Taxpayers pay for most of cleanup of Everglades destruction caused largely by sugar industry
Update:
This post has been updated to reflect clarifications of the roles
Flo-Sun and U.S. Sugar have had in influencing (and benefiting from)
Everglades restoration projects and other public policy.
Despite
being behind every packet of Domino sugar in every diner in the
country, the name “Fanjul” is little-known outside of Florida. Alfy and
Pepe Fanjul run Flo-Sun, Inc., the mega-corporation that, alongside U.S.
Sugar, dominates the American sugar industry and wields substantial
political influence in Washington and around the country. Flo-Sun’s subsidiaries includeDomino,
Florida Crystals, C&H and Redpath Sugar, but the company’s legacy
is its alleged stranglehold on sugar-industry policy in the United
States. The Fanjuls’ sugar empire benefits from environmental efforts
that give them a green image — as taxpayers foot the bill — and from
federal subsidies that American consumers pay for both at the grocery
store and on tax day.
Florida’s Everglades Forever Act of 1994 drives one of the major environmental cleanup efforts in the state. Everglades Forever implementation so far has cost the state of Florida $1.8 billion. Of that, Florida sugar companies have pledged to contribute $300 million in tax revenue.
(The Fanjuls own 40 percent of Florida’s sugar industry, though no hard
numbers exist on how much each company has offered to the effort.) Put
another way, the industry that is almost entirely responsible for both
the historical destruction of the Everglades and continual pollution of the ecosystem thanks to fertilizer runoff is footing less than 20 percent of the bill to clean up the mess.
Meanwhile,
the far larger Comprehensive Everglades Restoration Plan (CERP) is
funded half by the federal government and half by the Florida state
government. CERP was originally projected to cost $7.8 billion; official
Florida state cost estimates have since ballooned to $13.5 billion, though federal projections put it at just under $20 billion.
The
fact that CERP is designed to clean up the mess in the Everglades
without special contributions from the industry that largely created it
has led some to
speculate that the Fanjuls’ political connections played some part in
shaping the program. Yet the lack of any sort of paper trail has allowed
both the Fanjuls and U.S. Sugar (the only sugar corporation that’s on a
similar scale to Flo-Sun), as well as the federal and state governments
that crafted CERP, to avoid answering any tough questions about how the
program was devised. The closest thing to a connection is the fact one of CERP’s principal architects was former U.S. Sen. Bob Graham (D-Fla.); Flo-Sun was a major contributor to Graham’s campaigns. Graham’s career, however, was characterized by anostensibly sincere desire to
restore the Everglades, so his involvement in CERP is hardly a smoking
gun — nor is the fact that he’s gotten Fanjul money, considering Alfy
has donated to most major Florida Democrats as far back as there are
election records.
Perhaps slightly more damning, though still inconclusive, is the fact that Flo-Sun began sending family scion Jose Fanjul, Jr. to Washington as a lobbyist in the late ’90s, but he stopped lobbying on his family’s behalf in 2000, the same year that the CERP went into effect as part of the Water Resources Development Act. Company representatives havesince decried (PDF) Congress for failing to properly fund CERP implementation.
The
billions that have been spent and the billions that have yet to be
spent are meant to reverse the massive ecological changes that came
about when nearly 2 million acres of
the Everglades were razed, predominately to make room for sugar
development. The money is also used to cut down the concentration of
phosphorus that ends up in Florida waterways after being dumped on
fields of sugar cane. Phosphorus is a nonrenewable central element in
the production of fertilizer and is already in short supply all over the world — it’s also one of the many contributors to record-high food prices.
Meanwhile, Florida Crystals has partnered with both Florida International University and the University of Florida in
government-funded, multi-million dollar ethanol research projects. As
with the corn industry, clean production of ethanol from sugar cane is
thought to be the future of the sugar industry. These programs have generated no publicly available academic research, but studies show (PDF)
that the larger University of Florida program has successfully begun
generating 2 million gallons of ethanol a year from processed bagasse, a
waste byproduct of sugar refining. The taxpayer-funded University of
Florida, then, is making progress in seeking new profits for the
Fanjuls.
