From Earmarks (D.C.) to TIFs (I.C.): America's Fascist Economy

July 15, 2014, 3:55 p.m.
TIFs -- Therrre Back!!

"The people who own the country ought to govern it."

-- John Jay; Frank Monaghan, John Jay, chapter 15, p. 323 (1935).

I like Marc Moen -- including many of his architectural and other ideas for Iowa City.

What I don't like is the City Council's infiltration of the efforts of Iowa City's entrepreneurs, start-ups, established businesses, and capitalism generally by picking and choosing which for-profit enterprises they will infuse with taxpayers' money.

Today's Press-Citizen reports that the Council's latest give-away is going to Marc Moen in the amount of $14 million!! That's a little rich even for the members of Iowa City's City Council. Mitchell Schmidt, "Committee Approves Chauncey Funding Model; Recommends That City Council Back $14.1M TIF Request, Iowa City Press-Citizen, July 15, 2014, p. A1 [Credit for photo of proposed building: Iowa City Press-Citizen.]

Here are some relevant numbers. According to the 2010 census Iowa City contains 67,862 people, 27,657 households, and 11,743 families. Divide $14 million by those numbers and you get: $206.30 per person, $506.20 per household, or $1192.20 per family. Is there the remotest possibility that if the question of making those gifts to Moen from every Iowa City resident was put to a vote that it would ever muster a majority of support?

For nearly a decade I have been writing in newspaper articles and blog essays about the problems with TIFs, providing lists of the categories of their objectionable consequences -- why these transfers are bad for taxpayers, consumers, competitors of the recipients, the general economy, neighboring communities and governments, among other reasons. One column, from this past April, may be a useful summary: "Tussling Over TIFs: Pros and Cons."

A list of 39 of those prior columns and essays can be found in "TIFs: Links to Blog Essays."

Earlier this year I wrote a tongue-in-cheek column essentially throwing in the towel, revealing my misunderstanding regarding transfers of taxpayers' money to for-profit enterprises from earmarks in Washington to TIFs in Iowa City:

"Like 'Amazing Grace,' I was blind, but now I see: We don’t have a capitalist system. We probably never did. So how should we describe our economy? The word 'fascism' carries too much baggage from World War II -- dictators, suppression of opposition, aggressive nationalism, and even racism. 'Fascism' doesn’t describe America today. But from Washington, D.C., to cities, counties and states all across America, in terms of an economy, ours is the economy of fascism."

"TIF Apology."

Whether in Washington, Des Moines, or Iowa City, our elected officials, like Italy's Benito Mussolini 70 years ago, love to intertwine government and business into a kind of fascist economic whole within which, in our time, they can give our money to for-profit businesses. Who wouldn't like to get the credit (plus campaign contributions, and the virtually guaranteed re-election they make possible) for spending other people's money?

And the citizens, taxpayers and voters go along. They may support the idea of TIFs, they may not be paying attention, they may understand and oppose them but figure it's fruitless to protest, that the deck is stacked against them. The net result is the same: the officials are re-elected, and taxpayers' money continues to flow to the relatively wealthy and for-profit businesses.

To make matters worse, Iowa City's TIF-lovers now propose to add disrespectful insult to economic injury, by raising the sales tax (disproportionately borne by the poor and working poor), and shifting most of the income from this sales tax increase to property owners in the form of reduced property taxes -- thereby softening any possible political opposition from them to the TIF giveaways.

Council members' governing principle is similar to that of John Jay (1745-1829), as expressed in the quotation with which this blog summary began: "The people who own the country ought to govern it." Delete the "ought to" from that line and it pretty well describes governing in America today, whether nation, state -- or Iowa City. And those who own Iowa City are the members of the business community and, as in John Jay's time, the property owners.

But until the Council exercises the candor to place Jay's quote over the entrance to the City Hall, openly and candidly acknowledging what they are doing, I will continue to protest the hypocrisy of the community's TIF-funded fascism.
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Obama Mason and Public Finance

March 21, 2008, 9:45 a.m.

Today's Items Relating to Subjects Followed by This Blog
Obama Campaign
Barry Massey, "Gov. Richardson Endorsing Obama," Associated Press/Washington Post, March 21, 2008, 6:37 a.m. ("New Mexico Gov. Bill Richardson, the nation's only Hispanic governor, is endorsing Sen. Barack Obama for president, calling him a "once-in-a-lifetime leader" who can unite the nation and restore America's international leadership.").

