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For Hartford, bankruptcy not an easy way out – The CT Mirror

Posted on June 9, 2017 by Danzig

Carol M. Highsmith / Library of Congress

The Hartford skyline

At a May 22 town hall meeting on Hartfords dire budget situation, a resident urged Mayor Luke Bronin not to file for bankruptcy, saying it would be a death knell for the city.

Would it?

Almost since taking office at the beginning of last year, Bronin has proclaimed from the metaphorical rooftops that the capital city doesnt have the resources to meet its increasing financial obligations and is at risk of insolvency.

The city patched the last hole in the current budget with short-term borrowing and faces a projected $65 million gap in next years budget, with no new sources of revenue. Withoutadditional help $40 million more from the state and union concessions that mostly have yet to materialize Bronin has said he will not rule out filing for bankruptcy.

A Hartford bankruptcy is almost incomprehensible to those who remember the citys thriving downtown and humming factories in the post-World War II years. But the reality is that after decades of slow decline, marked by middle-class flight, rising costs and loss of its once-imposing manufacturing base, the city is tapped out.

Most agree that a bankruptcy filing by the states capital city would be a major embarrassment for the city and the state. That might not be the worst of it.

The prospect of bankruptcy is frightening enough that most distressed cities try mightily to avoid it.

Since Congress created what is now Chapter 9 of the U.S. Bankruptcy Code in 1937 to allow political subdivisions of states (but not states themselves) to file for bankruptcy protection, relatively few have done so.

There have been only 673 filings under Chapter 9, fewer than nine a year, and most of those were special districts school, utility or sewer districts not cities or towns, said James Spiotto, a Chicago lawyer and bankruptcy specialist, and co-author of Municipalities in Distress: How States and Investors Deal with Local Government Financial Emergencies.

Keith M. Phaneuf / CTMirror.org

Hartford Mayor Luke Bronin and Corporation Counsel Howard Rifkin

Since 1980 only 54 counties, cities or towns have filed for Chapter 9 protection, and more than a third of those filings were withdrawn or dismissed. Nonetheless, some highly publicized municipal bankruptcy proceedings have gone forward in the past decade, the best known of which include Detroit; Vallejo, Stockton and San Bernardino, Cal.; Jefferson County, Ala.; and in New England, Central Falls, R.I.

These communities were out of options. The trend in Connecticut and across the country has been for states to intervene and help distressed communities right themselves (a couple of states, Georgia, for one, dont allow their towns to file for Chapter 9 protection).

State intervention is almost always a better option, said Spiotto in a telephone interview. Here are some reasons why:

If a city is willing to endure this array of unpleasantries, it can have its debts reduced to a sustainable level and get a new start.Vallejo slogged through bankruptcy with severe cuts in public safety and reductions in home values, among other challenges. But in the end, Acting City Manager Phil Batchelor told an NPR interview in 2012 that the experience has been good. We were able to save probably in excess of $30 million, but we had legal bills of over $12 million.

Detroit, whose $18 billion municipal bankruptcy in 2013 was the largest in U.S. history, has seen new investment in downtown and some neighborhoods some are calling it a comeback city though other neighborhoods are still abandoned and forlorn. The Motor City is recovering, but not recovered, said Spiotto.

University of Connecticut

A rendering of the UConn Hartford campus nearing completion downtown. The new campus will add vitality downtown, but it also will be exempt from city property taxes.

Central Falls, in the final year of its five-year recovery plan, has stabilized its finances, gotten its credit rating upgraded and begun a number of economic development initiatives, said Wilder Arboleda, the citys business outreach and public relations coordinator.

So although bankruptcy isnt quite a death knell, the more common response to a city in distress is fiscal and technical assistance from the state, along with a period of state oversight.Some states, such as Pennsylvania and North Carolina, have boards that regularly monitor the finances of their cities, to be able to intervene before troubles reach the crisis stage.

Gov. Dannel Malloy has proposed such an oversight board for Connecticut, which legislators are still considering.Such a board probably would have intervened in Hartford sooner than 2017; the city has been struggling for several years, selling assets and repackaging debt to balance its budget.

To date, Connecticut has responded ad hoc and usually late in the game when one of its municipalities has foundered on fiscal shoals. In the last three decades, the state has stepped in to oversee the finances of Bridgeport, Waterbury, West Haven and Jewett City, a borough of Griswold.

