SCOTT'S CLINICS STAND TO GAIN

If you have a $62 million investment, representing the biggest single
chunk of your $218 million in wealth, and you put it in a trust under
your wife's name, does that mean you're no longer involved in the company?

Florida Gov. Rick Scott says it does.

Scott has aggressively pursued policies like testing state workers
and welfare recipients for drugs, switching Medicaid patients to
private HMOs and shrinking public health clinics. All these changes
could benefit that $62 million investment, but Scott sees no legal
conflict between his public role and private investments.

And, experts say, under Florida law he is correct.

A few days before he took office in January, Scott moved his shares
in Solantic Corp., a chain of 32 urgent care centers, to the Frances
Annette Scott Revocable Trust. Scott co-founded Solantic in 2001 and
was involved in its operation until last year. His wife's trust now
holds enough stock in the private company to control it.

Solantic's walk-in clinics, clustered in mid-Florida and along the
east coast, handle everything from stitches and sprains to school
physicals and immunizations. Charges are posted like fast-food prices
and there's a three-day feel-better guarantee - if you're not feeling
better after three days, your follow-up visit is free. The company
partners with hospitals in several markets, including Shands
HealthCare in Gainesville.

By transferring the Solantic shares to his wife's trust, which is
represented on the Solantic board by one of his former business
associates, Scott maintains he is free from any possible conflicts.

"As I've told you, I'm not involved in that company," he said this
week when asked why he didn't sell his shares.

Unless Solantic does business directly with the governor's office,
there are no conflicts, says Tallahassee lawyer Mark Herron, an
expert on Florida's ethics laws. Most states, as well as the federal
government, forbid the kind of share shuffle Scott used.

But in Florida, nothing bars Scott from promoting policies that could
benefit a company from which his family benefits financially.

Scott supports bills that would move nearly 3 million Medicaid
recipients into private managed care plans. Solantic accepts
traditional Medicaid at only one location but it contracts chainwide
with several private Medicaid plans. If passed, the law would
dramatically increase Solantic's potential patient base.

Would the company seek contracts with new Medicaid HMOs? "We don't
have enough information at this time," said chief executive Karen Bowling.

Scott favors legislation that would require all adult welfare
recipients - about 58,000 people - to have drug tests at their own
expense. About 100,000 more would be affected by his plan to do
random drug screenings of all state employees at a maximum cost of
$3.5 million to the state. Bowling said Solantic would not bid on
that job as long as Scott's shares remain in the trust.

"We don't have centers in Tallahassee and don't have plans to open
one," she said. "I would think most of the state volume would be there."

Scott's budget slashes funding to public health departments, which
handle checkups, immunizations and travel shots for many people who
don't have private physicians. Solantic, which charges $50 for a
basic physical and recently started catering to international
travelers, could pick up some of this business.

Bowling said physicals and shots are a very small percent of
Solantic's revenues; more than half its business is nights, weekends
and holidays when most other providers (including health departments)
are closed.

Scott appoints the heads of the Agency for Health Care Administration
and Department of Health, which license, inspect and investigate
complaints against providers such as Solantic. Herron, the ethics
lawyer, said it's legal.

"It's counterintuitive to our understanding of how the world works,
but that's the law, strictly construed," he said.

Bowling dismissed worries that state regulators would be influenced
by Scott, saying both inspections and complaints are handled under a
formal process, with inspection reports publicly available. In 60
inspections at Solantic clinics since 2005, Bowling said, the state
found only seven deficiencies, all of which were quickly corrected.

Solantic has built a successful business without state help, relying
on patients who have commercial insurance, Medicare or cash. Medicaid
accounts for only 3.1 percent of all patient visits. (The company
declined to reveal revenues but said it plans to open eight new
locations this year.)

Payments by state agencies to the company have been limited mostly to
payments from the health department for disability determinations.
Solantic's return: $14 per patient.

Bowling said the disability work is subcontracted through a company
that handles workers' compensation cases. "It's the smallest
percentage of our revenues," she said.

But as Solantic has grown, so too have the number of state agencies
using its services. And in the urgent care business, high volume,
along with low overhead, is crucial to profits.

Bowling said Solantic billed state agencies $110,657 for services in
2010 and $20,061 so far in 2011.

Scott worked with Bowling when he was chief executive of the
Columbia/HCA hospital chain and she was a marketing executive there.
In 1997, Scott was forced out amid a federal billing fraud
investigation that resulted in the company paying a $1.7 billion
penalty. Scott, who left with $10 million in severance and $300
million worth of stock and options, was never charged with any wrongdoing.

Four years later, Scott used part of that wealth to start Solantic
with Bowling. Scott was active in the company and on its board until
January 2010, when he began his run for governor.

