Posts Tagged wealth

Cuyahoga County Shadow Government Decides for Us

March 23, 2010… Why should the Greater Cleveland Partnership (GCP) – a cabal of corporate Cleveland – be allowed a non-profit, tax-exempt status when it is merely another corrupter of Cleveland and Cuyahoga County governments? Why should taxpayers pick up the cost for these obnoxious corporate lobbyists?

GCP is an obvious business-dominated front group that poses as a charitable, do-good organization. GCP is allowed to use tax-free dollars to lobby for the interests of Corporate Cleveland. It has the blessing of the Internal Revenue Service. Too bad.

This is not a charity. It is a corporate lobbying business. It is a detriment to the good health of the community.

Why? Because it sets priorities that favor corporate interests while playing the role of a community benefactor.

In its document claims to the IRS, GCP says in part, “The Greater Cleveland Partnership is positioned to speak with ‘one voice’ on behalf of its 17,000 members to promote the private sector’s priorities locally, and in Columbus and Washington D. C… The GCP successfully focused the business community’s resources on advancing governmental policies and actions that are favorable to economic development and long-term economic vitality…” It also takes credit for “expediting work on the Opportunity Corridor.”

This again is not a charity. It is a lobby dedicated to shifting the tax cost of government from wealth to the non-wealthy. It is anti-community. It’s a Republican outfit.

GCP also is given a privileged position by the news media. The media, particularly The Plain Dealer, portrays it as a non-partisan, do-good institution. It’s doing good alright. For its corporate friends. But not for you.

Have you ever read a critical word about GCP in the Plain Dealer? The gods forbid it. It receives favorable, though biased, coverage. Never has been different. Never will be.

What is really upsetting is that your and my tax dollars have been aiding GCP – not only by tax-free “charity” claims – but directly. You contribute directly to GCP’s corporate efforts. You didn’t know?

The City of Cleveland and Cuyahoga County, for example, in three years gave GCP nearly a quarter million tax dollars. Your money.

Cuyahoga County tells me that it gave $40,000 in 2008 and 2009 and will give $40,000 again this year. A tax give-away.

The City of Cleveland tells me that it gave $40,000 in 2008 and 2009 and will give another $40,000 this year. A tax give-away.

That’s $240,000 of tax money to a corporate club that engineers public agenda for self interests.

I suspect that there are other local governments that also contribute to GCP and its efforts to dominate the public agenda.

These tributes to our corporate Caesars have been going on much longer than three years.

So we are enriching those who help make the laws that take from the ordinary citizens and leave businesses alone. What a deal.

GCP represents a more corruptive influence than any two-bit politician getting his or her house enhanced in exchange for favors. The public rightly gets upset with political corruption but the GCP kind of corrupting of public officials and public activity goes without even criticism. Indeed, in the media it gets praise!

This is acceptable public corruption.

GCP – usually in conjunction with foundations – sets the agenda for our public sector. It drives what happens in Cleveland and Cuyahoga County. Certainly more than any politician or political party. Not a good situation.

But you see no attention from any news outlet. Off limits. Sacrosanct. No criticism allowed.

The GCP even puts together the list for capital projects that goes to the state for funding? And you thought you elected mayors and council members to do that? You should expect that these public dollars go to subsidize what corporate leaders want. See Opportunity Corridor, which is really a costly in-opportunity that doesn’t meet the greater needs of people to move around. Hundreds of millions of dollars for an unnecessary road at the same time transit-dependent people are ignored and overcharged. GCP leads the way with Opportunity Corridor.

GCP pushed the medical mart/convention center that will cost Cuyahoga County taxpayers $1 billion before it’s over.

They provide seed money for almost everything that shifts costs to ordinary taxpayers and away from corporations.

GCP no longer has to tell the IRS or the public where it gets its money. It once had to list donors. You don’t see the Plain Dealer crying for transparency here. Even though these business leaders set more expensive priorities than the politicians.

To give you an idea of how much money flows into this corporate puppet I have to go back to 1990 and a listing I compiled for my newsletter, Point of View. It is information now hidden by GCP.

Here is what GCP’s predecessor – Cleveland Tomorrow – listed as its donors. I called CT and GCP – Cleveland’s Shadow Government.

The Cleveland Tomorrow IRS report listed the following “contributions” – they were the first payments of three for some of these contributors:

Ameritrust (gone) – $501,000.

Bearings, Inc. – $167,000.

BP America (gone) – $2,338,000.

Calfee-Halter – $83,500.

Cleveland-Cliffs -$167,000.

Cleveland Foundation – $167,000.

Eaton Corp. Trust Fund – $2,000,000.

Figgie International (gone) $334,000.

First Bank Corp. – $250,000.

Forest City Enterprises – $334,000.

David Jacobs – $83,500.

Dick Jacobs – $83,000.

Jones, Day – $250,000.

Lubrizol – $334,000.

National City Bank (gone) – $501,000.

