The Florida state government has nabbed its first bitcoin bandit.
Yesterday Matthew McDermont, IT manager for the Florida Department of Citrus, was booked into the Polk County, Florida, jail on charges of grand theft and official misconduct. More specifically, he used department computers to mine for cryptocurrencies, including bitcoin and litecoin.
According to the Florida Department of Law Enforcement (FDLE), McDermont spent some $22,000 in department funds on the graphic cards needed for the energy-intensive mining process, which also saw him run up the agency's power bill by $856. According to a FDLE spokesperson, McDermont had netted an estimated $11,857 from his illicit activities.
Using taxpayer-provided resources for personal enrichment is both wrong and illegal, and if McDermont is guilty he deserves the penalties coming his way.
But it's not all that clear that Floridians would have been better off if the Citrus Department's resources had gone to their intended use instead.
According to its website, the Florida Department of Citrus is tasked with the "promotion, protection, and regulation" of the state's $800 million industry of orange and grapefruit growers, a mission for which this bitter bureaucracy was given $18.4 million for the 2016–2017 budget year.
About $6.4 million of this came from direct tax assessments on citrus growers and producers. Another $7.6 million came from general Florida tax revenue, and the rest came from federal Foreign Agricultural Service funds.
In turn for this generosity, the Florida Department of Citrus spent $8.6 million on public relations campaign to promote the use of those famous Florida fruits. That included a paid social media campaign aggressively pushing original content like recipes for 15-minute nachos and whiskey sour punch, along with a printable Advent calendar.
The department's annual report says its social media campaigns garnered 4.5 million clicks at the average cost of 41 cents per click. Were it not for McDermont's alleged illicit crypto-mining, taxpayers could have afforded another 55,746 clicks.
Mind you, that $8.6 million is only what the department spent promoting oranges to other Americans. Their efforts to hawk the Sunshine State's fruit on the international market cost another $4.5 million. Another $1.5 million went to the Gift Fruit program.
While there is a lot in these items that could be said to benefit the citrus industry, there is very little that can be said to benefit the individual taxpayers, both in Florida and across the nation, that fund most of the department's activities. Taxpayers are being asked to essentially support the advertising budget of a major industry that can easily afford its own promotional materials.
If McDermont is guilty, he spent thousands of tax dollars for his own private benefit. That is both wrong and illegal. His employer, meanwhile, spends millions of tax dollars each year for the private benefit of a single industry. That's still wrong, but it's totally legal.
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