#As Disney Outmaneuvers DeSantis, Florida Gov. Calls For Investigation Over Special District

Florida Gov. Ron DeSantis is calling for an investigation into an agreement that transferred the powers of Disney’s now-dissolved special district back to the company before the state assumed control of the board.

In a letter to state chief inspector general Melinda Miguel, DeSantis says that the deal suffers “serious legal infirmities” and questions whether it’s valid under “Florida civil and criminal laws and ethics requirements.” He points to “inadequate notice” before the deal was struck, “improper delegation of authority” and “ethical violations, such as conflicts of interest and self-dealing.”

The letter was sent in response to DeSantis and his allies on the board learning that Disney quietly pushed through in February an agreement that essentially renders the new board installed by the governor powerless outside of being able to maintain roads and other basic infrastructure. The 30-year pact includes approval to build another theme park and restrictions that bar the DeSantis-controlled oversight board from making changes to Disney’s sprawling property without securing company approval.

The feud started last year when Disney froze political donations in the state in response to the so-called “Don’t Say Gay” law, which bars discussion on general identity and sexual orientation in the classroom for young students. DeSantis retaliated by signing legislation dissolving independent special districts that were created prior to 1968. The privileges conferred by the special tax district status allow Disney privileges of self-government, including borrowing money for infrastructure projects by issuing bonds, exemption from a host or regulations and fees related to emergency services and development planning. The district was kept in place with a board handpicked by DeSantis in part because terminating it could of had massive ripple effects for the neighboring counties of Orange and Osceola, which was set to inherit over $1 billion in debt owed by Disney.

But before the governor took power, the former oversight board passed in public meetings an agreement transferring control of Disney’s future development planning to the company. During the first meeting on Wednesday, the new board voted to hire outside legal counsel to examine the agreement.

“These collusive and self-dealing arrangements aim to nullify the recently passed legislation, undercut Florida’s legislative process and defy the will of Floridians,” Mr. DeSantis wrote in the letter on Monday. “Any legal or ethical violations should be referred to the proper authorities.”

DeSantis says there should be a “thorough review and investigation” into the qualifications of the former board as well as any “involvement of Walt Disney world employees and agents” or “financial gain or benefit derived by” the company in passing the pact. He argues any violation should be “referred to the appropriate authorities.”

Disney has maintained the deal is on solid legal footing. It said in a statement last week, “All agreements signed between Disney and the District were appropriate, and were discussed and approved in open, noticed public forums in compliance with Florida’s Government in the Sunshine law.” While there was discussion at the meeting last week of striking a deal with Disney, the board will likely challenge the agreement in court.

Asked at an annual shareholder meeting Monday on steps being taken to protect shareholders from the looming legal battle, chief executive Bob Iger stressed the economic significance of the company’s operations in the state. He unveiled plans to invest over $17 billion into Walt Disney World over the next decade.

“Those investments, we estimate, will create 13,000 new Disney jobs and thousands of other indirect jobs, and they’ll also attract more people to the state and generate more taxes,” Iger said. “And so our point on this is that any action that supports those efforts simply to retaliate for a position the company took sounds not just anti-business but it sounds anti-Florida, and I’ll just leave it at that.”

The statements were the first from Iger or the company directly addressing Disney’s feud with DeSantis. Disney has roughly 75,000 employees in the state. It appears the company is willing to leverage its position as the state’s largest taxpayer and driver of major tourism dollars to defend its theme park’s autonomy.

Iger also backed Disney’s decision to criticize Florida’s passage of the contentious education law. He said it was in the company’s best interest to take a position because it “directly affect[ed] our business and our people” in a nod to former chief executive Bob Chapek’s slow and muted response to the law, which led employees to stage a walkout.

“Those that stood in silence, in some ways, still carry the stain of indifference,” Iger said, pointing to companies that stayed silent on human rights issues during the Civil War and World War II. “So as long as I’m on the job, I’m going to continue to be guided by a sense of decency and respect and trust our instincts that when we do weigh in, we weigh in because the issue is truly relevant to our business and to the people that work for us.”

Disney didn’t respond to a request for comment.

Caitlin Huston contributed to this report.