Score One for President Mason. Look, I don't know what the arguments were pro and con, it may not be the most important issue confronting the University, and I don't even know if it was actually President Sally Mason's idea or something a staffer came up with. But carving out ambulatory medical services from Carver strikes me, intuitively, as a bit of creative analytical thinking worthy of notice and positive comment. Kathryn Fiegen, "Mason: Ambulatory services at UIHC could move; Would help alleviate traffic near hospital," Iowa City Press-Citizen, March 21, 2008, p. A1.

Again, on this next story, I don't know the details, but having played a major role as an FCC commissioner in getting the anti-smoking spots on television, and as a former co-director of Iowa's Institute for Health, Behavior and Environmental Policy, I was of course interested in this morning's story about the selection of Jim Merchant's replacement as dean of the College of Public Health: Susan J. Curry from the University of Illinois. From all initial descriptions, it looks like a good choice. Diane Heldt, "Healthy Outlook; Illinois-Chicago Educator to Lead Public Health College," The Gazette, March 21, 2008, p. B1.

Public Finance: Murals, Earmarks and Giveaways

Murals. Former Iowa City City Counselor, Bob Elliott, had a little serious fun with his former colleagues in an op ed column this morning. There are all too many examples in public finance (as well as corporate and personal finance) of solutions, or opportunities, that require less money while producing greater benefits. Finding them is a wonderful intellectual challenge that can produces great financial rewards. It seems the City is offering an outfit in Arizona $65,000 to paint a mural on the wall of an indoor swimming pool. Elliot questions whether a mural is an essential element for swimming, but if it is why it wouldn't be both more desirable -- and far cheaper -- to have it done by local artists, including UI and high school students. (There is precedent in the mural done by our alternative high school students under the direction of Hani Elkadi.) Bob Elliott, "Look Locally for Rec Center Art," Iowa City Press-Citizen, March 21, 2008, p. A11.

Earmarks. Eliminating earmarks and special interest funding of our Representatives and Senators are among the top priorities of virtually all public interest reformers. Having replaced Congressman Jim Leach with former Cornell College professor Dave Loebsack, we now have a representative who votes with the Congressional Democrats -- but who also takes PAC and lobbyist money, and in this morning's Press-Citizen is defending earmarks. Pamela Brogan, "Loebsack defends earmarks; Says they should go to education, public safety," Iowa City Press-Citizen, March 21, 2008, p. A3.

What's wrong with earmarks? "Let me count the ways."

They are unfunded. They enable office holders, at no cost to themselves, to appear to be servicing their district or state by funding special projects, that we're paying for by borrowing from the Chinese today and leaving to our great-grandchildren to pay back tomorrow.

They are not properly vetted. There's a reason Congress creates administrative agencies. Gathering data and doing analysis takes time and expertise Congress doesn't have. To let individual officials envision and create earmarks in the dead of night under a rock is not a very rational approach to comparative project evaluation. Senator Grassley's $50 million for an ill-considered indoor rain forest is one example right here at home. The "bridge to nowhere" in Alaska is another.

They are open to the most rampant corruption and paybacks to campaign contributors.

If Congress is to engage in such project-by-project authorization it should be done through the regular process of bills, sub-committee and committee staff consideration, hearings, reports, ultimate floor debate, passage in both houses, and presidential approval.

But Congress shouldn't be mired in such petty details regardless of the process. Most of these earmarks involve relatively minor (in a three-trillion-dollar budget) items more appropriate for consideration by state legislatures, county boards of supervisors, city councils, local businesses and philanthropists. To the extent they do involve local illustrations of what are, in fact, nationwide needs they should become a part of national programs.

It's not necessary to play the earmarks game "because 'everybody's doing it.'" Everybody's not doing it. There are members of the Senate and House who don't play the game; members who are leading the charge against earmarks. Congressman Loebsack simply chooses not to be among them.

