How a program promising a future is stealing that future.
December 4, 2008
Muddy laws are like muddy rivers, what goes in is seldom ever seen again. Oklahoma has a law muddier than that river bed we all call Red after a two moon monsoon.
In a nutshell this is about a state funded program handing out $100s million to unknown entities set up ostensibly to provide investment capital for new businesses. The program operates with total autonomy and anonymity. These investment managers often referred to as "pass-through entities" or CAPCOs among other names, are pre-authorized to automatically take as much as $4 in tax credits for every $1 they claim they "plan to invest" in a new business venture. The other $3 is kept by the "pass-through entity." (See our website for how this works.)
Tax credits can be sold converting future state income tax revenue to immediate cash, where as little as 25% is required to go to the business venture. The "pass-through entity" now owns 100% of the invested ownership and $3 of every $4 public dollars to split between fund managers as salaries and bonuses, and return profits to its "so called investors." Profits to keep regardless whether the business succeeds or fails!
There are no laws preventing any Oklahoma officials from being a "so called investor" or have any form of profitable interest in "pass-through entities." State lawmakers passed a law requiring every aspect of the program be kept hidden from themselves, other state officials and the public. By structuring the program to operate 1) totally independent of the budget and appropriations process and 2) hiding all information from themselves prevents any potential conflict of interest, if they "unknowingly" became involved in a "pass-through entity."
Lets summarize what we have. Public officials are free to have a financial interest in "pass-through entities." "Pass-through entities" are preauthorized to take tax credits amounting to $4 for every $1 they "plan to invest" in a business. Keeping the other $3 of public funds to cover their own salaries, bonuses and pay investor profits.
We have documentation showing tax credits taken on claimed investments shown here in chronological order: $27 million, $18 million, $32 million, $330 million, and $238 million, through 2007. A total of $945 million in claimed investments. $2 in tax credits taken for each $1 claimed to be invested comes to nearly $1.9 billion. There is no end in sight, no accountability and nothing to show.
All responses from public officials' come from the same playbook - this program which is good for the economy and creates jobs and we know of nothing illegal occurring. Interesting comments by people, no different than, by law, we are all denied access to information needed to evaluate the program?
Most will simply dismiss these claims as beyond believe. A most irresponsible position with so much at stake and the evidence including a copy of the law is only a mouse click away. The entire story, documented evidence and an actual example already costing the public over $65 million can be found at