In a rush to add accomplishments to Florida Gov. Rick Scott’s highly political job creation agenda, his administration’s Department of Economic Opportunity in 2014 violated federal law to make a deal to provide financial incentives to a U.S. company with ties to the Russian maker of the Kalashnikov semi-automatic assault rifle, which at the time was subject to sanctions put in place by the U.S. government.
The Republican governor’s administration knew when it offered $162,000 in tax refund incentives to Kalashnikov USA to create 54 jobs “that the company was doing business with a Russian arms giant that was blacklisted by the U.S.,” reports the Florida Bulldog.
Kalashnikov USA, which operates its primary USA facility in a non-descript 40,000-square-foot Pompano Beach, Florida warehouse with no signage, became the focus of public attention in late February when a small group of protesters gathered in front of the building.
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They were students and their friends from Marjory Stoneman Douglas High School in Parkland, Florida, about 13 miles away, from where Nikolas Cruz murdered 17 students and faculty on Feb. 14, protesting the state paying to bring in an importer (which was relocating from Pennsylvania) of the deadly weapons.
One of Cruz’s weapons was an AK-47 style rifle that he bought at a local gun shop.
While Cruz did not use it to kill that Valentine’s Day, “his purchase drew attention to civilian versions of one of the most famous Russian inventions of the 20th century,” Bloomberg BusinessWeek reported last month.
Kalashnikov Concern JSC is a Russian state-owned arms manufacturer, whose signature guns are the most widely available semi-automatic weapons in the world, that was put on the U.S. government sanctions list by President Obama’s Treasury Department in July 2014 in response to the Russian invasion of Ukraine.
Once in place, the sanctions froze Concern Kalashnikov’s U.S. assets and prohibited anyone in the U.S. from doing any business with it of any kind.
A confidential 2015 memo by the Florida Department of Economic Development, which the Florida Bulldog obtained using the Freedom of Information Act, “notes the imposition of the U.S. sanctions” led the U.S. affiliate to redefine “it’s business model from U.S. importer of the products to U.S. manufacturer.”
What that appears to have meant is that while the company claimed the guns were made in the U.S., they were actually just being assembled in America.
Kalashnikov USA insisted it was not violating the sanctions because it cut ties to Russia, reports Bloomberg BusinessWeek: “A closer look reveals an intricate web of interlocking shell companies, some set up since sanctions began, that connects Kalashnikov USA executives to top allies of Russian President Vladimir Putin.”
“Shuffling ownership of companies is a tactic some Russian businessmen have used to hide stakes in properties,” Mark Galeotti, director of Mayak Intelligence, a Prague-based research firm focused on Russia and transnational organized crime, told Bloomberg BusinessWeek.
“Gov. Scott’s DEO appears to have accepted Kalashnikov USA’s assertion without much inquiry,” reports the Florida Bulldog.
A July 2015 memo about the state’s “thorough review” of the application for incentives was no more than an online search, which led the agency to announce it found no reason to disapprove the award of the incentives.
Ultimately, while the state of Florida made a formal offer of incentives in 2015, the whole deal was killed last year after the company failed to create the promised jobs, and no money was ever paid out.
The point is that Scott and the state had no problem with wooing a gun seller tied to a Russian company even after it was the subject of sanctions because it would have given the governor more jobs to point to as his accomplishment while in office.
Once again, we can thank the teenage activists from Parkland for helping shine a light on this dirty, deceitful, deadly business, which illuminates Florida’s carelessness in its rush to justify its own existence.