Charles R. Evans, a retired HCA executive who worked with Scott, now
represents Scott's wife's trust. He also is chairman of the Solantic board.

Said Bowling, "I have not discussed Solantic with Gov. Scott or his
wife since he became governor."

Scott's ownership of Solantic, particularly his refusal to release
depositions taken in a lawsuit involving the company, were heated
issues during his gubernatorial campaign. But apparently it wasn't
until after his election that Scott began tackling the question of
how he was going to handle his biggest investment - and the one with
the greatest potential for conflict - while in office.

In December, Scott's lawyers consulted informally on three occasions
with representatives of the Florida Commission on Ethics about
applicable laws and how public officials have dealt with their
investments in the past, according to the commission. Philip
Claypool, executive director and general counsel of the commission,
was present at two of those meetings, one of which took place in his
mother's living room during an unrelated trip Claypool made to
Washington, D.C., on Dec. 10.

Claypool described the meetings as "attorney-to-attorney
discussions," resulting in no public record. "Scott's lawyer (James
Fuller from Williams and Connolly) had a stack of sheets of legal
paper that apparently contained lists and lists of his investments,
which he referred to occasionally," Claypool said of the meeting at
his mother's. "I'm sure Solantic came up generally."

Scott's lawyers did not request a formal advisory opinion, which
would have triggered a vetting of potential conflicts by the
eight-member ethics commission and resulted in a recommendation that
would be binding on Scott. Instead, Claypool and his staff only made
suggestions.

"They asked us about precedents and basically there has not been much
in the way of precedent," Claypool said. "That's been the extent of
our interaction to date."

Florida's ethics commission is not allowed to initiate
investigations, but it can respond if a citizen files a complaint.

"I can't tell you why or whether what Gov. Scott did was legal; only
the ethics commission could make that determination," Claypool said.
"So far he appears to be relying on the advice of his attorneys to
comply with the law."

Kenneth Gross, a Washington lawyer and a nationally recognized expert
on ethics laws, said Florida is one of the few states where a
spouse's investments don't "tag the public official with conflict."

"It's an area that's crying out for attention," he said.

Gross said Scott retains interest in Solantic despite putting it in
his wife's revocable trust, where it can be withdrawn at will. He
said Scott should have sold his interest in Solantic.

"He may not be in on the day-to-day running of the company and that's
nice," Gross said. "But if he has ownership interest by virtue of a
revocable trust, he maintains an interest in the welfare of the company."

By continuing to hold it, Scott shows "he thinks it's a viable,
thriving business that will continue to make money for himself or his
spouse," Gross said.

Brian Burgess, the governor's spokesman, said it's not simple to sell
stock in a company that's not publicly traded. "It's not like going
onto E-trade and pushing a button," he said.

Scott was well aware that Solantic was unique among his assets in
that it was the only one, Burgess said, which was directly regulated
by the state. By putting it in Scott's wife's trust, the investment
is "publicly visible," he said.

"All of Florida knows where Solantic is parked and how it's being
treated right now," Burgess said. "He expects taxpayers to hold him
accountable and do the right thing."

Mike Fasano, the Republican state senator from Pasco County, recently
refiled a bill he has proposed for years that would require the
governor and certain other elected officials to put their investments
in a blind trust. He said Scott should have chosen that option for
his Solantic shares.

Alex Sink, Florida's former chief financial officer who lost the
governor's race to Scott, was heavily criticized for setting up what
she called a blind trust, but she knew which assets were in it. And
she used her husband's law partner as administrator. Fasano's bill
would establish guidelines for blind trusts similar to federal standards.

"A true blind trust is to turn everything over to an independent
trustee, without knowing whether the assets have been sold or where
the dollars have been invested," Fasano said. "With all great respect
to the governor, turning it over to your wife is nice, but it is your wife."

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SOLANTIC CORP.

Headquarters: Jacksonville

What it does: Operates chain of 32 walk-in clinics treating minor
medical emergencies, as well as offering physicals, immunizations and
drug screening

Locations: In Central Florida and along Florida's east coast, in
high-traffic retail areas

Most unusual location: Orlando airport

Failed locations: two clinics inside central Florida Walmarts

Biggest draw: urgent medical services

CEO and co-founder: Karen Bowling

Major investors: Gov. Rick Scott (co-founder), New York private
equity firm Welsh, Carson Anderson & Stowe

Goal: In 2006, Scott said Solantic would grow to at least 1,000
locations and become a publicly traded company

Clinic partners: 16 of 32 clinics are hospital partnerships; partners
include Shands HealthCare, Baptist Health Jacksonville, Tenet,
Bethesda Memorial and HMA