DeSantis’ Business Battles: Disney, Covid, Taxes, ESG

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

Anna Money Maker | Getty Images

Florida Governor Ron DeSantis is set to launch his presidential campaign Wednesday night, putting his mix of pro-business conservatives and culture war populism to the test nationally.

DeSantis, 44, is set to announce his Republican presidential candidacy on Twitter, during a live chat with Elon Musk set for 6 p.m. ET. The announcement would solidify DeSantis’ position as the top Republican challenger to former President Donald Trump, who has a steady lead in the polls over the primary field.

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

At the same time, he was embroiled in a political battle with some of the top employers in his state – most notably Disney — and signed legislation targeting private business practices, some of which have since been banned in the courts.

DeSantis seems to see no contradiction between his pro-business stance and his harsh judgment. “Corporateness is not the same as free enterprise,” he said in a speech last September, “and I think a lot of Republicans saw limited government to basically mean that whatever is best for American corporations is the way we want to do the economy.”

But some experts have expressed skepticism about the governor’s tightrope walk.

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

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

The rise of DeSantis

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

DeSantis was the lead sponsor of 52 bills in Congress, none of which became law, Spectrum News mentioned. One of them was the “Drain the Swamp Act,” which aims to fulfill Trump’s campaign slogan by strengthening the prohibition of pressure on officials after they leave government service.

A founding member of the conservative House Liberty Caucus, DeSantis also introduced legislation that would eliminate a payroll tax for Americans of retirement age, and supported another bill to replace most federal taxes with a national sales tax. Critics say such proposals, which resurfaced in Congress this year, would burden low- and middle-income Americans.

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

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

“Suddenly he had the ambition to become president. To do so he knew he had to carve out his own niche.”

covid hack

business culture

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

Even in the midst of a pandemic, DeSantis and his allies have set their sights on other polarizing social issues that Florida’s business has grappled with.

In 2020, it was quietly Sign controversial legislation requiring some private companies to use an electronic verification system to check the immigration status of employees. He reinforced those rules earlier this month, signing into law a bill that would make E-Verify mandatory for any employer with 25 or more employees.

In 2021, DeSantis signed a law allowing Florida to penalize large social media companies, such as Facebook and Twitter, which banned political candidates. The legislation came months after those companies and others kicked Trump off their platforms in the wake of the January 6, 2021 Capitol riot. A federal appeals court has since ruled that the social media law is unconstitutional.

In the most recent legislative session, DeSantis signed a bill that stopped union dues from being automatically deducted from the salaries of public employees. The Florida Education Association accused DeSantis of penalizing them for opposing his policies, and critics were quick to point out that the bill does not apply to unions that are first responders. The police and firefighters unions supported DeSantis’ re-election bid.

DeSantis has also waged war against socially conscious ESG investment strategies, denouncing 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 generally refers to investment strategies that prioritize environmental, social and governance factors, has become a prime target for conservatives seeking to eradicate progressive influence in company culture.

DeSantis signed into law a bill in early May that bars state and local officials from making ESG-based investment decisions. This was only the last measure against ESG.

The ESG’s moves played into the governor’s argument against corporate influence and nepotism — themes he would use again in his ongoing battle against Disney.

Disney epic

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

Sean Rayford | Getty Images

The battle centers around legislation banning discussion of sexual orientation or gender identity in grades kindergarten through third grade. Critics, who also noted that the bill’s ambiguous language could apply to older students, dubbed it “Don’t Say Like Me”.

Among those critics was Bob Iger, the current CEO of Disney, who wasn’t leading the company when he was chirp In February 2022 that the bill would “put vulnerable LGBTQ+ youth at risk”. Then-Disney CEO Bob Chapek vetoed the bill less than two weeks later and announced donations to pro-LGBTQ rights organizations. After the law was signed, Disney pledged to help repeal the law.

DeSantis and his allies soon after targeted Disney’s own tax zone, an arrangement that since the 1960s has allowed the company to effectively manage its parks in the Orlando area. In April 2022, DeSantis signed a bill to dissolve the board of directors of the Reedy Creek Improvement District.

The move raised fears that neighboring counties were on the hook for the expenses and debts of the region. In February, the Florida legislature held a special session and passed a bill that kept the district intact, but changed its name — and allowed DeSantis to choose a five-member board of supervisors.

says Tim Nolen of Macquarie

The following month, members of the Board of Governors accused Disney of snooping through 11-hour development deals to thwart their control of the region. Disney says it followed the correct process in crafting those deals, and that it sought them in order to protect its investments in Florida amid a politically uncertain landscape.

The Board voted to invalidate these development contracts. Iger, who returned as CEO of Disney in November, noted on a recent earnings call that other Florida companies are also operating in special districts.

Disney sued Florida, accusing DeSantis of orchestrating a “targeted campaign of government retaliation” that now threatens the company’s business. In its federal civil lawsuit, the company said the law was “designed to target Disney and Disney alone.” The council has argued in state court.

The fight shows no signs of stopping, returning to the spotlight with each new Disney business update, such as the company’s recent announcement that it canceled plans to build a campus for employees in Florida.

The ESG and Disney battles “reflect ways for DeSantis to appeal to that populist base while simultaneously maintaining the overall direction of business-friendly Florida politics,” Primo, a political science professor, told CNBC.

Primo said he is “counting on being able to do both.”

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