September 10, 2006

The sugar industry lost a huge bet on the governor's race last week, spending almost $5 million to back the loser in the Democratic primary.

United States Sugar Corp. and Flo-Sun Inc. gained little for their money but vilification from editorial pages and environmental groups. But there's little reason to think the two companies will sit out the general election, because they have a strong interest in who sits in the governor's office.

The new governor will appoint the leaders of the South Florida Water Management District, Florida Department of Community Affairs and Florida Department of Environmental Protection. These agencies exercise authority over the companies' vast land holdings along the southern and eastern shores of Lake Okeechobee, where cane fields stretch to the horizon and sugar refineries fill the air with the aroma of molasses.

"We're tired of being picked on," said Gaston Cantens, spokesman for Flo-Sun, based in West Palm Beach. "Everyone wants to say we're the problem in the Everglades. We've had to become politically active to protect ourselves."

The two South Florida sugar giants are struggling to comply with a federal mandate to reduce phosphorus pollution washing from their fields into the Everglades. Gov. Jeb Bush pushed to end a federal judge's oversight of the cleanup, and they hope to have an ally in the next governor.

The industry needs favorable decisions from the South Florida Water Management District, which oversees water supplies, drainage and pollution control. The new governor will name every member of the district's governing board.

And some environmentalists and political leaders say it's only a matter of time before the difficulties of the sugar business and the shortage of affordable housing combine to lead both companies to try to transform their emerald-green fields into subdivisions, schools and strip malls. Such a plan would require support from the governor, as well as approval of the Florida Department of Community Affairs for major zoning changes.

"What's going to happen after sugar?" asked former U.S. Sen. Bob Graham, a supporter of Democratic nominee Jim Davis. "U.S. Sugar wants to develop that land. Development. That's the issue."

In the Democratic primary, the two sugar companies backed state Sen. Rod Smith, who comes from a farming family and chairs the Senate Agriculture Committee.

They financed Florida's Working Families and the Coalition for Justice and Equality, which paid for commercials and mailings that attacked Davis for missing a vote supporting Israel against Hezbollah and for voting against compensating two black men who served long prison terms after being wrongly convicted of murder. The companies also contributed at least $600,000 to groups that backed Attorney General Charlie Crist, who won the Republican nomination.

Both companies say they backed Smith because he understands agriculture and would have been fair to them, particularly on whether they should take so much of the blame for phosphorus pollution. They say they remain committed to farming most of their land, although they expect to build some housing.

"We have two mills that represent hundreds of millions of dollars in capital investment," said Cantens, of Flo-Sun. "There will be some development around the lake at some point. But without sugar cane, we won't be able to feed those mills."

The sugar farms have also spent millions to reduce phosphorus, he said, even though much of it originates on farms north of the lake. They did so under terms of a 1991 legal settlement with the federal government, currently being supervised by a federal judge, which requires the state to halt the pollution of the Everglades.

Judy Sanchez, spokeswoman for U.S. Sugar, based in Clewiston, said that while some residential construction was possible, U.S. Sugar remains committed to agriculture.

"We are investing millions and millions of dollars enlarging and modernizing our mill in Clewiston," she said. "We need every acre of cane to stay in cane to feed that mill. Sure there will be some development, and that's because we're selling less sugar and need to find other uses for the land. But if you take all your land out, you lose efficiency at your mill."

U.S. Sugar owns 160,000 acres of sugar cane and 32,000 acres of citrus. Flo-Sun owns 180,000 acres of sugar, rice and corn.

Many environmentalists still think the companies will build new towns in the cane fields, which are a straight shot down U.S. 27 from the expanding office complexes of western Broward County. Two years ago Florida Crystals, a subsidiary of Flo-Sun, proposed a town on 14,500 acres of cane fields, as part of a plan to lure Scripps Florida to its land. Flo-Sun is moving forward with plans to build houses on 800 acres near Belle Glade.

Charles Lee, senior vice president of Audubon of Florida, said the sugar industry wants a supportive governor to win approval for the extensive land-use changes it would need to develop the Everglades Agricultural Area, the core farm region south of the lake.

"There's a tremendous amount the governor will have to say on what happens in the Everglades Agricultural Area," Lee said. "They want a bought-and-paid-for governor to do their bidding in helping the Everglades Agricultural Area turn into western Dade or Broward."

Even if the sugar companies stick to farming, they need a good relationship with the South Florida Water Management District. The district's board currently includes a senior vice president of U.S. Sugar.

"In the current water management district, sugar has friends," said Eric Draper, a lobbyist for Audubon of Florida and a former chief of staff to Jim Davis in the Florida House. "Their whole future is governed by water-use permits and water-discharge permits. The entire Everglades water management system is run for the benefit of the sugar farms. They get water when it's dry, they get drained when it's wet."

Daniel Smith, associate professor of political science at the University of Florida, said the sugar companies' spending came close to bringing its candidate the nomination. But he said they would be smart to avoid a repeat of such a heavy-handed approach in the general election, because Crist will likely raise much more money than Davis, and the association with "Big Sugar" can hurt a candidate.

"It may be time to sit in the back seat," he said. "Much of the damage has been done against Davis. They certainly don't want a backlash effect against Charlie Crist."

But Charles Lee, of Audubon, said he expects to see industry's shadow over the general election.

"They took a gamble," Lee said. "They wanted to buy a governor, and I'd be surprised if their efforts are over."