Nestles (owned Stouffer’s) – $1,002,000.

Ohio Bell Telephone – $1,000,000.

Parker-Hannifin – $666,000.

Society Corp. (now Key Bank) -$501,000.

Squire-Sanders – $83,500.

Standard Products – $107,000.

TRW, Inc. (gone) – $1,000,000.

Of course, you may remember that about this time the establishment here was gearing up to build a stadium and arena – at mostly your cost, of course. Of course.

Indeed, Cleveland Tomorrow helped buy the land upon which Progressive Field and Quicken Arena now sit. The land cost more than $20 million and was added to the cost of Gateway.

Even the Cleveland Press and the PD were listed in older documents as tithing with contributions to these outfits. The PD is likely still contributing financial, as well as propaganda-wise.

GCP has a budget of some $8 or $9 million a year.

Its payroll has some hefty salaries that make its employees much better paid than ordinary citizens.

GCP boss Joe Roman earns a salary of $353,880 plus a bonus of $28,169, plus deferred compensation of $57,143, plus non-taxable benefits of $12,049 for a total of $451,241 (All these figures are 2008, the latest available).

I’ll just give the totals for the following GCP executives:

Yvette Ittu – $216,233.

John Luteran – $214,653.

Deb Janik – $190,457.

Daniel Berry – $186,633 & $79,986 from a related organization.

Carol Caruso -$222,066.

Stephen Millard – $30,322 & $272,899 from a related organization.

Paul Federico – $183,629.

Claire Walker – $80,612 & $80,612 from a related organization.

Nice pay if you can get it. Few can.

Squire, Sanders & Dempsey, of course, does well with professional services in 2008 of $197,795. Squire-Sanders, needless to say, has been a major corrupter of government, particularly the city of Cleveland, from its activities in trying to kill Muny Light to its work at Gateway, the Browns Stadium and the Medical Mart, all major Cleveland Tomorrow and Greater Cleveland Partnership – really one and the same – efforts with taxpayer dollars.

So GCP is our Shadow Government. We don’t vote for them. But they make more important decisions than any elected officer. And they do it without public scrutiny. Indeed, with the cooperation of your daily newspaper.

It’s a hell of a way to run our public sector.

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Billionaire Lerners Make Forbes Richest in World

March 11, 2010… You may have noticed in The Plain Dealer this morning that the City of Cleveland will refinance $65 million in bonds for Browns Stadium. You also likely noticed that the interest rate will be going up. Taxpayers get ready.

Because of the poor fiscal state of the city, Moody’s rating service lowered the rating it gives the city. That means that the city will be paying more interest on all its borrowings. It has borrowed heavily to build the Browns Stadium for its nine or ten games a year. But worry not; Randy Lerner will not have to pay a penny more. Cleveland and Cuyahoga County taxpayers, via the sin tax, will pay.

You may not have noticed that Forbes magazine ranked the people richest in the world. Listed down the line were three recognizable names – all Lerners, all worth $1 billion. That includes Randy, owner of the Browns.

Randy Lerner won’t be paying any of the interest on the $65 million in bonds. The taxpayers of Cleveland will pay that. A gift to the Lerner family. They surely need it in these tough times.

I’ve told readers previously (and wish the Plain Dealer might be a bit aggressive here) what a great deal Randy Lerner gets from the Cleveland taxpayers. He gets contributions too from the city’s school children. That’s because the stadium, which he rents for $250,000 a year – a rate that never goes up in his 30 year lease – is tax exempt forever.

The city – to rent to Lerner for $250,000 a year – does has to pay taxes on the stadium land, however. The taxes annually are more than $400,000 a year. That’s on a market value (2009 figure) of more than $15 million.

A $15 million plot of land and a $300 million plus stadium for the Lerner family. How can you go wrong?

Billionaire Lerner and the Browns do not pay a penny in property taxes. About 60 percent of property taxes would go to the Cleveland schools. But who cares about them.

Listed on the Forbes richest people are Randy, Nancy and Norma, Randy’s mom.

The city, as of last May when I checked, faced financing costs on the Browns Stadium of $160,000,000 more. The city had already paid $102,823,948, according to the city’s finance department figures.

The taxpayers of Cuyahoga County, via the sin taxes, have contributed as of February $63,088,767.

Randy gets help from everywhere in northeast Ohio.

So you see it’s kinda tough to serve some of these billionaires.

I was going to link to a previous article but instead I’m going to attach it right to the end of this. I wish for once the Plain Dealer will tell the story of how much the Browns have cost us and the city of Cleveland, and its school children. Please, Plain Dealer.

Here it is from May 29, 2009:

HOW GOOD IT GETS FOR THE LERNER FAMILY

By Roldo Bartimole

Isn’t America great! If you’re rich, that is. Ask the Randy Lerner family. Happy billionaires. Our welfare burden.

Here’s a case where Cleveland people subsidize one of its wealthiest families. The reverse philanthropy has gone over the $100 million so far. And yet, so long a way to go.

