Like the 1,000s of other pages of evidence uncovered and descriptions of crimes on this site, this web page is only one part of a massive multi-state entanglement of government corruption and cover-up. See size

April 7, 2009

The Scissortail Fund tax credit scheme. Another CAPCO has obtained what appears to be a legitimate copy of a letter sent under a Century Advisor cover seeking investors in a venture Capital fund consisting of 3 similarly named LLCs which will all be referred to as Scissortail or the CAPCO in these descriptions. Funds raised are to be invested in new business ventures referred to as Portfolio Companies. What follows is my interpretation of the plans described in these documents.

Here is the crux of the problem.

This Oklahoma's tax credit incentive program was created to stimulate venture Capital investing. Venture Capital is a type of private equity Capital provided to early-stage, high-potential, growth companies in the interest of growing businesses that will be the basis of our future economy. These are the companies that do not have the assets to qualify for traditional loans, and are risky.

The CAPCO, Scissortail's plan requires "the Portfolio Company must have a large enterprise valuation and a large amount of unencumbered assets that would support a repayment of the Fund's investment."

Scissortail eliminates the very businesses venture Capital was created to assist, in direct contradiction to creating future growth and the goals set out in Oklahoma's Capital Formation Incentive Act.

These documents describes the same scheme used by CAPCOs  banned in other states where officials and leading experts declared CAPCOs   "a scam," "raid on the state treasuries," flawed beyond repair" and "one of the biggest rip-offs out there," etc, etc...

Key issues

Why would the Oklahoma Tax Commission (OTC) issue a "determination letter" legitimizing a scheme that could be used to financial burden rather than assist innocent businesses seeking financial help to grow?

The Scissortail fund bridged the 2006 amendment to the tax credit incentive program, which included a grandfather section allowing funds like Scissortail, which had previously received a "determination letters" before March 15, 2006, to complete those investments by November 1, 2006. That grandfather section also stated "no credit shall be allowed unless: The "investor's funds were at risk" and "the investment was not made chiefly for the purpose of reducing tax liability."

In addition Scissortail's pre March 15, 2006, "determination letter" included in these documents was based on $15/90 million. The letter soliciting investors and referencing an October 12, 2006, OTC letter stated the $15 million had been raised to $60 million, which would have proportionally pushed the $90 million to $540 million. Raising the questions was the grandfather clause misused and are "determination letters" treated as signed blank checks that allows CAPCOs to just fill in the blanks?

See a simplified description of the Scissortail plan. Next

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