Audit of Disney’s former special district details ‘cronyism’ ultimately abolished by Florida

LAKE BUENA VISTA, Fla. – An audit released by the Central Florida Tourism Oversight District detailed the “most egregious exhibition of corporate cronyism in modern American history” between Walt Disney World, the company’s special district and the Florida government.

The audit, obtained by Florida’s Voice, said Florida’s establishment of Disney’s own independent special district in 1967 was a “step stool” that “allowed Disney to tower over rivals and almost certainly dissuade others from even entering the arena of market competition.”

The report was prepared for Gov. Ron DeSantis and the Florida Legislature.

“Complacency and an absence of political will allowed Disney to use the public-private partnership to entrench and amplify its corporate power,” the report said. “That changed in 2023, when Governor DeSantis and the Florida Legislature decided to fix the anti-competitive arrangement between Disney and Reedy Creek.”

The audit explained that the company effectively had total control over the district that was meant to govern and regulate Disney via requiring board members own property in the district and paying off those property tax liabilities.

Disney reportedly temporarily deeded board members 5-acre plots of land to hold during their tenure.

The report flamed Disney for giving board members an “improper cash gift” and said these actions are “further evidence of their capture by Disney.”

It slammed Disney for creating the board to “serve Disney” despite “scores of other taxpayers also located in the District.”

“Disney also received control over two ‘cities’—the Cities of Bay Lake and Lake Buena Vista,” it said. “Neither city has any employees, and each has only a handful of residents who are also Disney employees renting mobile home plots from Disney.”

“These arrangements gave Disney something unique in all of Florida: the power to govern itself, free from outside interference, through a pocket government that Disney controlled,” the audit continued.

Aside from Disney’s policies towards board members, the report said the company gave district employees repeated gifts and “lavish spending,” a sign to the auditors that the district was not meant to serve property owners or the district, but rather Disney itself.

“Disney cultivated this perspective by making complimentary annual passes and steep Disney discounts available to RCID employees, retirees, members of the Board of Supervisors, and other VIP vendors on the same terms as Disney employees, known as cast members,” it said. “Initially, Disney provided these benefits free of charge; later, the RCID began reimbursing Disney for these expenses, which amounted to millions of dollars annually in recent years.”

It labeled those gifts to employees “bribes of public officials and employees.”

The report laid out specific gifts given to district employees, which include “millions of dollars of annual passes for entry to Disney theme parks worldwide,” 40% discount on Disney cruises, transferable single-use tickets during the holidays, discounts on merchandise, food and beverage, and access to private shopping typically reserved for cast members with steep discounts.

The audit was conducted by district-hired “experts”: Donald J. Kochan from George Mason University Antonin Scalia Law School, William Jennings of Delta Consulting Group, Kimley-Horn with experience in urban planning, Public Resources Advisory Group to serve as an independent financial advisor, and Raftelis to serve as a utility rate-setting expert.

The report’s release comes amidst an ongoing legal battle between the district, selected by DeSantis, and Disney. It noted an “eleventh hour” agreement, before the former district was to be abolished under new Florida law, where Disney gained all development rights, utility advantages and other benefits.

This action, the report said, prompted legal action by the district.

Disney had sued DeSantis in federal court while the district sued Disney in state court. Both cases are ongoing.

“This lawsuit is yet another unfortunate example of their hope to undermine the will of the Florida voters and operate outside the bounds of the law,” then-deputy press secretary for DeSantis Jeremy Redfern said in April.

The governor had enacted the new district in February. Rep. Fred Hawkins, R-St. Cloud, sponsored the legislation.

In 2022, when the battle over parental rights between Disney, DeSantis and Florida lawmakers took place, DeSantis signed the initial law ordering dissolving Disney’s special district. That legislation was brought by Rep. Randy Fine, R-Melbourne Beach, and Sen. Jennifer Bradley, R-Fleming Island.

Disney came out against the parental rights legislation and vowed to have it “repealed.”

“And I’m just thinking to myself, you’re a corporation based in Burbank, California and you’re going to marshal your economic might to attack the parents of my state,” DeSantis said in 2022. “We view that as a provocation.”

Walt Disney Company CEO Bob Iger recently commented on ongoing political and social wars in the U.S. and slammed DeSantis for violating their “free speech” with his actions.

“Punishing us for exercising our right to free speech was anti-American and antibusiness,” he said.

DeSantis recently said he has “moved on” from the dispute and defended his actions as representing treating all companies fairly in Florida.