A Depleted Aquifer Stymied Plans for a Stronach Ranch, Until a Florida Governor Intervened

Among rolling hills near Ocala, Fla., herds of cattle graze in the blazing sun. In the shade of moss-draped cypress trees, they cool themselves amid the company of egrets. This is Frank Stronach’s cattle ranch, alternately named Adena Farms or Sleepy Creek, an inland idyll four hours’ drive and a world away from the pulsing energy of Miami.

After the auto parts, horse racing and gambling businesses, Mr. Stronach intended this to be his next big thing: grass-fed beef. Starting in 2008, he amassed 384 square kilometres of land – an area nearly four times the size of the city of Orlando – built a slaughterhouse and brought in 8,000 head of cattle. Down the road, he added a golf course.

But from the beginning there was one big problem: water.

Canadian magnates, American influence: Stronach empire injects millions into U.S. politics

Florida’s swift population growth has significantly depleted the aquifer that supplies most of the drinking water to the northern and central parts of the state. The decline has been particularly noticeable in Ocala. The town is best known for Silver Springs, an opening in the aquifer where the water glows a luminous blue and tourists cruise in glass-bottomed boats over a network of submerged caverns. In the decade from 2001 to 2011, average water flows at the springs dropped by nearly a third.

So when Mr. Stronach’s ranch applied in 2011 for a permit to pump nearly 50 million litres daily to water the grass, it sparked a firestorm. Adena eventually cut back the request to 5.5 million litres daily, but that did little to assuage local environmental activists. They often showed up to protest Mr. Stronach’s public appearances in the area, petitioned state officials to turn down the application and went to court in a bid to stop it.

There was even more intrigue going on behind the scenes.

The St. Johns River Water Management District is the government agency in charge of allocating water use in this part of Florida, including approving or denying permits. One of five regional districts set up in the 1970s to oversee the state’s scarce water, it was meant to put such decisions in the hands of scientists, and out of those of politicians.

But according to former employees of the district, the administration of Rick Scott, Florida’s former Republican governor, repeatedly interfered in ways that helped Mr. Stronach and other permit seekers like him.

Jeff Cole, the water management district’s then-chief of staff, said officials in Mr. Scott’s office and at the Department of Environmental Protection frequently asked Mr. Cole to change water policy to allow more consumption. The calls typically

came from Noah Valenstein, Mr. Scott’s environmental policy adviser, and Jon Steverson, an official with the department of environmental protection, Mr. Cole said.

“It was not at all unusual for them to give direction on what they wanted to see – typically, it was water policy that was less protective of the environment and less protective of water supply,” he said. “Once Rick Scott got into office, they started getting involved. His office and his staff came in and took significant control. They were pretty heavy-handed.”

Jim Gross, a top hydrologist at the district at the time, confirmed Mr. Cole’s account. He said the district crafted long-term water management plans in 2011 and 2014 that were both put on ice after complaints from Mr. Scott’s office. Mr. Gross recalled one meeting in 2014, for instance, at which Mr. Cole told his subordinates the governor did not like the district’s planning.

“The governor’s office had told the agency that he will not accept the draft district supply plan and that it must be scrapped, thrown in the trash, because the plan had found that significant harm to water resources was already occurring due to excessive withdrawals of water,” said Mr. Gross, now executive director of Florida Defenders of the Environment.

Mr. Scott and the Republican-controlled legislature tried to help Adena in other ways, too. As part of a 2012 tax cut package, they included a tax break on electricity for slaughterhouses. The Miami Herald reported the measure was specifically designed as an incentive for the Stronach company’s slaughterhouse near Ocala….

Over the past two decades, Stronach-connected companies have donated more than US$1.4-million directly to the Florida Republican Party, another US$1.4-million to Republican-connected political action committees and hundreds of thousands more to individual politicians.

Two PACs connected to Mr. Scott, Let’s Get to Work and New Republican PAC, have received a combined US$150,000. Photographs from the 2018 edition of the Pegasus World Cup, the marquee race at Stronach-owned Gulfstream Park horse track, show Mr. Scott posing with Mr. Stronach and his daughter, former federal cabinet minister Belinda Stronach.

Mr. Stronach’s golf course at Adena also played host to a fundraiser for Adam Putnam, then Florida’s commissioner of agriculture and consumer services, in the summer of 2017, which Mr. Stronach attended. Over the next year, several U.S. Stronach Group companies gave a combined US$314,775.44 to Mr. Putnam and his PAC, Florida Grown.

Mr. Putnam had no direct control over the water management district, but did play some part in setting bigger-picture water policy. At the time, he was also the odds-on favourite to succeed Mr. Scott as governor. Only when then-president Donald Trump stepped into the race to endorse Mr. Putnam’s rival for the Republican nomination, Ron DeSantis, did Mr. Putnam fall behind, and Mr. DeSantis went on to win both the nomination and the election.

