Discussion:Another Suit goes to jail

http://www.google.com/hostednews/ap/article/ALeqM5js3UI68RxnoKgoMBEavbR2DHFjoQD9ATD58G0

Before someone says something about the Feds giving up on the millions of deductions taken by this guy or his companies, check out this sentence: "The agreement calls for any tax liabilities of Francis or his companies from 2002 to 2008 to be handled in civil or administrative arenas." In other words, the audits go on but the criminal charges on these counts have ended for now, probably because of the unreliability of the Feds' star witness, his accountant.

Next up, under the heading of 'another suit goes to jail' we have Mr. Pfaff: http://online.wsj.com/article/BT-CO-20090923-711333.html

On the ACORN front, we have http://www.nypost.com/p/news/opinion/opedcolumnists/acorn_tax_cheat_rGElUcHk82b5We97CU80KI and http://www.google.com/hostednews/ap/article/ALeqM5i81fKPWi8LvB7KzMo3g0Te60YokQD9AT7N5G1.

Failure to pay withholding taxes is the lowest of the low, to me, and Ms. Lewis, if held responsible, should join Mr. Pfaff. But I would note that I see nothing about the respectable crook lawyer in the NY Post, no photo of him doing the frog walk with a coat over his head while the head shot taken of Ms. Lewis is totally unflattering.

Joe Francis will make a good topic for MSNBC, Fox and all the other purveyors of sensation, and of course, this latest ACORN news will play Fox but I will not hold my breath waiting for them to do an analysis of Mr. Pfaff's actions, or do an analysis of the item I posted the other day about Sam Zell and the Cubs.

I actually heard Fox go after Joe Francis before. I think they just wanted to show his video.

As far as ACORN, here was another article that showed up in the NY Post:

http://www.nypost.com/p/news/local/nut_house_empire_A5WRj6MgbTHqsR3fQD31GL

Here they do good work and maybe that's what they should stick with overall. $50 million seems like a lot of money however, but hey, it's New York. Real estate is expensive up there.

As far as the piece by Alan Sloan in the WaPo you highlighted, this one part really aggravated me because it's flat out disingenuous: "Now Zell is trying to get around the problem he created when he converted Tribune from a standard C corporation to an S corporation to avoid taxes. Firms making that switch owe corporate gains taxes if within 10 years of the change they sell assets, such as the Cubs, in which they had "built-in gains."

Fine, I have no problem with the "built-in gains" issue. But he avoids mention that the S Corp passes the income and (losses) to the individual. He flat out doesn't mention this at all. He basically is stating that Zell is avoiding all taxes on the Tribune transaction. You and I both know this is patently untrue. Eventually, if the Tribune turns around and makes money, he will pay taxes. As far as his description of the transaction, it's probably a fair analysis. That I will give him.

Tom

And of course, we have no idea what Zells' 1040 looks like. Could the gain be passive to wash passive losses? Who knows.

I noted that Francis would make news because he is part of the "E" culture.

I come to ACORN with bias too, for I have seen too many hucksters and the like use programs designed to help for their personal needs. Funny my first experience with poverty programs came in 1969-70 when my boss' funeral director in Philly wanted to move from a row house to one of the grand Victorians on Germantown Avenue. These buildings needed lots of work.

He was an operator [report low income but live nicely], but he met his match when he applied for SBA financing through the one bank in Philly who would do those loans. He had to use the contractors they recommended, and eventually had to change accountants. What I can remember is the day boss and I drove to the new construction, where he poured out his tale: he asked my boss, "Nate, if your enclosing an open patio, which do you put on first, the roof or the drop-ceiling?" You can guess what happened.

If Mr. Zell, or "his" corporation, was able to pay off vendors rather than pay taxes; I think he has done a positive thing.

I suppose the "economic substance" of the loan guarantees will eventually be argued in courts for some time to come.

http://www.google.com/hostednews/ap/article/ALeqM5hOcVeDcQWBsTf-UWwOprffWkMrSwD9AR3HUO0

http://www.politico.com/news/stories/0909/26783.html

He is in a world of hurt. I do believe he is on his way out as House Ways and Means Chairman (the Committee that writes the tax code). I do believe he will stick around as a congressman. His constituents will still support him.

As far as bias, we all have them. I just thought it was disingenuous of Sloan to make that statement about S Corp taxation. If he did a little research, he would have known the truth. He was trying to portray Zell in a bad light. He did a good job.

Tom

As far as I'm concerned the real crooks are still out there, and some of them are still sitting in the executive suite (at our expense). Seven hundred BILLION dollars is a lot of money. It would buy a lot of medicine, and a lot of food, and for that matter, it could easily prevent hundreds of thousands of everyday people from losing their homes.

Instead, what we've really done is to help a small group of multi-millionaires keep THEIR homes, which is not surprising when you consider that former Treasury Sec. Henry Paulson ("Mr. Emergency") was himself multi-millionaire (along with a lot of the Congressmen who helped him get what he wanted). Oh, and I almost forgot: two multi-millionaire Presidents. One who signed the Bill into law, and one who voted for it in the Senate, I believe.

If we can apply the law of negligent homicide to an automobile wreck, I don't see why the Congress can't pass a law for criminal recklessness in the financial arena.

There will be no reform without some criminal statutes to scare these insects with, or to at least embarass them (if that is even possible).

Look at the symptoms of sociopathic behavior, and see if it's not a roadmap to becoming a CEO, movie star, sports star, political star, or religious star in America today:

not learning from experience

no sense of responsibility

inability to form meaningful relationships

inability to control impulses

lack of moral sense

chronically antisocial behavior

no change in behavior after punishment

emotional immaturity

lack of guilt

self-centeredness

These ARE the highest paid Americans! Because WE let them get away with it.

Crow, I cannot agree more about some why executives cannot receive a harsher punishment. I feel they get off too light. Losing their houses, cars and all ill-gotten gains no matter how far it goes might seem good enough. Making them scrub toilets in prison and doing serious time might be more realistic. Medium security prisons, not posh country-club type prisons are the answer at least to me.

I am at least glad to see you finally mention movie stars and athletes in your latest rant. Nothing has bothered me more in the latest round of debates that people attack CEO pay unfairly. No one bats an eyelash at an athlete being paid $100 million, but a CEO drawing $10 million, "it's off with their head." Yet, these sports stadiums are funded with your tax dollars in most areas. Almost many, if not all, of the road improvements around the stadiums are funded by your tax dollars.

Yet the millionaire, sometimes billionaire, owners of these sports teams hold the fans and cities for ransom by threatening to move if they don't get their way. Usually the politicians cave to the pressure because of the money involved.

It always comes back to money and the golden rule: He who has the gold makes the rules.

Tom

But you raise a great point about franchises.....it's been how many years now, but I still have a hard time accepting the Ravens, not the Baltimore Colts.

You mention the team just north of where I live. I can't cheer for the team I dub the Baltimore "Browns". We stole them from Cleveland, Baltimore did nothing but irritate Irsay and they claim they were robbed. But Irsay was a jerk by moving them in the middle of the night.

I still love my Redskins in spite of us losing to Detroit (yes, it's embarrassing). I'm hoping someone from the Saudi Royal family buys the Redskins from Dan Snyder. They would be better owners.

Tom