Bridgeport actually filed for bankruptcy in 1991, but its petition was rejected when the city could not prove it was insolvent, one of several requirements for bankruptcy approval.

State officials opposed Bridgeports petition, not wanting to see the states largest city go bankrupt, then offered help buying a park and a zoo to get the city through the crisis. In 1994 the General Assembly passed a law requiring the governors written approval before a municipality can file for bankruptcy. Gov. Malloy has said he hopes Hartford can avoid bankruptcy.

At this point it looks like there will be another ad hoc intervention. The legislature is working on a solution for Hartford, looking at a myriad of options, said House Democratic majority leader Matthew Ritter. All would include strings, some level of state oversight.

But its not clear that this approach will solve the real problem.

Bankruptcy or state receivership is the symptom of a larger problem that being whatever it was that caused the insolvency. Cities get into fiscal jams for a variety of reasons: mismanagement, a spectacularly poor infrastructure investment, loss of a major employer, unsustainable union contracts, corruption or a slowly declining tax base.

Bankruptcy can buy time, lower debt and protect the city from lawsuits, but it doesnt solve the underlying problem. Just because you go into Chapter 9 doesnt mean you have more revenue, said Spiotto.

Ideally, bankruptcy or receivership will result in a long-term fiscal plan that will align spending with revenues, and a plan to address the problem that put the city in the hole.

Hartford has awarded generous union contracts in the past a good number of police officers have retired with pensions that are higher that their working salaries and made some questionable investments (a baseball stadium that was finally built and a soccer stadium that wasnt) in recent years, but it has had nowhere near the mismanagement that plagued Bridgeport or Waterbury before those cities submitted to state oversight.

The citys fundamental problem is that it doesnt have enough taxable property to support itself.Connecticut is heavily reliant on the property tax; it is virtually the only way municipalities can raise revenue.

Hartford occupies only 18 square miles, and more than half of its property is off the taxable grand list hospitals, colleges, government buildings, etc. The city has far and away the highest tax rate for commercial property in the state, 74.29 mills, and Mayor Bronin is loathe to raise it.

Lack of an adequate tax base is a characteristic of several distressed cities. Central Falls, for example, has 19,000 people on an astoundingly small 1.2 square miles. One of the efforts to revive the city has been a task force aimed at getting foreclosed properties back on the tax rolls, said principal planner Trey Scott.

With less taxable property than some of its suburbs, but with the bills for many of its regions social ills, Hartford can only raise about half the money it spends, and must rely heavily on state assistance.

Bronin said he has cut 100 jobs and $20 million from the budget, but still has fixed costs pensions, health care and debt service that are rising. He said the city is being run efficiently, and he would welcome someone looking over his shoulder.

An oversight panel might give the city some leverage with its unions one of which voted down a contract last month that would have saved the city $4 million over six years. But though union concessions are probably essential to gaining more state help, they wont by themselves balance the budget.

A one-time bailout wont work either; the city needs a revenue source for a period of years to meet rising debt and pension obligations. The legislature could provide ongoing help by adding to the sales tax, or, as Bronin noted in his budget message, by fully funding state reimbursements for nontaxable property, known as payments-in-lieu-of-taxes, or PILOT, a program that has been chronically underfunded for decades. Fully funding PILOT would provide Hartford with enough money an estimated $50 million a year to stabilize its budget.

As Hartford officials are well aware, it is not a good time to ask. The state faces a daunting deficit of more than $5 billion over the next two years. Lawmakers have gone into special session to work on the budget, and are not expected to have a solution for Hartford until the state budget is completed.

Though it will be challenging to find more money for Hartford, Bronin argues that it is essential that the state create more economic and social vibrancy in its major cities, making them a draw for bright young people, because thats what businesses are looking for today. The departure of GE from its suburban Fairfield campus to Boston and the impending departure of Aetnas headquarters from Hartford would appear to support his argument.

Some distressed cities across the country have gotten back on the road to prosperity, via sound economic planning. Pittsburgh, for example, invested in medicine and technology, along with arts, infrastructure and riverfront activity, which have helped the city recover from the crushing loss of the steel industry in the latter half of the last century.

Hartford has a number of initiatives underway downtown housing, a new UConn branch, bus and train transit, plus a longstanding riverfront revival program that should help its economic growth. It is one of four cities awarded a share of $30 million by CTNext to create high-tech innovation hubs.