Giveaways. Meanwhile, the state giveaways continue unabated -- $155 million-plus to the likes of Hamlet Protein of Denmark, Hormel, and John Deere. Nor is this all for businesses new to Iowa, or new construction. "Federal Mogul" (now there's a name) would like to buy some equipment to make a new Champion spark plug at its "existing spark plug plant in Burlington"! In addition to the direct cash outlays from grateful Iowa taxpayers to the bottom line of these for-profit corporations (from such funds as the "Community Economic Betterment Account" and "High Quality Jobs Creation Program") there are always the hidden benefits the legislature refuses to reveal to the media and public in detail involving taxes the firms are told they won't have to pay, or the costs of infrastructure support they would otherwise have to pay for themselves that is picked up by the taxpayers. David DeWitte, "Wind-Power Factory to Open in Oelwein," The Gazette, March 21, 2008, p. B8; Associated Press, "State Gives $155M to Business Projects," Iowa City Press-Citizen, March 21, 2008, p. A9.

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Earthpark: Day Late, Dollar Short

January 12, 2008, 5:45 a.m.

Earthpark, U.S. DOE Reveal Little Financial Support;
$32.9 of $48.3 Match Was a Pledge From Founder Townsend
Gregg Hennigan, "Documents Show Townsend Came Up With Indoor Rain Forest Money," GazetteOnline.com, January 12, 2008, 12:11 a.m.; Gregg Hennigan, "Founder Pledged Millions for Grant; Bulk of Money Needed to Match $50 Million Came From Townsend," The Gazette, January 12, 2008, p. A1.

As yet one more example of the human penchant for secrecy, the full collection of documents filed by Earthpark with the Chicago Office of the U.S. Department of Energy -- although "public records" all -- has never been made available online (so far as I know) by either Earthpark or the DOE. I was unable to find a link to them from the GazetteOnline page.

However, Brad Franzwa, a concerned citizen to whom we all owe a vote of thanks, has made them available to me, and I have made them available to you here. Be forewarned that this is a 10 MB pdf file, so it may take awhile to download, depending on your connection speed and network traffic.

(Don't you, too, find it a little disgraceful that individual American citizens -- and newspapers such as The Gazette -- need to threaten suit against their government (and the wealthy) to get them to comply with laws they should obey as a matter of course? Whatever the current crop of presidential candidates may mean by their new-found affection for "change," greater governmental openness would hopefully be a part of their definition.)

The full citation for the collection is "Application for Continuation of Existing Grant DE-FG02-04CH11230, Submitted to The United States Department of Energy by Earthpark: A National Center for Science Literacy and the Environment," November 30, 2007, 176 pp.

For a full (perhaps too full :>) !) history and commentary about this project see my "Iowa Child/Environmental Project/Earthpark" Web site -- as well as even more recent blog entries here.

There will be more commentary later.

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Earthpark: Grassley's the Story

December 7, 2007, 10:00 a.m., 11:00 a.m.

[This is a continuation of Nicholas Johnson, "Earthpark's Week-Long Wake," November 26-December 7, 2007. Like the "Holy Roman Empire" that was neither holy, nor Roman, nor an empire, "Earthpark's Week-Long Wake" proved out to be neither week-long nor a wake. It did end up creating a blog entry that now prints out at about 38 pages. All of that content is hereby "incorporated by reference" and remains as relevant as ever.

NOTE: Because I may very well be out of Internet reach during the next four or five days, if anything breaks and you don't see it here, that's why. Check State29 and read between the lines in everything in (or left out of) your local papers.]

Johnson Forms "Exploratory Committee" to Challenge Earthpark's Grassley
I have been asked on more than one occasion in the past to run against Senator Chuck Grassley. I've always rejected the invitations. Not only do I not dislike Senator Grassley, I actually admire the attention he gives to constituent services -- it is of a quantity and quality among the best of any elected official in Washington. Moreover, I've always taken some responsibility for putting him in office, having lost (by my count by six votes) the Democratic primary for Congress in 1974 that led to a general election of then-legislator Grassley to the U.S. House of Representatives that year. Besides, as Art Small and others have discovered, running against Grassley is more of a sacrificial service to the Democratic Party than a realistic opportunity to gain a U.S. Senate seat.

But I have to say, with the way the Earthpark $50 million earmark is going, I'm seriously re-thinking my past reluctance. And this morning's (or was it yesterday's) Des Moines Register story about Grassley's current position on Earthpark was enough to prompt a serious discussion with my wife over breakfast this morning about my undertaking a statewide race against Grassley.

That's how strongly I feel about this.

Grassley is the Earthpark Story
What would you think on reading the following headline:

Tony Leys, "Grassley: No more extensions for Earthpark project," Des Moines Register, December 6, 2007. (And see, State29, "Grassley Finally Comments On Earthpark," December 6, 2007.)

