DeSantis business battles: Disney, Covid, taxes, ESG
Florida Gov. Ron DeSantis gives 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 Gov. Ron DeSantis is slated to launch his presidential campaign Wednesday evening, putting his blend of pro-business conservativism and culture-war populism to the test at the national level.
DeSantis, 44, is set to announce his bid for the Republican presidential nomination on Twitter, during a live conversation with Elon Musk that is set for 6 p.m. ET. The announcement will cement DeSantis as the top Republican rival to former President Donald Trump, who has held a consistent polling lead over the primary field.
DeSantis worked to establish himself as a champion of economic growth even before he pushed to quickly lift Covid lockdown policies in the name of revitalizing Florida’s ailing businesses. He has since taken credit for the state’s low unemployment rate, its population growth and its economy outpacing the national average.
At the same time, he has plunged into political battle with some of his state’s top employers — most notably Disney — and signed legislation targeting private business practices, some of which has since been blocked in the courts.
DeSantis apparently sees no contradiction between his pro-business posture and his heavy-handed governance. “Corporatism is not the same as free enterprise,” he said in a speech last September, “and I think too many Republicans have viewed limited government to basically mean whatever is 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 sort of exemplifies this tension in DeSantis as a candidate,” said David Primo, a professor of political science and business administration at the University of Rochester. “There’s this hydra-like element to what he’s trying to do.”
A spokesman for DeSantis’ campaign-in-waiting did not immediately respond to CNBC’s request for comment.
DeSantis himself has little business experience. A Yale- and Harvard-educated lawyer, he joined the U.S. Navy Judge Advocate General’s Corps and served at Guantanamo Bay and in Iraq. He worked as an attorney after his active-duty service ended in 2010, and in 2012 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 reported. One of them was the “Drain the Swamp Act,” aimed to realize Trump’s campaign slogan by strengthening lobbying bans on officials after they leave government service.
A founding member of the conservative House Freedom Caucus, DeSantis also introduced legislation that would axe the payroll tax for retirement-age Americans, and he backed another bill to replace most federal taxes with a national sales tax. Critics say such proposals, which popped up again in Congress this year, would burden low- and middle-income Americans.
DeSantis resigned from Congress to run for governor in 2018 and, buoyed by an endorsement from Trump, narrowly defeated his Democratic opponent, Andrew Gillum. DeSantis’ aspirations for higher office were apparent among his loyalists that same year, Politico reported.
“He seemed to be like a mainstream Republican — pro-business, very conservative on social and economic issues,” said J. Edwin Benton, a professor of political science at the University of South Florida.
“And all of a sudden he had the ambition to become president. And to do so he knew he had to carve out a niche for himself.”
DeSantis seized the national spotlight during the coronavirus pandemic in September 2020, when he lifted all of Florida’s social distancing restrictions on restaurants, bars and other businesses.
He also acquired more power for himself. By the following May, DeSantis had lifted all local Covid restrictions. Six months later, the governor banned private employers from imposing vaccine mandates.
Along the way, DeSantis held that his actions were aimed at protecting Florida businesses’ freedoms.
“Nobody should lose their job due to heavy-handed COVID mandates and we had a responsibility to protect the livelihoods of the people of Florida,” he said in a November 2021 press release.
DeSantis’ stance clashed with public health experts’ views at the time and drew heavy criticism, especially after Florida weathered record-breaking 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 in states with much stricter lockdown rules, such as New York and New Jersey, per New York Times data.
DeSantis has claimed victory, making his Covid response a key piece of what he now calls the “Florida Blueprint” for economic success.
Even in the midst of the pandemic, DeSantis and his allies had trained their sights on other polarizing social issues that roped in Florida businesses.
In 2020, he quietly signed controversial legislation that required some private companies to use the E-Verify system to check employees’ immigration status. He strengthened those rules earlier this month, signing a bill that makes E-Verify mandatory for any employer with 25 or more employees.
In 2021, DeSantis signed a law that allowed Florida to punish large social media companies, such as Facebook and Twitter, that banned political candidates. The legislation came months after those and other companies kicked Trump off their platforms in the wake of the Jan. 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 public employees’ paychecks. The Florida Education Association accused DeSantis of punishing them for opposing his policies, and critics have been quick to point out that the bill does not apply to unions representing first responders. Police and firefighters’ unions had endorsed DeSantis’ reelection bid.
DeSantis has also waged war against socially conscious ESG investing strategies, decrying 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 investing strategies that prioritize environmental, social and governance factors, has become a prime target for conservatives seeking to root out progressive influence in corporate culture.
DeSantis signed a bill in early May barring state and local officials from making ESG-based investment decisions. It was only his latest action against ESG.
The ESG moves played into the governor’s argument against corporate influence and favoritism — themes he would employ again in his ongoing fight against Disney.
The Disney saga
Apparel promoting Florida Governor Ron DeSantis sit on a table before a book tour event 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 the bill’s vague language could apply to older students, have nicknamed it “Don’t Say Gay.”
Among those critics was Bob Iger, Disney’s current CEO, who was not leading the company when he tweeted in February 2022 that the bill “will put vulnerable, young LGBTQ people in jeopardy.” Disney’s then-CEO Bob Chapek came out against the bill less than two weeks later and announced donations to pro-LGBTQ rights organizations. After the bill was signed, Disney vowed to help repeal the law.
DeSantis and his allies soon after targeted Disney’s special tax district, an arrangement that since the 1960s has allowed the company to effectively self-govern its Orlando-area parks. In April 2022, DeSantis signed a bill to dissolve the governing body, formerly known as the Reedy Creek Improvement District.
The move set off fears that the neighboring counties would be on the hook for the district’s expenses and debts. In February, the Florida legislature convened a special session and produced a bill that kept the district intact, but changed its name — and let DeSantis handpick its five-member board of supervisors.
The next month, the governor’s board members accused Disney of sneaking through 11th-hour development deals to thwart their power over the district. 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 the politically uncertain landscape.
The board voted to nullify those development contracts. Iger, who returned as Disney’s CEO in November, noted in a recent earnings call that other Florida companies also operate within special districts.
Disney sued Florida, accusing DeSantis of orchestrating a “targeted campaign of government retaliation” that now threatens the company’s business. The law was “designed to target Disney and Disney alone,” the company said in its federal civil suit. The board has 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 to build an employee campus in Florida.
The ESG and Disney fights “reflect ways for DeSantis to appeal to that populist base while at the same time keeping the general thrust of Florida policy very business friendly,” Primo, the political science professor, told CNBC.
He’s “banking on being able to do both,” Primo said.