July 2, 2010
Evidence suggests BOK Financial, BOKF: engaged in illegal tax credit and evasion activities. (cont)
4. Tax credit programs operated in secrecy, to prevent discovery
All Oklahoma tax credit programs, are operated in secrecy. Tax credits are, by nature, off the books. This program is Oklahoma Statute 68 § 2357.7(G) - Credit Against Tax for Investments in Qualified Venture Capital Companies - Pass-Through Entities; commonly referred to a "Venture Capital" tax credits.
Through a series of maneuvers, oversight of this program was outsourced to a private individual, who owns one of only two companies allowed to use this program.
4.1 First, a quasi-state agency
A quasi-state agency, Oklahoma Capital Investment Board, OCIB(G), was setup as a public trust and funded in an off balance sheet fashion. This allowed OCIB to operate essentially as an independent entity outside the norms of state government.
4.2 Second, OCIB was assigned sole authority
OCIB(G) was assigned sole authority(J) to certify entities and investments, as eligible for "Venture Capital" tax credits.
4.3 Third, Heard the president outsources OCIB to self
Robert G. Heard, president of OCIB, arranged to privatize(J) OCIB, and outsourced management oversight of OCIB to a private company, Heard owned and managed; Institutional Equity Associates, LLC ("IEA") also known as "Edge." The contract(J) specifically stated Heard would have principal responsibility for the services performed by Edge, which meant OCIB. Heard remained on the OCIB board and would rotate the figure head title of president to various employees. Heard still ran the show as specified in the contract, having authority to authorize tax credits, but free of rules, regulations, restrictions, and reporting requirements imposed on state employees. This also freed Heard of State Ethics requirements that state officials disclose all business interest.
4.4 Heard authorizes himself $3.4 million(L) and BOK $91 million in tax credits.
While Robert Heard, a private individual, was secretly certifying BOK's $455 million in standard interest bearing secured loans, as qualified as venture capital investments; handing BOK $91 million in unearned public funds; Heard authorized himself $3.4 million in tax credits(L) through his own company Cimarron Business Capital, which went directly to Heard.
Operating with full discretionary authority to authorize unlimited tax credits, with state officials ensuring all information be held in strict confidence has prevented the public from seeing what has been occurring.
4.5 Officials ignoring.
It is noteworthy to understand authorities have steadfastly remained opposed to investigating or even examining this information held in confidence. State officials also ignored a State Auditor and Inspector's(K) report questioning the handling of this program; and a Multicounty Grand Jury report(F) describing the Oklahoma Tax Commission as having "serious deficiencies and at times blatant disregard for state statutes, regulations, and policies."
(1) As used, here BOK collectively refers to BOK Financial Corp, subsidiaries and affiliates; most notably, a banking subsidiary BOK Oklahoma; and BOK Oklahoma subsidiaries' Cottonwood Valley Ventures and CVV Partnership.
(2) As used, here Cimarron refers to Cimarron Business Capital Company.
(F) Federal Reserve Board filings; for 2006 thru 2009
(G) The fact that fraud is occurring under different but similar programs has attributed to considerable confusion. This particular case involves the following, commonly referred to as "Venture Capital" tax credits: Oklahoma Statute 68 § 2357.7 - Credit Against Tax for Investments in Qualified Venture Capital Companies - Pass-Through Entities;
(J) Oklahoma Capital Investment Board Management Agreement.
(K) Oklahoma Capital Investment Board Audit.
(L) Cimarron Business Capital Company
Source of evidence 2001 - 2005
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