How DeSantis used Disney’s missteps to wage war on corporate America – The Washington Post

But DeSantis was bristling about similar plans, as he soon made clear in public and private. Californians moving to Texas will “vote the exact same way they voted that turned San Francisco into the dumpster fire that it is,” he warned at a forum in April, adding that he also didn’t want “leftists” infiltrating Florida. He echoed such concerns to Disney executives, according to a person familiar with the discussions who spoke on the condition of anonymity to disclose private conversations.

Now, as they spoke about the Parental Rights bill, the divide between the two men was widening. Facing growing fury from Disney’s LGBTQ employees, Chapek expressed his “disappointment” and asked DeSantis for a meeting to address the company’s concerns, he told shareholders.

Instead, DeSantis used Disney’s turmoil as a launchpad for his boldest confrontation yet with corporate America, spearheading a successful push to strip Disney of a decades-old tax district, slamming the company on Fox News and fundraising off the clash. “You have companies, like a Disney, that are going to say, and criticize, parents’ rights,” DeSantis said. “They’re going to criticize the fact that we don’t want transgenderism in kindergarten and first-grade classrooms.”

As major corporations have increasingly taken stands on issues like voting rights, LGBTQ protections and police violence, DeSantis has seized a leading role in redefining the GOP’s relationship with companies that were once a bedrock of Republican support. Even amid a party swinging hard toward populism, DeSantis has sought to separate himself from other Republicans not just by picking culture war fights, but by attacking the concept that corporations are beneficial to America.

In Florida, DeSantis has infuriated cruise lines by signing a law banning businesses from verifying vaccination status. He blocked state funding for a Tampa Bay Rays baseball facility after the team donated to a gun violence prevention program after the Uvalde, Tex., mass shooting. And he signed what became known as the Stop Woke Act, which bans businesses from requiring that employees receive certain types of training about racial diversity. Signing the law in April, DeSantis said, “We will not let the far-left woke agenda take over our schools and workplaces.”

The approach has helped elevate DeSantis into a leading threat to former president Donald Trump’s dominance of the Republican Party, putting him in a strong position to win his reelection campaign as governor this fall and potentially to challenge Trump in 2024 for the White House.

It’s also coincided with a surge in fundraising that has enabled DeSantis to raise more for a gubernatorial bid than anyone in Florida history. His campaign and political committees have collected a combined $180 million, according to state records, including millions from big businesses and billionaire tycoons. The message to Florida companies has been to stay out of the culture wars or pay the price — and many have continued opening their pocketbooks for him.

Al Cárdenas, a former chairman of the Florida Republican Party, said that many businesses believe DeSantis is “someone they will have to work with for the next four years, so donations are not drying up. I believe they are now more pragmatic.”

DeSantis has increasingly articulated his attacks on corporate America to audiences, including in a Sept. 11 speech to the National Conservatism Conference where he noted that when President Ronald Reagan was elected in 1980, “it was really big government that was to blame” for the nation’s problems.

Today, DeSantis said, the villain is “big corporations” — a line closer to traditional Democratic attacks. That followed a speech earlier this year in which DeSantis said: “What I tell conservatives is you can’t just say private companies can do whatever the hell they want to. They are not the friend of conservatives right now. They are not the friend of the foundations of this country. And so they’re using their economic power to advance harmful ideologies.”

No single fight with corporations in his tenure has been as consequential or surprising as DeSantis’s war with Disney. A reconstruction of the events by The Washington Post through interviews with key players, documents and other sources reveals how Disney’s missteps set the stage for the conflict, as its army of 38 lobbyists in Tallahassee failed to change or halt the bill, and Chapek declined for weeks to speak publicly about it. Chapek later apologized for his actions, which led to internal protests and a public backlash, saying employees had helped him understand “how painful our silence was.” The conflict also highlights the careful political calculus of DeSantis, who had previously said little publicly about gay rights issues.

“When Disney stumbled, DeSantis pounced,” said a person familiar with the episode who spoke on the condition of anonymity to describe private discussions. “They served it up to him on a silver platter.”

Disney declined to comment. A DeSantis spokesperson did not respond to a list of questions submitted by The Post.

Even some of DeSantis’s staunchest allies in the business world have watched uneasily as his clash with Disney escalated. Citadel hedge fund CEO Ken Griffin, who has given DeSantis’s political committee $11 million in the last two cycles and who is moving his own business to Miami, said earlier this year that “I don’t appreciate Governor DeSantis going after Disney’s tax status. It can be portrayed, or feel, or look like retaliation.”

