CAPCO a Trojan Horse

CAPCO (Certified Capital Companies) was a business investment scheme pitched, as the magic solution for state economic development programs. Pitched in way that officials were duped into thinking it was the traditional private sector venture capital fund (VCF). The CAPCO would manage the venture capital fund and the insurance company be the investors. The state would do nothing except issue a few tax credits. Then jobs would increase aplenty. The state only need provide the insurance companies some token tax credits as an incentive. As it turns out:

• The insurance companies were merely loaning the money, which was backed by a state guarantee.
• The tax credits were interest payments on the loan until the either the business venture was successful enough to repay the loan or the loan was called and the state paid up.
• The CAPCO's were skimming the money into their own pockets. As much as 70% in the case of Louisiana, leaving only 30% for the business ventures they were suppose to be funding.
  • Missouri: CAPCO kept 66% for profits, leaving only 34% for the businesses.
  • Louisiana: CAPCO kept 70% for profits, leaving only 30% for the businesses.
• Only a insignificant number of jobs were created. How insignificant?
  • Wisconsin $50 million and just 157 jobs.
  • Florida $75 million and just 174 jobs.
  • Rhode Island $100 million and no jobs reported.

** No officials numbers could be located, but articles describe similar results for Colorado, Hawaii, Iowa, Louisiana, New York and Washington DC.

How about Oklahoma?

Although Oklahoma refuse to release any information about this program, we have found information that when backed out suggests approximately $1 billion has been diverted to CAPCOs, and no more than 200 jobs have been created, and those only lasted a short time before the businesses failed. State officials can show no records of new jobs created.

AP reported one Oklahoma project where the CAPCO reported raising $221 million. Less than than 15% or only $32 million went to the business. CAPCO kept at least $34.3 million for profits or more than the business received. $189 million remains unaccounted for.

As soon as the above results started appearing other states soon realized, and independent experts verified teh CAPCO plan was nothing more than a very clever and lucrative profit mechanism designed to reward those behind CAPCO. Now known as a "Scam! But not until several states had poured $100s million into CAPCO's pockets with nothing to show.

All other states quickly dropped shed themselves of CAPCO, but not Oklahoma. Oklahoma is the only state where officials are still defending the program while refusing to release any information that would allow the public to know what is really happening!