The Florida donations were part of at least US$24-million Stronach companies have given to U.S. political causes over the past 20 years. Thirty-two Stronach businesses contributed to at least 662 American politicians, political action committees and referendum campaigns. It is legal for foreign-owned companies to make political contributions in the U.S., but only if the foreign owners and employees play no part in the decision to donate.

Mr. Stronach declined to answer The Globe and Mail’s questions on Adena and political contributions.

Mr. Gross, the former hydrologist with the St. Johns River Water Management District, said he and other scientists ran more than 100 simulations to estimate the effect Mr. Stronach’s ranch would have on water levels if it received a permit.

Under every scenario, Mr. Gross found, the ranch would have depleted the aquifer at unacceptable rates, reducing water levels at Silver Springs and the Silver River, drying up wetlands and killing off habitat for fish. Based on this work, district staff recommended denying the ranch a permit in 2014.

Ahead of that decision, e-mails obtained by The Globe reveal, the Stronach Group’s lobbyists pushed back against the district’s method of modelling the effects of Adena’s proposed water consumption.

The lobbyists met with water district officials on at least three occasions from March to May of 2014. The sit-downs included Michael Minton, an agriculture industry lobbyist with the firm Dean Mead; Marc Dunbar, Mr. Stronach’s long-time Florida lobbyist; Mike Haridopolos, a former Florida state senator who went on to become an executive vice-president at the Stronach Group; Hans Tanzler, the water district’s then-executive director; and John Miklos, the chair of the water district’s board, appointed by Mr. Scott.

Ahead of one meeting, in March of 2014 at Dean Mead’s offices in Orlando, Mr. Minton wrote that he wanted to “list our model concerns” for Mr. Tanzler “so he has the ammo he needs if he wants to take a step back” from the district’s current modelling.

The e-mails also reference five telephone calls between Mr. Haridopolos and Mr. Tanzler in 2013 and 2014.

In 2015, shortly after Mr. Scott started his second term as governor, his administration purged the leadership of the St. Johns River Water Management District.

Mr. Cole, then the chief of staff, said Mr. Miklos told him he had to resign or he would be terminated. Mr. Miklos showed Mr. Cole a list of several managers that Mr. Steverson had ordered pushed out the door, Mr. Cole said. Another former employee of the district said he was also shown the same list of names by Mr. Miklos, and told that Mr. Steverson had ordered them axed.

Mr. Cole and all the other managers on the list resigned. Mr. Gross said he and another scientist had also been fired a few months earlier.

After the purge, the water management district reversed itself on the Stronach company’s permit. The district switched to a different method of modelling water levels and ultimately gave Adena permission to pump more than 10.1 million litres a day. Environmentalists’ legal challenges to the decision failed.

“All of us that were pushed out, had a view of how to protect the water resources in that area of Florida. Getting us out paved the way to water policy that was less impactful,” Mr. Cole said.

Mr. Haridopolos, for his part, was hired as a subcontractor for the water district on a different project in late 2015, e-mails say, at the same time as he was still working for the Stronach Group.

Correspondence between Mr. Haridopolos, district officials and Jon Armbruster at Taylor Engineering indicate that Taylor gave Mr. Haridopolos a US$35,000 contract to serve as a consultant for four months on a St. Johns project for which Taylor was the prime contractor. The project involved dredging the Eau Gallie River. Mr. Haridopolos’s role was to negotiate with the Florida East Coast railroad, which owns a bridge spanning the river, on running a pipe containing the dredged material under the bridge.

Teresa Monson, a spokeswoman for the St. Johns Water Management District, said the agency’s executive director, Ann Shortelle, was “unavailable” for an interview. Mr. Miklos, the former board chair, also declined The Globe’s request for comment through Ms. Monson.

Mr. Valenstein and Mr. Steverson did not respond to The Globe’s questions. Neither did Mr. Scott, now a U.S. senator and potential 2024 presidential candidate; Mr. Putnam, now chief executive officer of the conservationist group Ducks Unlimited; or Thad Altman, the state legislator who sponsored the slaughterhouse tax break.

Today, the Adena golf course is tied up in litigation. During a long legal battle between Frank and Belinda Stronach for control of the empire, Ms. Stronach shut the course down and arranged to sell it off. After the Stronachs settled their dispute last year, a Canadian court ordered the sale not to go ahead. The buyers have sued in a bid to complete the purchase.

When The Globe visited earlier this year, the course’s Spanish-style buildings, faced in white stucco and topped with red clay roof tiles, sat stately in the heat. But the fairways were unkempt and there were no signs of life on the property.

Far busier was Silver Springs, where the glass-bottomed boats were full of sightseers. Below them in the depths were visible reminders of the state’s explosive population growth. Extensive algae coated the walls of the caverns, the consequence of runoff from expanding human habitation, industry and agriculture.

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