"No more extensions" is Washington-speak for "more extensions." And that's exactly what seems to be going on.

Oman's document proving (he says) he's "matched" the $50 million of taxpayers' money Grassley's offered to give him if he can match it, is a public document. Many members of the media and public would like to see that document -- and are entitled to as a matter of law. Oman refuses to release it. Senator Grassley, who knows what's in it, refuses to tell. The Department of Energy has been asked to put it up on the Web, or at least respond to the formal Freedom of Information Act requests now pending at the DOE. It has yet to respond. Why all this secrecy about something that is, by law, a public document?

If we can't see what Oman filed on November 30, how can we ever know what revisions he was permitted to make in the document thereafter?

If the DOE said last week they'd have an answer in "a couple of days" how can this continued delay, on top of the secrecy, be considered anything other than an "extension"?

Moreover, it's an ancient trick of government agencies and other institutions to save major announcements that might reflect adversely upon them for the evening before major holidays, when they know there will be few journalists around to cover the story. I first wrote about this in the Saturday Review in 1972, Nicholas Johnson, "Why Ma Bell Still Believes in Santa." Is that what we have in store?

Leys writes:

"Grassley said he had been told what was in the financial documents, but he declined to predict whether the project’s application would pass muster. He said he would not lobby the administrators.

“I’m writing the law, they’re administering it, and I’ve got to be careful not to contact the department while they’re making their decision,” he said. “I don’t think I ought to be seen to be trying to influence it one way or the other.”

Let's put aside for the moment the difficulty of having "been told what was in the financial documents" while being "careful not to contact the department."

What are we talking about here?

For starters, the initial $50 million was provided in one of those secret, undebated, "earmarks." The beneficiaries were Republican leaders, friends and campaign contributors of Grassley, who paid a former Grassley staffer handsomely (and successfully, as it turned out) to lobby the Senator for the $50 million. From the beginning, the grant was viewed by some fellow Republicans, journalists, stand-up comics, editorial and TV writers as laughable. The project has been offered to, and rejected, by a half-dozen or more Iowa cities -- some more than once -- and for very good reasons.

But let's put even all of that aside.

There was never a time at which a strong case could be made for the wisdom of using $50 million of taxpayers' money for this purpose. But my point, for now, is that whatever case one could try to make at the time of the initial award -- the time at which the case was strongest (weak, but its strongest) -- has continued to erode over time until today, when it has completely evaporated.

Even if you want to excuse Grassley for making the money available in the first place (and I'm not inclined to do so), there is absolutely no excuse whatsoever for his failure to step in to prevent its being made available now -- match or no match.

It is by now obvious to all who will but look that "the emperor has no clothes." Such conditions as might have ever existed, when more was not known, no longer exist. There is not a prayer that this project will be built to the standards that would be necessary for it to even have a chance of programmatic and financial success -- or, even if it were, that it would create a sufficient cash flow to continue operations without ongoing taxpayer subsidy.

Consider the analogy to Iran.

If it is true that Iran has an active program underway to manufacture and imminently launch an atomic bomb our way (or Israel's), a presidential proposal that we launch a pre-emptive strike, start a war, and bomb their manufacturing facilities can still be questioned, but it will be considered in light of his rationale premised on that intelligence.

Once the NIE reports that Iran is not now, and has not been, engaged in such activities for the last four or five years, however, it is no longer possible for the president to continue -- at least not rationally or responsibly -- to advocate that course of action.

Give Grassley the benefit of the doubt, that he wasn't just doing a $50 million favor for friends, that he actually thought the project had merit for Iowa, and a probability of raising the additional $250 million (initially proposed) that economists thought necessary to a successful venture.

The point is, now he should know better -- as all do who have been paying attention. He cannot be permitted to pass this off onto the DOE, anymore than Bush could pass a post-NIE strike against Iran off onto the DOD.

To have awarded the $50 million in the first place may have been bad judgment and abuse of the earmark process.

To permit it to be given now, knowing what we do, knowing that it will be, if not entirely $50 million wasted at least never produce what was initially proposed, is not only shameful, it should be considered criminal.

Not up to speed on what we now know? Take a look at Nicholas Johnson, "Earthpark's Week-Long Wake," November 26-December 7, 2007, and my Earthpark Web site.

