Home Markets DeSantis Business Battles: Disney, Covid, Taxes, ESG

DeSantis Business Battles: Disney, Covid, Taxes, ESG

by SuperiorInvest

Florida Governor Ron DeSantis delivers remarks at the Heritage Foundation’s 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 launched his presidential campaign on Wednesday, which tested his blend of pro-business conservatism and culture-war populism on a national level.

DeSantis, 44, has filed campaign paperwork and is poised to announce his bid for the Republican presidential nomination on Twitter during a live interview with Elon Musk which is set for 6:00 PM ET. The announcement will cement DeSantis as the former president’s primary Republican challenger Donald Trumpwhich held a consistent electoral lead over the primary field.

DeSantis worked to establish himself as a champion of economic growth even before he sought to quickly repeal the Covid lockdown policy in the name of revitalizing Florida’s ailing businesses. Since then, he has taken credit for the state’s low unemployment rate, its population growth and its economy overtaking national average.

At the same time, he threw himself into a political fight with some of the leading employers in his state – above all Disney — and signed legislation targeting private business practices, some of which already were blocked in courts.

DeSantis apparently sees no contradiction between his pro-business stance and heavy-handed governance. “Corporatism is not the same as free enterprise,” he said speech last September, “and I think too many Republicans have seen limited government to basically mean that whatever’s best for corporate America is how we want to do the economy.”

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

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

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

The rise of DeSantis

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

DeSantis was the primary sponsor of 52 bills in Congress, none of which became law, Spectrum News reported. One was the “Drain the Swamp Act,” which aimed to fulfill Trump’s campaign slogan by strengthening the ban on lobbying officials after they leave government service.

DeSantis, a founding member of the conservative House Freedom Caucus, has also introduced legislation that would repeal the payroll tax for retired-age Americans and has supported other charge replace most federal taxes with national sales taxes. Critics they say such proposals, which have reappeared in Congress this year, would burden low- and moderate-income Americans.

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

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

“And suddenly he had ambitions to become president. And in order to do that, he knew he had to carve out a niche.”

The Covid breakthrough

DeSantis gained national attention during the coronavirus pandemic in September 2020, when picked up all Florida social distancing restrictions at restaurants, bars and other businesses.

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

Joe Burbank | Orlando Sentinel | Getty Images

He also gained more power for himself. The following May, DeSantis rose All local Covid restrictions. Six months later, Gov forbidden impose vaccination mandates on private employers.

Along the way, DeSantis believed his actions were aimed at protecting the freedoms of Florida businesses.

“No one should lose their job because of onerous COVID mandates, and we had a responsibility to protect the livelihoods of people in Florida,” he said in a November 2021 news release.

DeSantis’ position clashed with the views of public health experts at the time and drew strong criticism, especially after Florida broke records. waves of Covid cases and deaths in 2021. But while the state suffered the third-highest number of Covid deaths in the country, its death rate per 100,000 people was lower than states with much stricter lockdown rules, such as New York and New Jersey, according to the New York Times data.

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

Business culture

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

Even in the midst of the pandemic, DeSantis and his allies trained to look at other polarizing social issues piling up at Florida businesses.

Quietly in 2020 signed controversial legislation that required some private companies to use the E-Verify system to check the immigration status of employees. Earlier this month, he strengthened those rules, signing a bill that makes E-Verify mandatory for every employer with 25 or more employees.

In 2021, DeSantis signed legislation that allowed Florida to punish large social media companies such as Facebook and Twitter, which banned political candidates. The legislation came months after these and other companies kicked Trump off their platforms in the wake of riots at the Capitol on Jan. 6, 2021. Since then, a federal appeals court ruled that the Social Media Act is unconstitutional.

In the last legislative session, DeSantis signed a bill that stopped the automatic deduction of union dues from state employee paychecks. Florida Education Association defendant DeSantis chastised them for opposing his policies, and critics were quick to point out that the bill did not cover unions representing first responders. The police and fire unions endorsed DeSantis’ re-election.

Florida Governor Ron DeSantis, a critic of environmentally sensitive investments, failed to protect his constituents from the ravages of Hurricane Ian, which may have been exacerbated by global warming.

Joe Burbank | Orlando Sentinel | Getty Images

DeSantis has too he waged war against the socially conscious ESG investment strategy, criticizing 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 term that generally refers to investment strategies prioritizing environmental, social and governance factors, has become paramount target for conservatives trying to root out progressive influence in corporate culture.

DeSantis signed legislation in early May that prohibits state and local officials from making investment decisions based on ESG. It was just his latest action against ESG.

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

Disney saga

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

Sean Rayford | Getty Images

The battle centers on legislation banning classroom discussion of sexual orientation or gender identity in grades K-3. 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, Disney’s current CEO, who did not run the company when he did he tweeted in February 2022 that the bill would “endanger vulnerable young LGBTQ people”. Then Disney CEO Bob Chapek came out against bill less than two weeks later and announced donations to LGBTQ rights organizations. After the bill was signed into law, Disney promised to help repeal the law.

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

The move raised concerns that neighboring counties would be on the hook for the district’s expenses and debt. In February, the Florida Legislature called a special session and drafted a bill that would keep the district intact but change its name — and let DeSantis choose his five-member board of supervisors.

The next month, members of the governor’s board accused Disney of sneaking through 11th-hour development deals to thwart their power over the county. Disney says it followed due process in creating the deals and that it sought them to protect its investment in Florida amid political uncertainty.

The board voted to cancel these development contracts. Iger, who returned as Disney CEO in November, recently remarked earnings call that other Florida companies also operate within the special districts.

Disney sued Florida, accusing DeSantis of orchestrating a “targeted campaign of government retaliation” that is now threatening the company’s business. The law was “designed to target Disney and Disney alone,” the company said in its federal civil action. The board countersued in state court.

The fight shows no signs of stopping and returns to the spotlight with each new business update from Disney, such as the company’s recent announcement scrapping plans build an employee campus in Florida.

The ESG and Disney fight “reflects ways that DeSantis can appeal to that populist base while keeping the general direction of Florida politics very business-friendly,” political science professor Primo told CNBC.

“He’s counting on him to be able to do both,” Primo said.

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