He added, “It’s important that the leaders in both parties stay above the fray when it comes to retaliation against corporate America.”

‘Amazon will kneecap you’

DeSantis’s own relationship with the business world began before he entered politics. And it provided a lesson about the power of major corporations.

After serving as a Navy JAG lawyer, and as he began work on a book that bashed President Barack Obama, DeSantis joined two classmates to co-found a company in 2009 called LSAT Freedom, an online course for law school applicants. DeSantis took a leading role their ads, pledging in one YouTube clip that recently had just 400 views that “you’ll be able to almost know that they’re going to ask a certain question as you’re going through.”

But the firm soon faced pressure from major corporate competition. “Initially, we did very well,” said Robert Fojo, one of the company’s co-founders. “And then many of the big-box companies jumped in and starting launching their own version. And so we didn’t have the marketing recourse to compete with them.”

DeSantis, who noted his stake in LSAT Freedom in 2012 and 2013 campaign disclosures but reported no income from it, has not spoken in detail about the company’s finances but has talked about small firms in a similar position.

“What happens when you try to start your own thing? Amazon will kneecap you. They will all come and kneecap you.” (Amazon founder Jeff Bezos owns The Post.) He said the “big monopolies … have more power over our society than the monopolies of the 20th century ever did.”

From the beginning of his political career, DeSantis has showed a willingness to take aim at industries that wield power in his state.

In the House, he opposed the sugar subsidies that have propped up one of his state’s key industries for decades. And when he ran for governor in 2018, he blamed the industry for water pollution. Big Sugar stopped sending him campaign contributions and poured hundreds of thousands of dollars into a committee supporting DeSantis’s primary opponent, Agriculture Commissioner Adam Putnam.

As Trump and other Republicans took populist aim at what they called the “woke” agenda of some companies, DeSantis gained notice by opposing vaccine and mask requirements — and making it clear that there would be consequences for Florida companies that speak out on social issues.

After the Tampa Bay Rays tweeted that mass shootings such as the one that left 21 dead in Uvalde “have shaken us to the core” and made $50,000 donation to gun violence prevention, DeSantis blocked $35 million in state funding for the team’s spring training facility, saying it would be “inappropriate to subsidize political activism of a private corporation.”

DeSantis has faced some backlash from businesses and courts, such as a ruling from U.S. District Judge Mark Walker in August that the Stop Woke Act is “impermissibly vague,” violates the First Amendment and has a provision “bordering on unintelligible.”

His fundraising prowess hasn’t suffered. His record haul includes $146 million to a political committee that — unlike a campaign committee limited to $3,000 per individuals in a cycle — can take unlimited donations. In all, 94 percent came from donors who gave more than $200, according to an analysis by Bloomberg. That includes millions from major Florida industries including the lodging and tourism business; finance, security and real estate companies; and lawyers and lobbyists, according to campaign finance reports.

Some of the largest sums come from a handful of individuals. Griffin, the Citadel CEO who is moving his company from Illinois to Florida, gave DeSantis’s political committee $5 million in this cycle, in addition to about $6 million in the prior cycle. A Nevada hotel and aerospace executive, Robert T. Bigelow, gave $10 million in July. Griffin and Bigelow declined to comment.

Companies may be apprehensive about how DeSantis has gone after some of them but most have concluded that conduct is balanced by the state’s corporate-friendly tax and regulatory policies, said Cárdenas, noting his own opposition to the governor’s “provocative statements about immigration or Disney.”

“What the governor says, I don’t really see translating to policies that hurt the corporations in this state,” Cárdenas said.

Behind the scenes

At first, DeSantis had little involvement with the bill that would lead him into open conflict with Disney and the LGBTQ rights community.

The bill was introduced in the House by Rep. Joe Harding and signed onto by state Sen. Dennis Baxley, a Republican with a history of controversial comments on gay rights. It bans teaching on “sexual orientation or gender identity” through third grade or if it’s not “age appropriate or developmentally appropriate.” As it neared a Senate vote in March, DeSantis stressed it wasn’t his idea.

“This wasn’t, like, my legislation, like, I have certain big priorities that we did, this is something the legislature felt strongly about,” DeSantis said, while pushing back on the “don’t say gay” name bestowed by critics by noting the phrase doesn’t appear in the legislation. “So I start getting asked about this by the media and … I didn’t even look at the bill yet. I just knew it wasn’t true.”

Disney made a strategic decision to work behind the scenes to reshape the legislation, while declining to make its position public. Despite its army of lobbyists in Tallahassee, the company made no headway. Baxley said Disney never contacted him.

