Oklahoma (June 24, 2008) - The public misled into believing the tax credit abuse loophole was closed?
A law so egregiously wrong, even with the public denied access to the evidence, no reasonably intelligent person need see proof of an actual act to see the wrong.
A loophole that originally appeared when according to Senator Ted Fisher "the abuses started after some unknown person 'tweaked' the law, and he failed to notice."
A tax credit abuse loophole, both the abusers and state officials claimed was/is "not illegal," is still being used to take millions ($630 million more) in unearned profits, using the same artificial loans (borrowed money that was not put at risk) to inflated the so called investment to nearly 7 times the actual investment. Tax credits they are allowed to immediately sell resulting in nearly twice the investment in cash.
A close examination (no trivial task) of the 2006 law (the Capital Formation Incentive Act enacted as Senate Bill 1577),
the public was led to believe closed the loophole, reveals no changes to protect the public in favor of changes to reduce the possibility
of those behind the abuse be found violating the law. Along with other changes that allow the abusers keep any money obtained wrongly,
in the event they are found doing some wrong. As a result the abuse has greatly increased.
All while state lawmakers and officials working to strip the public of the constitutional protection against wrong doing!
1. What were the changes to the law?
A. Language was added officially authorizing the taking up to 200% in tax credits. Section 9 & 20.B.4.a & b
B. Language changing the required investment from a "cash investment" to a "qualified investment." Several sections including. 2.B, 8.B, 9.B, 19.B and 20.B
C. Language allowing borrowed money to serve as a qualified investment.
D. Language that exempt the recapture of tax credits taken, by certain entities, under acts, that could later be determined as wrong doing. Section 22.G
In summary -- A, B and C made the loophole legal. Still wrongs remain that couldn't be protected, precipitating (D) to help the abuser and
their tax credit using customers from being forced to return ill-gotten gains.
There are two primary elements of the law that insure state officials never perform any act that could constitute a conflict of interest.
1. The program was setup to run with total autonomy. Without any involvement, by any state, official at any level, including but not limited to -- requires no review or approval, no prior funding, no state official or agency assigned the responsibility for oversight, no accountability and no requirement the public receive anything in return.. However, "Deliberate Ignorance" is still an un-escapable federal crime as we learned from both the Enron and Jeff McMahan cases.
Note: There is a "letter of determination," another totally automatic function, described elsewhere.
2. Conflicting report language that allows delaying until October 1, 2010, for meaningful reports to reach the only 3 state officials required to receive reports. Reports are only provided in even years. An examination of the time line reveals the first report to be received October 1, 2008, will show very little meaningful information.
See the Capital Formation Incentive Act, mapped and diagram to bring out the wrongs.
Future mailing will address
- the cover-up.
- suspicious campaign donations.
- how the law was slipped by a negligent lawmakers in a way they could claim they didn't have time to read, freeing them, in their opinion, to benefit without a conflict of interest.
Examples, specifics and background including a detailed examination of the Capital Formation Incentive Act and suspicious campaign
donations can be found at http://prowlingowl.com focusing on exposing Oklahoma's massive tax credit abuses