It just needs, somehow, to bridge the budget gap.

This is not a drill. Hartford may once have been the richest little city in the country a comment attributed to the renowned novelist Henry James but it is no longer.

The Jan. 9 city council agenda had a proposed resolution urging the city to buy a re-usable tree for Christmas presentation and cease purchasing poinsettias and/or other plants to decorate city hall until the city is financially able to do so.

It has come to that.

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For Hartford, bankruptcy not an easy way out - The CT Mirror

Retailer BCBG Unveils Going-Concern Bankruptcy Sales – Wall Street Journal (subscription)

Posted on June 9, 2017 by Danzig

Retailer BCBG Unveils Going-Concern Bankruptcy Sales
Wall Street Journal (subscription)
Women's clothing retailer BCBG Max Azria Group LLC announced bankruptcy deals worth $165 million to sell off its core businesses, which would live on as a going concern. Marty Staff, BCBG's interim acting chief executive officer, said the proposed ...

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Retailer BCBG Unveils Going-Concern Bankruptcy Sales - Wall Street Journal (subscription)

Abengoa Bankruptcy Liquidation Plan Confirmed – Bankrupt Company News (press release) (blog)

Posted on June 9, 2017 by Danzig

The U.S. Bankruptcy Court confirmed Abengoa Bioenergy US Holdings Third Amended Joint Plans of Liquidation.

As previously reported, The Plan as currently proposed, including the proposed treatment of the MRA Guarantee Claims, is premised on substantive consolidation and provides Bioenergy General Unsecured Creditors with a substantially higher recovery than they could otherwise expect to receive. The most important consideration for the Holders of the MRA Guarantee Claims was that their entitlement to the $32.5 million.

In addition, The proposed settlement allows the Plan Proponents to avoid costly, time consuming, and potentially uncertain litigation, whereby if unsuccessful certain creditors would receive no recovery in 2017 and little, if any recovery in 2018, or even later if the parties engage in protracted litigation. As reflected in the Liquidation Analysiswithout the proposed settlement of the MRA Guarantee Claims, most of the available proceeds for distribution to Holders of Bioenergy General Unsecured Claims would have been distributed to the Holders of MRA Guarantee Claims, leaving Holders of Bioenergy General Unsecured Claims with a small fraction of their projected recovery under the Plan as proposed.

The order states, Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, the Cofides Settlement is an integrated compromise and settlement of numerous issues and disputes designed to achieve a beneficial and efficient resolution of these Chapter 11 Cases for all parties in interest. The Court finds that the relief sought in the Cofides Settlement Motion is an exercise of sound business judgment, and is in the best interests of the Debtors, the Debtors estates, creditors, and all parties in interest, and that the legal and factual bases set forth in the Cofides Settlement Motion establish just cause for the relief granted herein, and that the Cofides Settlement Motion satisfies rules 2002 and 9019 of the Federal Rules of Bankruptcy Procedure.

This renewable energy plant operator filed for Chapter 11 protection on February 24, 2016, listing $648 million in pre-petition assets.

15-year Mesothelioma Survivor Living Life By Design – Asbestos.com (blog)

Posted on June 9, 2017 by Danzig

Diagnosed with peritoneal mesothelioma at age 15, Alyssa Hankus adolescence was anything but normal.

She missed nearly her entire freshman year of high school and spent much of her sophomore and junior years in and out of hospitals dealing with the effects of aggressive cancer treatments.

I wanted everything that wasnt necessarily promised to me at that point in time, Hankus told Asbestos.com. I wanted to go to school and get married and have kids and to grow old and have grandkids. All of these different things, I wasnt going to take no for an answer.

The 15-year mesothelioma survivor, who is now 30, is making good on some of those goals.

Despite all the missed classroom time, Hankus graduated high school in four years. She later earned a bachelors degree in interior architecture from UNC Greensboro and recently got her first job in the industry, designing eating spaces for colleges, restaurants, businesses and health care facilities.

For a moment, she considered nursing as a way to give back, but her passion has always been design.

I thought maybe I could give back in that way through hospital design, she said. Being in there for as long as I was, its a way to make it better for all those involved patients, doctors, what have you.

