TALLAHASSEE, Fla. – Today, Florida Chief Financial Officer (CFO) Jimmy Patronis issued a directive bolstering transparency requirements for vendors that do business with the Department of Financial Services (DFS). Among a number of provisions, the directive requires DFS leverage the country-of-origin vendor survey that was issued in May, prior to entering into a new contract or approving vendor contract amendments. The directive also requires the Department provide legal recommendations on pursuing claims against the Communist Party of China for its cover up of COVID-19 and requires the Department to provide statutory recommendations on bolstering transparency by identifying and reporting the foreign or domestic status of each vendor’s ownership structure that possess majority ownership of vendors that receive taxpayer money from Floridians.
 
Chief Financial Officer Jimmy Patronis said, “Recently, we heard from the Joint Legislative Budget Commission that Florida taxpayers are going to be out over $5 billion because of a pandemic that the Chinese-government tried covering up. In fact, the Chinese government went as far as blaming the United States for COVID-19, which is the type of diversion tactic a guilty party would use. Meanwhile, the State of Florida is cutting checks that total billions of dollars every year – and many of these dollars go to vendors that may be owned by the Communist Party of China. Florida, as well as the United States, will need remedies for recouping the losses that resulted from COVID-19, and today’s directive takes much needed steps in bolstering transparency and tightening our efforts of holding the Chinese government accountable for how they wronged our state and nation.” 
 
The directive bolsters transparency by ensuring Department vendors that are domiciled outside of the state are properly registered with the State of Florida as a foreign entity. To ensure this standard is met, the Department will crosscheck the country-of-origin vendor survey that was distributed in May, and if a vendor has not been responsive to the survey, Department staff will crosscheck other state records to identify whether the vendor is properly registered to transact business in Florida.  The new review will be initiated before any new contracts, or contract amendments, with DFS are executed. To date, the Department has received more than 20,000 responses to the vendor survey. If no registration information is provided, DFS will pause the amendment or contracting process until the domestic or foreign nature of the vendor is identified and documented.
 
Additionally, the directive requires the Department’s subject matter experts provide recommendations for increasing transparency regarding the extent to which Florida’s vendors are owned or controlled by foreign interests. Under the directive the Department will investigate how vendor-interfacing policies can be statutorily augmented to bolster transparency. The directive also requires of the Office of General Counsel within DFS provide recommendations on pursuing claims against the Communist Party of China. Both recommendations are due to the Chief of Staff within 45-days. 
 
FULL TEXT OF CHIEF FINANCIAL OFFICER DIRECTIVE 2020-17:

WHEREAS, Article IV, Section 4(c) of the Florida Constitution designates the Chief Financial Officer as the chief fiscal officer of the state responsible for approving accounts against the state; 

WHEREAS, based on the Office of Economic and Demographic Analysis September report, the COVID-19 virus reduced state revenues by $1.8 billion in the 19/20 fiscal year and future revenues will be impacted by over $5 billion;

WHEREAS, the COVID-19 virus was exacerbated worldwide through the documented cover up by the Communist Party of China (CPC), which censored online information about the virus, among other acts;  
      
WHEREAS, the Chief Financial Officer has committed to promoting transparency throughout the vendor system as a means of improving the functions of government and bolstering the return on investment to taxpayers;

WHEREAS, the agency surveyed nearly 100,000 vendors that do business with the State of Florida, requesting them to disclose whether their corporate structure is owned or controlled by the Communist Party of China; 

WHEREAS, the Department of Financial Services (Department) has received more than 20,000 responses from the vendor survey, in which organizations receiving taxpayer dollars from the state of Florida self-identified whether they are owned or controlled by the CPC;

 WHEREAS, Section 17.05(1), Florida Statutes, authorizes the Chief Financial Officer to demand and require full answers on oath from any party or privy to any account, claim or demand against the state;

WHEREAS, Section 17.05(2)(b), Florida Statutes, authorizes the Chief Financial Officer to require persons bringing claims against the state to file a statement in writing, under oath as to all facts and circumstances concerning the matter to be audited, examined or investigated;

WHEREAS, Section 17.14, Florida Statutes, authorizes the Chief Financial Officer to prescribe forms of all papers, reports and returns and the manner of keeping the accounts and papers to be used by persons having accounts, claims or demands against the state; 

WHEREAS, Section 120.52, Florida Statutes, exempts “statements, memoranda, and instructions to state agencies issued by the Chief Financial Officer and relating or pertaining to claims for payment submitted by state agencies to the Chief Financial Officer from the rulemaking requirements of Chapter 120, Florida Statutes;

WHEREAS, Section 607.1501, Florida Statutes, prohibits foreign corporations from transacting business in this state unless such foreign corporation obtains a certificate of authority from the Department of State;

WHEREAS, Section 607.1501, Florida Statutes, requires foreign corporations to pay certain fees into in order to register to do business in Florida. 

NOW THEREFORE, BE IT RESOLVED THAT I, JIMMY PATRONIS, in accordance with the authority vested in me by Article IV, Section 4 of the Florida Constitution, and Sections 17.30 and 20.121(1), Florida Statutes, hereby issue the following Directive to the Department of Financial Services’ Division of Accounting and Auditing, Division of Administration’s Bureau of Purchasing and Contractual Services, Office of Finance and Budget and the Office of the General Counsel:

Section 1. Prior to approving any new contract or modifying an existing contract between the Department of Financial Services and any vendor, the contracting Division shall verify the status of the vendor seeking contract modification as a Florida Domestic Vendor or Foreign Vendor. The Division may cite responses from the vendor survey in furtherance of this directive;  
 
Section 2. For purposes of this Directive a “Florida Domestic Vendor” is one who is registered as a Florida Corporation with the Florida Department of State.

Section 3. For purposes of this Directive, a “Foreign Vendor” is one whose principal address is located outside the state of Florida.

Section 4. The Department’s Office of Finance and Budget shall ensure any Foreign Vendors who receive funds from the Department of Financial Services have properly registered as a Foreign Corporation with the Department of State and paid all requisite corporate filing fees owed to the state. 

Section 5. Within 45-days from the date this Directive is issued, the Department of Financial Services’ Office of General Counsel shall provide a legal memorandum to the Chief of Staff outlining legal options for pursuing claims against the CPC for lost revenues and expenses incurred by the State of Florida.

Section 6. Within 45-days from the date this Directive is issued, the Division of Accounting and Auditing will submit recommendations to the Chief of Staff outlining methods for bolstering vendor transparency regarding the extent to which Vendors receiving funds from the State of Florida are owned or controlled by foreign interests.
 
A copy of Chief Financial Officer Directive 2020-17 can be found here.