Florida Tax Collector Starts Blockchain ID Company

Seminole County Tax Collector Joel Greenberg has launched a new company focused on using blockchain technology to manage identity. The move has raised concerns about the unusual arrangement.

by Martin E. Comas, Orlando Sentinel / September 24, 2019
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(TNS) — Seminole County Tax Collector Joel Greenberg has formed a private company as part of his government office’s plan to migrate information from drivers licenses, property taxes and other functions onto an encrypted data base using cutting-edge blockchain technology.

The company is on the second floor of a Lake Mary office building connected to the tax collector’s office. Greenberg said he plans to use the blockchain-based technology as part of a pilot program to launch a digital ID program next year.

The unusual arrangement comes as the 34-year-old Republican filed this month to run for re-election in 2020, despite saying in 2016 — before he ousted longtime incumbent Ray Valdes — that he would serve a single term as Seminole’s tax collector.

“We’re in the middle of some big projects, and I would like to see them come to completion,” he said, referring to the blockchain project in explaining why he decided to run again. “It’s taking a lot longer than I thought it would, and if I left it would mean stopping all of this.”

The Florida Department of Revenue, which oversees the tax collector’s budget, didn’t respond to questions about the appropriateness of Greenberg setting up a company to help launch a blockchain-based project in his government office.

In January 2018, the agency shot down a controversial plan by Greenberg to sell off four tax collector branch offices for $13.2 million to a Winter Springs subsidiary of a Chicago real-estate investment firm and use the money to buy several shopping centers in distressed areas.

The plan squashed by the revenue agency called for the tax collector’s office to rent out 80% to 90% of the shopping center space to commercial tenants and use the remaining space for drivers-license operations for residents in Orange and Seminole counties.

Greenberg called his latest idea a “public-private partnership” within his office.

He said he then hopes to market it and lease the blockchain-based system and virtual ID to other local governments across the country as a joint venture with other private companies.

According to state records, Government Blockchain Systems LLC was formed on July 19. Its office is within the tax collector’s administrative offices on the second floor of a four-story building.

“It’s wholly owned by the [Tax Collector’s] office,” Greenberg said.

Government Blockchain Systems’ registered agents are Greenberg and Samuel Armes, 22, a recent graduate of the University of South Florida and executive director of the Florida Blockchain Business Assocation.

Armes was hired by Greenberg in March to serve as the tax collector’s blockchain advocate and legislative affairs director.

As part of the blockchain project, Greenberg’s office plans a pilot project to build a digital identification system — or digital ID — for residents by compiling information from different state government agencies — including drivers license, voter registration, property records and motor vehicles.

The idea is to aggregate that information into a blockchain digital format that could be accessed only by a resident through their personal phone.

Greenberg gave an example of a young adult wanting to buy beer at a convenience store. Currently, the store clerk asks for a drivers license to confirm the person’s age.

But a drivers license contains information that is irrelevant to whether the person is at least 21 years old and legally able to purchase alcohol, such as their address, signature and driving restrictions.

A digital ID, on the other hand, allows the person to only share their photo and date of birth, according to Greenberg.

“It’s a much better, more secure way of keep[ing] a person’s personal records,” Greenberg said of virtual ID through a blockchain technology.

Blockchain is an online ledger, or record, of transactions spread across a large network of computers. Because the data is encrypted and uses the processing power of many computers, each step of the transaction is stored in a so-called “block” and is permanent and resistant to modifications or fraud. The “blocks” are connected in a chain.

Greenberg pointed out that “right now every county has their own little system” that stores its data within its own computer systems, making it less secure and less accurate than a blockchain-based system.

Transactions through blockchain-based systems can also eliminate financial fees, advocates say, because transactions wouldn’t have to travel across several banks or other financial institutions.

Blockchain is more commonly known as being used to support virtual online currencies such as bitcoin. In June 2018, Greenberg’s office started accepting bitcoin as payment for new IDs, license plates and property taxes.

Calling it the “wave of the future,” Greenberg said his office’s blockchain-based system and virtual ID should be up and running by early 2020.

The technology “would be an asset of [Seminole] county’s,” Greenberg said. Any revenues from Government Blockchain Systems would be funneled to Seminole County, Greenberg said.

“It will be really badass,” Greenberg said of Seminole using the new technology.

Cragin Mosteller, director of external affairs for the Florida Association of Counties, said her organization isn’t aware of any other county government forming a private company.

“It’s not something that we could tell you because we don’t collect that kind of information,” she said.

Greenberg said he hopes to eventually to bring in Seminole County and the county’s other constitutional offices — including the sheriff, property appraiser, clerk of courts and supervisor of elections — into the blockchain project.

“We hope to have all this information aggregated into a blockchain where it’s safe and it can’t be altered and its transparent,” Greenberg said. “It would be much more difficult for someone to hack into the system and alter and change something — such as with drivers licenses, voter ID.”

But county officials said they currently don’t have any plans to use blockchain with the Tax Collector’s Office.

“I am not aware of any plans at this time to leverage blockchain in systems that the county supports,” said James Garoutsos, Seminole’s chief information officer, in response to an email from the Sentinel to the county manager’s office.

At a March 5 retreat attended by Seminole leaders and staff -- including Garoutsos -- commissioners Amy Lockhart and Brenda Carey discussed the county studying the use of blockchain-based technology after Greenberg first pitched plans to use it for the Tax Collector’s Office. Carey suggested the county wait to see how well it works for the Tax Collector’s office before moving forward.

Likewise, a spokesman for Sheriff Dennis Lemma said they would have to study blockchain further.

“Modernizing is certainly a good thing, and he’s [Lemma] certainly interested in the concept of digital IDs,” spokesman Bob Kealing said. “But it’s really in more of a research phase for him [Lemma].”

Seminole Commissioner Lee Constantine said he hasn’t heard about Greenberg’s plans regarding blockchain-based technology and a virtual ID system.

Greenberg formed the company two months after Gov. Ron DeSantis signed the Florida Blockchain Bill into law. The legislation created a task force within the state Department of Financial Services to study how local governments can benefit from transitioning to and using blockchain-based systems for record keeping, financial transactions and data security.

Greenberg said governments transitioning to blockchain-based technology is “the next great leap forward.”

“Ultimately, it will reduce the cost of government and improve efficiency,” he said.

As Greenberg gears up for his reelection campaign, he can expect opposition.

Brittany Nethers, chairwoman of the Seminole County Democratic Party, said her party plans to announce a tax collector candidate in the coming weeks.

“We are very excited, because we know this person will be much better for this office than Joel Greenberg,” Nethers said.

Unlike in 2016, Greenberg didn’t pledge to seek a third term if he wins again in 2020. But he said he didn’t think that would happen.

“I highly doubt that I would run for a third term. Eventually, down the road, I’ll seek higher office,” he said, without providing hints as to what that may be.

©2019 The Orlando Sentinel (Orlando, Fla.) Distributed by Tribune Content Agency, LLC.

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