Hankus hopes the position can be a stepping stone to one day designing patient rooms, as a way to touch the lives of patients and make them feel as comfortable and at home as possible when facing an illness.

Alyssa Hankus with her boyfriend, Eric.

Outside of her career, Hankus enjoys spending time with friends and her three young nephews. She looks forward to a future with her boyfriend in hopes of having kids and starting the next chapter of her life.

Its all a part of that continued fight of making it and achieving all of the things that at 15 I was told I never would, she said. Those little day-to-day simple joys are what mean so much, because those were never promised to me.

Mesothelioma has a long latency period, meaning it typically takes years often decades between a patients initial exposure to asbestos and the development of symptoms.

The overwhelming majority of cases are diagnosed at ages 75 to 84.

My doctors told me it takes at least 15 years to present symptoms, but I actually started showing symptoms around age 12, Hankus said.

She hasnt been able to pinpoint when or where her asbestos exposure occurred a common issue for women who dont fit the traditional mesothelioma patient profile of older men who worked high-risk jobs.

At the time of her diagnosis, Hankus was told she was one of 10 children in the world diagnosed and only the second to survive.

Im sure there are more out there, but all of the survivors Ive met are adults, she said. It is just so rare in children.

Because of the incredible odds, Hankus didnt receive her mesothelioma diagnosis until three years after she began showing symptoms.

The doctors thought that it was just growing pains, because it wasnt that severe at first, she said.

In the fall of her eighth-grade year, the pain intensified to the point where her mom had to rush her to the hospital.

They thought at first that it was my appendix because of where the pain was located, Hankus said.

During an appendectomy, doctors discovered a troubling sight.

The lining of my stomach was twisted like a dish rag, she said.

Doctors removed part of the lining attached to the back of the appendix but still couldnt determine the underlying issue.

The pain continued, which eventually led Hankus to Johns Hopkins Hospital in her hometown of Baltimore, Maryland. Pediatric physicians there determined she had irritable bowel syndrome and prescribed a corticosteroid that unfortunately made her undiagnosed cancer grow faster, causing more pain.

In October 2001, Hankus agreed to an exploratory surgery at Hopkins, but the pediatric surgeon involved had never seen mesothelioma before. An oncologist who specializes in adults later delivered the diagnosis.

Hankus treatment plan started with chemotherapy, but it was too much for her young body to take.

They were initially going to do six rounds of chemotherapy but were only able to do three because it was killing me, she said. I wasnt even able to keep ice cubes down. I was throwing up everything and losing a ton of weight.

Making matters worse, Hankus came down with a case of fungal pneumonia.

Everything was fighting against my body, she said.

The next option became exploratory surgery and hyperthermic perioperative chemotherapy (HIPEC). Hankus transferred to the National Institutes of Health in Bethesda, Maryland, and she was placed under the care of Dr. Richard Alexander, an internationally recognized surgical oncologist who specializes in treating abdominal cancers.

A week before her procedure in 2002, a CT scan revealed what doctors called a complete snowstorm around the lining of her stomach. They determined the mesothelioma cancer was in the most advanced stage.

Doctors released Hankus for the week to celebrate Easter with her family. It was her first holiday home from the hospital in five months.

When surgery day arrived, the unexplainable happened. The expected 10-hour surgery took only half that time. Alexander had to respond to an emergency, putting Hankus operation in the hands of another surgeon.

My family and people from our church were together praying, so the doctor waited to let them finish praying and give them the news, Hankus said. He told them the lining was pristine, that there were only three acorn-sized tumors and two microscopic specs.

The rest was clean. There was no snowstorm as previously described. Hankus surgical team couldnt explain it. Years later, the lead surgeon told her that he didnt expect shed make it off the operating table that day.

Honestly, I give it to God, Hankus said. To have such a different outcome and such little evidence of the mesothelioma, no one could explain with science.

Although the surgery went far better than expected, Hankus experienced residual pain for two years.

Return visits to NIH became frequent.

They tried all kinds of things like acupuncture and hypnosis and just kept increasing the narcotics, trying to get rid of the pain and not knowing what the source of it was, she said.

Hankus was eventually able to get on an adult program back at Johns Hopkins. Doctors there planned to get her off the high dosages of pain medications through three weeks of in-patient care and six weeks of out-patient care.

During the first few weeks of the program, doctors agreed to let Hankus parents take her to a healing service led by evangelical minister Kenneth Copeland and his wife, Gloria.