“I never heard from any Disney lobbyist,” Baxley said, calling it “a strategic error that they didn’t get involved until after it was on the governor’s desk.”

State Sen. Shevrin Jones, a Democrat and the only openly gay Florida state senator, said in an interview that he pleaded at the time with Disney officials to publicly oppose the bill, but they refused. Jones, who taught biology and chemistry at a Florida high school, also said he wrote to DeSantis requesting a one-on-one meeting, but he said he got no response.

“The Disney CEO, he didn’t want to get political,” Jones said in an interview. “But when you’re playing with people’s lives and people’s safety … that’s dangerous.”

By March, though, amid rising public protests and internal pressure from employees, Disney’s executives met in their Burbank, Calif., headquarters to discuss whether to take a public stand against the measure.

Front and center was Chapek, the top executive since 2020. Chapek had spent three decades at Disney but lacked the strong bond with the company’s creative side enjoyed by his predecessor, Robert Iger, who only two months earlier had stepped down as board chairman. Now, Iger had turned up the heat on Chapek by taking sides on the Florida legislation. Quoting President Biden’s assessment that it was “hateful bill,” Iger tweeted that “if passed, this bill will put vulnerable, young LGBTQ people in jeopardy.”

Chapek turned to Geoff Morrell, whom he’d had recently brought into the company as the chief corporate affairs officer. The former ABC News White House correspondent and Pentagon press secretary advised Chapek not to take a position on such divisive legislation, suggesting that Disney should maintain its status as an outlet for unifying people. (Morrell left the company after three months, saying it wasn’t the right fit. He declined to comment.)

Chapek took the advice to heart. Although he met on March 4 with a group of employees representing the LGBTQ+ community, he then sent a mass email saying that Disney had no intention of making a public statement because it could “divide and inflame” the situation. Chapek declined an interview request.

His message backfired. LGBTQ workers at Disney’s Pixar Studios sent a mass letter alleging that they had frequently been censored. “Nearly every moment of overtly gay affection is cut at Disney’s behest,” the Pixar employees wrote. And as the bill passed the state Senate on March 8, Disney employees staged walkouts and created a website aimed at their boss called whereischapek.com.

That’s when Chapek called DeSantis to plead his case for a meeting and a pause on the legislation. Chapek told shareholders Disney was concerned the law could “unfairly target gay, lesbian, nonbinary and transgender kids and families.” By the call’s end, he thought DeSantis had agreed to sit down with him and Disney officials representing the LGBTQ community, as he later told investors.

But that meeting never happened, according to Disney.

The next day, March 10, Fox News published a video of DeSantis striking back at Disney for having “made a fortune off being family-friendly” while opposing the bill. Then DeSantis’s reelection committee sent out a fundraising email titled “Woke Disney Falls to the Media Pressure,” accusing the company of repeating “phony hysteria over a Florida bill that sensibly prohibits K-3rd graders from being indoctrinated with transgenderism and R-rated lessons about sexuality.”

Chapek, meanwhile, issued a statement to Disney employees acknowledging his missteps, saying: “It is clear that this is not just an issue about a bill in Florida, but instead yet another challenge to basic human rights. You needed me to be a stronger ally in the fight for equal rights and I let you down. I am sorry.”

When DeSantis rebuffed Chapek and signed the legislation on March 28, Disney responded with its most searing statement yet, saying the bill “should never have been signed into law,” and that the company’s goal now was “for this law to be repealed by the legislature or struck down in the courts.”

Pushing the battle

The day after Disney’s call to repeal the bill, Tucker Carlson’s show aired video of a Disney companywide virtual meeting about LGBTQ issues that had been held a week earlier.

DeSantis joined the show as Carlson played a clip of a Disney executive explaining that she has “two queer children, actually, one transgender child and one pansexual child,” and arguing that Disney didn’t “have enough leads and narratives in which gay characters just get to be characters and not have to be about gay stories.”

DeSantis alleged that the clip showed how Disney was trying “to have transgenderism injected into kindergarten classrooms or woke gender ideology injected into second-grade classrooms.”

The governor was ready to push his battle with Disney beyond dueling statements.

An opportunity arose when DeSantis called a special session, which met in April to redraw congressional district maps. With legislators streaming back to Tallahassee, DeSantis asked them to approve an unrelated proposal: take away Disney’s special taxing authority.

It was a bombshell for which Democrat lawmakers said they had no preparation. Through what is known as the Reedy Creek Improvement District, Disney has since 1967 in effect been allowed to levy a separate taxation system on a 25,000-acre area in Orange and Osceola counties that includes four theme parks and hundreds of millions of dollars’ worth of infrastructure.