I asked the City of Cleveland for an accounting of how much the city has paid to bondholders for the Browns Stadium since 1997. The total came to $102,823,948.58, according to the Finance Dept. documents.

The city faces financing costs of another $160,367,109.48 in bond payments to be made until November 15, 2027, according to a refinancing done in 2007.

The Browns Stadium – a property tax free facility – is used almost exclusively used by the team owner. That means Randy Lerner and his family. Randy – worth a billion and a half dollars – is the son of Al Lerner. Al ironically was the principal person who helped Art Modell move the team to Baltimore. Not only will the stadium never pay property taxes but the lakefront land was donated free by the city.

Randy Lerner also owns an English football team from Birmingham. He paid some $100 million pounds for the team. He’s got the team name, Aston Villa, tattooed on his right angle, it has been reported.

Really endearing.

This exclusive stadium use by the billionaire Lerner family means there are maybe 10 games a year. Ten days a year when Cleveland likely makes a little money from visitors who make purchases.

Now who would make that kind of investment except our sports-minded public officials with the help of our civic leaders? You would have to be a sucker. Oh….

This represents a puny return on a huge city investment. The city says that the cost to construct the stadium was $287 million. However, many believe that the cost was well more than $300 million. There was a strong belief that Mayor Michael White used city resources to cover extra costs. White had said at the time something to the effect “Let me drive this sucker.” He drove it.

He didn’t pay for it however. Now we pay.

The taxes to pay this money come from, of course, the “sin” tax, which was extended for 10 extra years, and Cleveland taxes – an 8 percent parking tax, a 2 percent increase in admission tax for all events in the city; and a $2 fee on motor vehicle rentals. Passed by City Council in 1996.

The Lerner family pays $250,000 in rent for its near exclusive use of the Stadium. The minimum rent doesn’t ever increase over the 30 year lease. Thanks Fred Nance. The city has the right to use the stadium less than 10 times a year but hasn’t much taken advantage of this economic opportunity.

By the way, the latest financing was counseled by Squire, Sanders & Dempsey. Would you expect anyone else? Yes, the game is rigged.

Browns Stadium, of course, has no naming rights. Just as well. However, that means NO income for the city.

However, Al Lerner did a dance around that issue. He put up two huge electronic signs that freely used the MBNA signal. MBNA, his credit card company, was the base of the Lerner family fortune. The large electronic signs face east and west as Shoreway drivers see every day. Free publicity.

This is the way the bond document describes the original funding for construction of the stadium: “Funding for the construction of the Stadium was provided by the City, the NFL and the Browns, the State of Ohio and by in-kind contributions of the City Department of Utilities as well as the Northeast Ohio Regional Sewer District and the RTA. The City’s contribution totaled approximately $190 million (not counting interest) generated by City cash contributions together with public issuance of various obligations paid by the City and County contribution. Approximately $10 million of the above total was originally lent by the Cleveland Development Partnership and subsequently refinanced in 2004 by the City. The NFL and Browns contributed nearly $64 million to the initial construction and the State of Ohio contributed nearly $37 million.

The city alone pays the debt incurred for the Stadium.

It doesn’t stop there.

The city is also required to feed the capital repair fund for major repairs to the Stadium. The payment schedule is as follows: From 2008 to 2020, the city deposits $850,000 annually; in 2021, $5.9 million; 2022, $6.3 million; in 2023, $6.7 million; in 2024, $7.1 million and finally in 2025, $7.5 million.

Do we think the city will be able to keep this burden?

That’s another $44.55 million cost that the city has to pay.

The city ran into a little trouble when the interest rate recently jumped to 12 per cent. A number of cities, including Cleveland, had been in the auction rate bond market. Bloomberg.com reported that the “auction rate market is now backfiring on hundreds of borrowers as fallout from the collapse of the subprime mortgage market threatens credit ratings of the world’s largest bond insurers, deterring investors from even the safest bets.” It named Cleveland among those cities using these tax exempt bonds for stadiums.

A city representative said that the interest rate rose to 12 percent for Cleveland. However, that lasted, she said, only about two weeks as the city refinanced its debt.

Of course, the city doesn’t share in the revenue from tickets sold, usually 72,000 attendance, the 8,000 club seats or the loge revenue, food concessions, parking or advertising in the stadium. All that revenue goes to the needy Lerners.

You might notice that the Browns get a lot of media attention.

However, you never see Jim Donovan jumping up and down reporting about the financial aspect of the Browns, or the Cavs, or the Indians. No spastic reporting that might do us some civic good.

The Plain Dealer seems to be able to devote lots of space to our sports teams. Front page? We’ll give you it all. But neither the news section nor the business section ever seems to touch upon the financial aspects of the teams. When it comes to the financial burden on citizens, especially for an impoverished city as Cleveland, there’s a news blackout. Silence.

It’s out of bounds. Foul ball. Yes, foul. But in another way.

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