Gloria Copeland laid her hands on me and the pain went away that night and never came back, Hankus said. I was able to get off the medicine without any withdrawal symptoms. Doctors couldnt explain it. Its just been one miracle after another.

She was able to return to high school, but it took a toll on her immune system, which was readjusting to life outside of a hospital room. After graduating, the adjustments continued through community college.

It took me about four years to get a two-year degree, only because my stamina was too low, she recalled.

In her last year at the community college, Hankus challenged herself, taking on more classes and joining clubs to prepare her body and mind for the rigors she would face in the interior design program at UNC Greensboro.

Alyssa Hankus with her parents after graduating from UNC Greensboro.

I wanted to prove to myself that I could do it, she said.

She did and is now living her dream as a designer. Her next milestones: Marriage and starting a family.

Now 15 years in remission, she hopes her story will inspire other survivors and raise more awareness that mesothelioma doesnt only affect older men.

A big part of your survival is your mindset, she said. Im just trying to make the most of a future that wasnt promised to me.

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15-year Mesothelioma Survivor Living Life By Design - Asbestos.com (blog)

Nuclear war: the US took a highly bureaucratic response to preparing for it – The Australian Financial Review

Posted on June 9, 2017 by Danzig

Former US President Richard Nixon. After Nixon's first briefing on the use of nuclear weapons there were only five possible retaliatory or first-strike plans, and none involved launching fewer than 1000 warheads national security adviser Henry Kissinger said: "If that's all there is, he won't do it."

Garrett Graff says that his new book, Raven Rock, a detailed exploration of the United States' doomsday prepping during the Cold War, provides a history of "how nuclear war would have actually worked the nuts and bolts of war plans, communication networks, weapons, and bunkers and how imagining and planning for the impact of nuclear war actually changed ... as leaders realised the horrors ahead."

But if there is anything that Raven Rock proves with grim certitude, it is that we have little idea how events would have unfolded in a superpower nuclear conflict, and that technological limits, human emotion and enemy tactics can render the most painstaking and complex arrangements irrelevant, obsolete or simply obscene.

These contradictions are evident with each commander in chief Graff considers. During an apparent attack that proved to be a false alarm, Harry Truman refused to follow protocol and instead remained working in the Oval Office. Same with Jimmy Carter, who after a 1977 drill wrote in his diary that "my intention is to stay here at the White House as long as I live to administer the affairs of government, and to get Fritz Mondale into a safe place" to ensure the survival of the presidency.

And after Richard Nixon's first briefing on the use of nuclear weapons there were only five possible retaliatory or first-strike plans, and none involved launching fewer than 1000 warheads national security adviser Henry Kissinger was blunt about the president's dismay with his alternatives: "If that's all there is, he won't do it."

Graff, a former editor of Washingtonian and Politico magazines, covers every technicality of the construction of underground bunkers and secret command posts, every war game and exercise, every debate over presidential succession planning and continuity of government, every accident that left us verging on nuclear war. It is a thorough account, and excessively so; the detail is such that it becomes hard to distinguish consequential moments from things that simply happened. He describes one presidential briefing on nuclear tactics as "a blur of acronyms and charts, minimising the horror and reducing the death of hundreds of millions to bureaucratic gobbledygook", and at times this book commits the same offence.

Its power, however, lies in the author's eye for paradox. The plans for continuity of government and nuclear war are cumulative, developed in doctrines, directives and studies piling up over decades; yet it is up to short-lived and distracted administrations to deploy or reform them. War planning hinges on technology that constantly evolves, so plans invariably lag behind. More specifically, continuity of government depends on keeping top officials alive, yet "the precise moment when evacuating would be most important also was precisely when it was most important to remain at the reins of government", Graff writes.

Defence Secretary Donald Rumsfeld proved the point on September 11, 2001, when he stayed at the Pentagon and dispatched Paul Wolfowitz to Raven Rock, the Pennsylvania mountain hideaway north of Camp David that serves as the namesake for this book. "That's what deputies are for," the Pentagon chief explained, in a beautifully Rumsfeldian line.