What Leys has succeeded in extracting from Senator Grassley -- that he refuses to step in and guarantee the taxpayers will be saved this criminal expenditure, for which he is solely responsible -- is a beginning. And the Register is to be praised for getting us this much. But it is far from the end of this story.

For my suggested questions for Grassley that still need to be pursued see, in Nicholas Johnson, "Earthpark's Week-Long Wake," November 26-December 7, 2007, the discussion and questions following the sub-heading, "[Nov. 30] Senator Chuck Grassley Has Explaining to Do," about half-way down, following the Sharpnack editorial cartoon.

Don't let him "sidestep" this one.



Come on, Iowa media! Let's get going on this major national -- not to mention statewide -- story. Get us the Earthpark public document that has been sitting at the DOE for a week now. Ask Grassley how he can justify not stepping in to stop this criminal waste of taxpayers' dollars. Save me from having to go around to Iowa's 99 counties at my own expense running a fruitless campaign against our Senator as a way of getting this story to the Iowa voters. Please.

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The one-minute fair use clip, above, is from the delightful 1982 R-rated full-length musical comedy, "Best Little Whorehouse in Texas," staring Burt Reynolds and Dolly Parton, among a great many other accomplished and well-known actors, and still available for rental and sale. It's based on a true story of a brothel outside LaGrange, Texas, that was ultimately closed down in 1973, following the work of investigative reporter Marvin Zindler of KTRK-TV, Houston. The writing was done by Larry King (whom I remember from Austin in the 1950s), the Governor was played by Charles Durning, and the studio was RKO Pictures. The film is copyright by, presumably, RKO. The use of this very brief clip is for non-commercial, educational and commentary fair use purposes only. Any other use may require the permission of the copyright owner.

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Hold Onto Your Wallet -- Earthpark Defies Death

September 27, 2007, 9:30 a.m.

Earthpark Does a Terry Shiavo
Earthpark may be dead, but it's not yet buried under a tulip bed in Pella. There's a family member and at least one U.S. Senator who swear they saw it smile. Perry Beeman, "Georgia Company to Aid Earthpark," Des Moines Register, September 27, 2007.

I have been publishing newspaper columns (14) and other written analyses (15) of this ill-conceived, misrepresented, mismanaged, failed earmarked $50 million pork project since January 2001. Since February 2004 I have been maintaining what I believe to be the single most thorough Web site of commentary on the developments (probably well in excess of 100 pages if printed out), with links to the full text of dozens (if not hundreds) of newspaper stories, studies and reports. See, Nicholas Johnson, "Earthpark/Iowa Environmental Project/I.O.W.A. Child Project."

State29, whose very slug explains that he is "Keeping Track Of All Those Iowa Scandals While Remaining Insightfully Vulgar" (so don't say I didn't warn you parents that his commentaries usually have an "R" rating at best) has been tracking what he calls "Earthpork" as long or longer than I have. There's nothing I need add at this time to the investigative journalism he has done on this latest story -- far and away, above and beyond, anything the mainstream media has even attempted, let alone accomplished:

State29, "Perry Beeman Bends Over and Lubes Up for Rain Forest Chief David Oman," September 27, 2007.

State29, "Maxon Holdings vs. UBG Financial," September 26, 2007.

State29, "$10 Million in 'Services' for Earthpork," September 26, 2007.

A Register reader provided this comment to Beeman's story early this morning:

First, Maxon is giving "in-lind" support which means this may not count towards the $50 million goal. Nice job in talking ANYONE into donating even time, but that's not what the intent of the matching FUND meant.

Second, I read that Maxon is a shell company owned by Ted Townsend...one of the Earthpark supporters. Why doesn't Oman start a company and donate $50 million of "in-kind" support, too? HA!

Third, Ebay didn't "partner in a nation project based in Iowa"...it is simply a fund raising arm of Ebay that nearly anyone can participate in. My fantasy league commissioner also links to Ebay and gets a dollar to help pay for website costs when the owners click a link to buy something on Amazon - same thing in essence.

Fourth, I'm tired of hearing that 1 million people might attend each year. Those are the numbers in England. But England has a few other lures besides a dome and a slightly larger population base then Pella has. Oh, yeah, and Europe is just a chunnel away. So unless Earthpark people think that folks will visit because Missouri is nearby, welll...

DollarsAndSense, September 27, 2007, 5:16 a.m.

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