Disney CEO, spoke out against the bill less than two weeks later and announced donations to pro-LGBTQ advocacy organizations. After the bill was signed, Disney pledged to help repeal the law.

DeSantis and his allies soon after targeted Disney’s Special Tax District, an arrangement that since the 1960s has allowed the company to effectively self-manage its Orlando-area parks. In April 2022, DeSantis signed a bill to dissolve the governing body, formerly known as the Reedy Creek Improvement District.

The move raised concerns that neighboring counties could be responsible for the district’s expenses and debts. In February, the Florida Legislature called a special session and produced a bill that kept the district intact, but changed its name — and let DeSantis choose its five-member board of supervisors.

The following month, members of the governor’s board accused Disney of sneaking into eleventh-hour development deals to thwart their power over the district. Disney says it followed the right process in making these deals and sought them out to protect its investments in Florida in a politically uncertain landscape.

The board voted to cancel these development contracts. Iger, who returned as Disney CEO in November, noted on a recent earnings call that other Florida companies also operate in special districts.

Disney sued Florida, accusing DeSantis of orchestrating a “targeted government retaliatory campaign” that now threatens the company’s business. The law was “designed to target Disney and Disney only,” the company said in its federal civil lawsuit. Counsel countersued in state court.

The fight shows no signs of stopping and returns to the fore with every new business update from Disney, such as the company’s recent announcement that it’s forgoing construction of an employee campus in Florida.

The ESG and Disney fights “reflect DeSantis’ ways of appealing to that populist base while keeping Florida’s overall political slant very pro-business,” Primo, a political science professor, told AFP. CNBC.

He’s “banking on being able to do both,” Primo said.

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