The
Fanjul family’s political connections — and, it could be said, the
Florida sugar industry’s diminished role in paying for the Everglades
reconstruction projects that were crafted in the ’90s — become rather
more open when it comes to Alfy Fanjul’s longstanding ties to the
Clinton family. The campaign donation records of
Alfy Fanjul, a Democrat, show he gave extensively to both the Senate
and presidential campaigns of Hillary Clinton. He has also given money to the William J. Clinton Foundation, was theco-chair of Bill Clinton’s 1992 Florida campaign and has hosted Clinton fundraisers in the past.
Alfy
Fanjul’s Clinton association received outsized attention during the
Kenneth Starr investigation of Clinton; Bill Clinton’s breakup speech
with Monica Lewinsky was cut short by a phone call from Alfy Fanjul.
While White House records don’t document the content of phone calls,
Alfy’s call, made on President’s Day in 1996, could very well have been
in reference to an announcement that Vice President Gore had made just
hours before that he’d be pursuing a tax of a penny per pound on sugar
producers. The sugar industry went on to spend $35 million, according to the Army Corps of Engineers (PDF),
in pre-election day advertising once the tax was put on the ballot in
Florida. (There is unfortunately no documented breakdown of how much the
individual companies spent.) Ultimately, Big Sugar ads claiming the tax
would be a job killer won out and Florida voters killed the measure.
Bill Clinton quietly shelved it on the federal level against Gore’s
wishes.
It’s worth noting that the penny-a-pound tax would be just a dent offsetting the 18 cents-per-pound-of-sugar subsidies (PDF)
that cane growers like the Fanjuls receive from the federal government.
The subsidies are in the form of loans; the cost of repaying them, plus
interest, is tacked onto the purchase prices of sugar, which explains
why the wholesale and retail prices for sugar in the U.S. have hit more than triple the global average several times over the last twenty years, according to USDA figures. A 2000 Government Accountability Office report concluded
that the price markups cost U.S. consumers up to $1.9 billion annually
in the 1990s, a figure that doesn’t even account for the fact that the
subsidies are paid for with taxpayer money to begin with.
Between
1990 and 2009, U.S. prices for raw sugar averaged out to almost exactly
twice the global average: 21.56 cents a pound, as compared to 10.85
cents a pound for the rest of the world. In recent months, however, food
shortages, crop failures and the economic growth of sugar-producing
countries like India and Brazil have driven global prices up to levels
close to the artificially-inflated U.S. prices.
It’s
unclear just how Big Sugar in general will be affected by rising global
prices, but the Fanjuls are likely to face a windfall, thanks to their refineries in Canada, England, Mexico and Portugal.
They also own thousands of acres of sugar farmland in the Dominican
Republic. The Fanjuls, along with other sugar barons, were excoriated in
the 2007 documentary “The Sugar Babies” for alleged slavery-like practices at their Dominican plantations (PDF). Representatives for Florida Crystals said at the time (PDF) that the documentary highlighted issues that were no longer company policy.
Still,
just as the Fanjuls remain locked in competition with U.S. Sugar over
control of the American sugar market, so have they been at odds over
government deals with Big Sugar. In 2008, then-Gov. Charlie Crist announced that Florida would be spending $1.75 billion in taxpayer money to
buy nearly 180,000 acres of land from U.S. Sugar (the deal has since
been scaled back because of budget shortfalls). Flo-Sun representatives
balked at the deal, calling it “a gross misuse of public funds” and a unilaterally-decided waste of money (PDF). Some have speculated that the Fanjuls could have emerged from the situation in a position to negotiate sale of their unused lands at an even higher rate. To date, Flo-Sun has not come forward with a deal to do so
