Politics & Government

Ex Gov. Chiles' family threatens suit over Florida budget

TALLAHASSEE -- In stark and angry terms, the family of former Gov. Lawton Chiles is threatening to sue Gov. Charlie Crist and legislative leaders if they try to balance the budget by raiding a trust fund for children and seniors that the state established with the huge settlement from a tobacco case and named for the now deceased governor.

''Depleting the endowment that invests in the present and future success of our children is an affront to all Floridians,'' Bud Chiles, son of the former Democratic governor and senator, wrote in a letter to the lawmakers Friday.

''It is unconscionable that the state is willing to put children's lives and health on the line by destroying one of the only reliable funding sources available,'' Chiles wrote, ending the letter with a clear threat: "If the state chooses to raid the fund, we are fully prepared to seek full relief in the courts.''

The letter was addressed to Crist, House Speaker Ray Sansom and Senate President Jeff Atwater, all Republicans. Sansom's and Atwater's offices say they're reviewing the letter.

''We have received Mr. Chiles III's letter regarding the Lawton Chiles Endowment and the governor appreciates his thoughts,'' Crist's office said in a written statement. "Gov. Crist is currently reviewing all options to balance Florida's budget during these challenging economic times.''

The letter adds an unexpectedly personal edge to Florida's budget crisis and Crist's role in managing it. Next Friday is the 10th anniversary of the death of Chiles, an iconic figure known as Walkin' Lawton.

The budget now has a $2.1 billion hole. To fill the hole and avoid raising taxes, Crist and legislators are eyeing dwindling savings accounts and trust funds -- including the Chiles Endowment, which has lost nearly half its $2.1 billion value since June.

''They need to show leadership and think of other revenue sources, not just raiding savings,'' Bud Chiles told the Herald/Times. He said he favors an additional $1-a-pack cigarette tax.

Chiles said that if Crist and the Legislature gut the endowment, the family will ask that Lawton Chiles' name be removed. ''This is not what my father stood for,'' said Chiles, 55, a real estate investor and president of the Lawton Chiles Foundation, a nonprofit that advocates for children.

Operating as an annuity, the endowment uses money from interest earned from investments to help poor children and senior citizens. It was enshrined in law as a ''perpetual source of enhanced funding'' -- the grounds for a possible lawsuit if the state empties the fund.

Gov. Chiles' successor, Gov. Jeb Bush, established the endowment in 1999 using about 10 percent of an $11.3 billion lawsuit settlement with tobacco companies that Chiles had pushed through.

As a state senator, Crist held hearings in 1998 on the secrecy surrounding the passage of a law that allowed the state to sue tobacco makers . Chiles even testified twice before Crist's committee.

Chiles dismissed the hearings as a publicity stunt by Crist, who ran unsuccessfully against U.S. Sen. Bob Graham that year. Four years previously, Crist held hearings over Chiles' campaign tactics when he beat Jeb Bush in the 1994 gubernatorial election.

''The tobacco fight was a huge battle,'' said Bud Chiles. ``It doesn't go past our attention that Gov. Crist opposed him in that effort.''

But last spring, as the state's budget crisis worsened, Crist realized he needed help from the Chiles family. He called Chiles' 78-year-old widow, Rhea Chiles, to ask her if she would support an effort to allow him and the Legislature to borrow up to $1 billion from the endowment to cover future budget gaps.

The catch: The state would have to pay the money back. At the time, the fund was worth $2.1 billion.

Rhea Chiles agreed to support the loan. But she rebuffed a Crist request to honor her at the governor's mansion, saying in a June 11 letter to Crist that he presented an ''intolerable prospect'' of cutting more health and human services.

''When, in two years, this loan is fully repaid to the Fund, I will be greatly relieved and most happy to celebrate with you,'' Rhea Chiles wrote Crist.

Legislators in September gave Crist the authority to divert $354 million from the fund. Since then, the value of the fund shrank as the stock market tanked. It now has $1.2 billion available.

The state's chief investment analyst, Ash Williams, and Chief Financial Officer Alex Sink -- the only Democrat on the state Cabinet -- have said the state would be shortsighted if it cashed out its investments in the Chiles fund at the bottom of the market.

Marc Caputo can be reached at mcaputo@MiamiHerald.com