DeSantis’s critics noted one particularly crucial development in the vote. The measure would need support from Senate President Wilton Simpson, who was running in a primary for agriculture commissioner against Chuck Nadd, an Army veteran who called himself a “DeSantis Republican.” DeSantis withheld his endorsement in the race — until the bill passed, when he endorsed Simpson and Nadd dropped out. Neither DeSantis nor Simpson responded to questions about the timing of his endorsement.

DeSantis declared he took action because Disney had “gotten massive tax breaks” and “more subsidies from the state of Florida than any company in our state’s history.”

But State Rep. Anna Eskamani, an Orlando Democrat whose district is near Disney World, said she has never gotten support from DeSantis in her efforts to close corporate tax loopholes as the ranking Democrat on the tax-writing Ways and Means Committee. She cited a report in the Orlando Sentinel that 99 percent of Florida companies didn’t pay corporate income tax, which has a 5.5 percent rate, due in large part to loopholes and deductions.

“The majority of DeSantis’s money comes from corporate megadonors, and despite his rhetoric, he has done nothing to address corporate tax loopholes,” Eskamani said in an interview.

Indeed, before DeSantis complained about Disney’s tax breaks, his administration in 2020 approved the company’s application for what would be one of the largest tax gifts in state history to a single corporation: a $578 million tax break for the 2,000 high-paying jobs, called Imagineers, to Orlando.

Everything seemed on track for the move to be complete by 2023. Disney announced it was spending $864 million to buy property to move a sizable portion of its California-based Imagineers, widely seen as the creative lifeblood of the company, to an Orlando area called Lake Nona.

But after the passage of the Parental Rights bill, the already troubled project was thrown into chaos. Some Imagineers had already resisted the move. A group of Disney employees, including a number of those who would be required to move to Florida, called on the company to guarantee that no one would lose their job if they refused relocation, citing the “hateful legislation.” And DeSantis, in his speeches and talks with Disney, suggested his unease with the jobs coming from a blue state.

After the legislative fights were over, Disney announced in June it was suspending the relocation plan until 2026, citing construction delays and a desire to provide “flexibility to those relocating.” The company made no reference in the announcement to the Parental Rights in Education Act, its feud with DeSantis or the governor’s concern about transferred workers who might vote for Democrats.

‘Not backing down’

DeSantis outmaneuvered Disney in the legislature, but it remains unclear how — or even whether — Disney will feel the effects of the governor’s moves to target the company after the bill passed.

Democrats have said the pending elimination of the taxing district measure was a political stunt that could result in $1 billion in debt being transferred to local taxpayers. Orange County’s tax collector, Scott Randolph, has estimated Reedy Creek collects $105 million for services that would have to be replaced.

Local officials have said they are concerned residents could see their taxes go up to pay for services previously performed by the Reedy Creek district. DeSantis has said he would come up with a proposal to ensure there is no increased tax burden on local communities.

The result, according to North Carolina State University accounting professor Christina Lewellen, who has studied the matter, is the opposite of how some have portrayed it. Far from losing tax breaks, Disney stands to save hundreds of millions of dollars, while local citizens potentially pay more taxes and promised new jobs are delayed or do not arrive.

“They were trying to hurt Disney potentially and make their life more difficult, but yet in the end, from a monetary standpoint, they might end up better off,” Lewellen said in an interview.

There appears no chance that Disney can or will pack up its theme parks and move elsewhere, given the depth of its investment in the state. But the long-term plan for Disney to move many of its highest-paying jobs to the state has at least stalled, and may flame out, prompting other governors to court the company.

LGBTQ students and their supporters, meanwhile, say the power struggle between DeSantis and Disney shouldn’t obscure the real impact of the bill on their lives. Last month, the Miami-Dade School board voted 8-1 against holding an LGBTQ History Month — a measure that had easily passed the year before.

“This is children you’re targeting that are already confused and scared about themselves,” Link Ardavin, a 17-year-old Miami high school student and transgender mane, said he would like to tell DeSantis about the impact of the legislation. “You’re trying to turn human rights and a child’s mental health into something that was purely political.”

Four days after the school board vote, DeSantis delivered his Miami speech to the National Conservatism Conference in which he said the root of many of the nation’s problems are “big corporations.”

Such companies, DeSantis said, said “are now exercising quasi-public power in terms of using their economic power to change policy in this country.” DeSantis said his actions against Disney demonstrated how he would be a counterweight to such efforts.

In using his power to take on Disney and corporate America, DeSantis said: “I’m not going anywhere. I’m not backing down.”

Alice Crites contributed to this report.