Sooner Tax Tumors

Oklahoma's much needed Rural and Small Business Venture Investment initiatives were pirated and being used to scam nearly $1 Billion, in public money. The scam is growing. This is done using a little known and even less understood trait peculiar to tax credits to divert future tax revenue before the revenue appears on state books. The tax credits go to unidentified private entities who immediately sell, what they can't use, at a discount.

Diverting money before that money becomes part of the state's financial records

allows circumventing the budgeting process and hiding the cost in future non specific tax revenue short falls.
operating outside state purchasing laws to pay unidentified private entities huge sums -- without requiring any measurable results -- stripped of all oversight and accountability.

Those taking the tax credits are allowed to sell the tax credits (which they do immediately at a discount) turning to cash assets.

All part of the scheme to hide giving money to unidentified private entities with no strings attached. Leaving the public totally unprotected and unaware of how much was spent, where the money went and who is benefiting.

Note: Another $630 million in hidden tax credits has been taken through the same loophole the Governor and state lawmakers claimed they were closing in 2006. The same loophole that state lawmakers had on one other occasion thought they had closed.

A program so well hidden that one knows!

Only one state official is allowed to see what is happening? -

The legislation, Senate Bill 1577, involves a program that only one state official< in the Oklahoma Tax Commission has been allowed access. to what is happening. The legislation requires all information about the program be kept hidden from the public and state lawmakers. Section 1.C.27

The law states - Section 1.E. The Tax Commission shall prepare or cause to be prepared a report on all provisions of state tax law that reduce state revenue through exclusions, deductions, credits, exemptions, deferrals or other preferential tax treatments. The report shall be prepared not later than October 1 of each even-numbered year and shall be submitted to the Governor, the President Pro Tempore of the Senate and the Speaker of the House of Representatives. && The report shall include, for the previous fiscal year, the Tax Commission's best estimate of the amount of state revenue that would have been collected but for the existence of each such exclusion, deduction, credit, exemption, deferral or other preferential tax treatment allowed by law.

The wording of this shows tax credits could be taken, sold and converted to cash in 2006, but the full effect not revealed to the 3 aforementioned public officials for another 4 years. Reasoning is any tax credits taken after the law passed would not show until the 2007 tax returns were filed in 2008 at the earliest, and more likely for 2008 tax returns filed in 2009. Meaning the 3 aforementioned officials would not start to see the real impact until 2010, although those benefiting could have received cash payments in 2006. Ref. Capital Formation Incentive Act, Section 1.E.

Why hasn't someone else caught this before? -

The best financial frauds deceive even the experts responsible for catching these kinds of crimes. Often for long periods of time.

Financial frauds are like any complicated problem that turns out to be relatively easy to understand after someone removes all the hay from the haystack, leaving only the needle with a bright light shinning on the needle.

We have to think in terms of those protecting against fraud being confronted with recognizing a fraud in unlimited possibilities.

Success seldom comes until someone tells what to look for or until stumbling across the right combination.

Why aren't state officials doing something? -

Stories reporting abuses of this program have appeared in the press on several occasions. Only to be dismissed as relatively unimportant and unworthy of concern by public officials.

Especially noteworthy - the press has shown no appetite for challenging public official's positions and the stories quickly fade.

Here is one of many possible scenarios that could explain why?

$850 million is enough to pay

$3 million apiece to each of the approximately 150 state level elected office holders. Total approx $450 million total.
$200 million in advertising with key media owners and publishers to insure their side would always receive the benefit of any doubts and access to unlimited space to present unchallenged rebuttals under the byline of an "objective reporter".
Leaving approximately $200 million left the operators.

Note: There is nothing illegal about elected officials participating and enjoying huge profits. Officials are only expected to disclose which business they are involved. Meaningless in this case where the public is denied access to which companies are receiving government money.

Additional pressure to do nothing. See Politically trapped

Other key wrongs protecting the scheme -

The program operates totally void of oversight and accountability.
How much, where the money goes and what if anything the state receives in return is kept hidden from both the public and state lawmakers.
Subverts the state Constitution's requirement the Legislature and Governor balance the budget within available revenue.
Money is given to unknown private entities with no strings attached.
Undermines the constitutional checks and balances provided, failing to protect the public interest.

Breaking down where over $850 million has disappeared. -

Great Plains Airline	$27 Million	Ref
Altus Ventures	$66.3 Million	Ref
Rocketplane	$18 million	Ref
OK Tax Commission Letters	$330 million	Ref
Capital West Tax Credit Letter	$300 million	Ref

So far we have touched on how public money is being quietly funneled into private hands with no strings attached, kept hidden from the pubic and leaving only a well covered trail.

Continue reading to learn more about the scheme, including ways the money is further dispersed in a way to leave no traces. And, details of actual abuse cases.

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references and backup information.

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Capital Formation Incentive Act.

Taxpayer Transparency Act

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Over View

The Scheme

The Cancer

A Sweet deal

State's losses

How this works!

Politically trapped

In summary

Common sense

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