There are more personal reasons people would choose not to leave Washington in the case of looming nuclear war. For years, evacuation plans excluded the families of senior officials. Apparently the wives of President Dwight Eisenhower's Cabinet members were less than pleased to learn that they had not made the list, even while their husbands' secretaries had. And when an administration representative handed Earl Warren the ID card that would grant him access to a secure facility in an emergency, the chief justice replied, "I don't see the pass for Mrs Warren." Told that he was among the country's 2000 most important people, Warren handed the card back. "Well, here," he said, "you'll have room for one more important official."

Perhaps the presence of the Supreme Court would prove inconvenient, anyway, because a post-nuclear America could easily become "an executive branch dictatorship", Graff explains. Eisenhower worried about this, though it did not stop him from establishing a secret system of private-sector czars who would step in to run massive sectors of the US economy and government, with the power to ration raw materials, control prices and distribute food.

When President John Kennedy discovered this system, he quickly dismantled it, even if his younger brother, Attorney General Robert F. Kennedy, carried around a set of pre-written, unsigned documents providing the FBI and other agencies sweeping powers to detain thousands of people who could be deemed security threats in wartime. And the Eisenhower-era Emergency Government Censorship Board, rechristened the Wartime Information Security Program under Nixon, was finally defunded after Watergate. However, as Graff notes, "the executive orders all still remained drafted ready for an emergency when it arrived".

For all the ominous directives and war scenarios, there is something random and even comical about planning for Armageddon. How many Export-Import Bank staffers rate rescuing? How many from the Department of Agriculture? A Justice Department public affairs official was once even tasked with compiling a lineup of Washington journalists who should be saved. "I remember painfully going over a list of people and wondering how do you balance a columnist I didn't think very much of as opposed to a reporter who I thought really did work," he said.

And then, what should the chosen few take along? The congressional bunker at the Greenbrier resort in West Virginia, for instance, included a stash of bourbon and wine; staffers "swore that the stockpile was to be used only to aid a hypothetical alcoholic congressmen who might need to be weaned off".

Raven Rock revels in the expensive machinery and elaborate contingency formulas presidents had at their disposal to command the nuclear arsenal. High-tech ships known as the National Emergency Command Post Afloat (nicknamed the "Floating White House") were ready for use from 1962 into the Nixon years, while a string of EC-135 aircraft flights (codenamed "Looking Glass") began continuous shifts on February 3, 1961, ensuring that one senior military leader with the proper authority would always be available to order a nuclear strike. Not "breaking the chain" of these overlapping flights became a US military obsession, and it remained unbroken until the end of the Cold War.

Some efforts were low-tech, too: In 2009, President Barack Obama signed an executive order decreeing that the Postal Service would be responsible for delivering "medical countermeasures" to homes across America in case of biological attacks, because it had a unique capacity for "rapid residential delivery". (Neither snow nor rain, nor germ warfare.)

Technology meant to defend can prove risky. In November 1979, NORAD computers detected a massive Soviet assault, targeting nuclear forces, cities and command centres. Turns out someone had mistakenly inserted a training tape into the system. Six months later, a faulty 46-cent computer chip briefly made it seem like 2200 Soviet missiles were soaring toward US targets. And in September 1983, Soviet satellites identified five US missiles heading toward the USSR except the satellites had mistaken the sun reflecting off cloud cover as the heat of a missile launch. "The Soviet early-warning system was a dangerous mess," Graff writes. Ours wasn't that great, either.

Over the decades, shifts in nuclear policy reflected presidents' views on what was possible, technologically and strategically. Eisenhower planned for "massive retaliation" attacks, Kennedy relied on the notion of mutually assured destruction, and Carter imagined a drawn-out war, in which an initial nuclear exchange could produce weeks of inaction before follow-up strikes. Ronald Reagan issued a presidential directive suggesting for the first time that the United States should "prevail" in a nuclear war, even if the 1983 television movie The Day After later left him feeling "greatly depressed", as he wrote in his diary.

For all the horrors it contemplates, Raven Rock proves most depressing for those of us left outside the bunkers. Though early on, Cold War administrations regarded civil defence as a priority, officials quickly realised how hard it would be to protect the American population from nuclear attack, especially as the shift from bombers to missiles reduced response times from hours to minutes. "Rather than remake the entire society," Graff writes, "the government would protect itself and let the rest of us die."

But every mushroom cloud has a silver lining: Graff reports that the IRS considered how it would collect taxes in the post-nuclear wasteland and concluded that "it seemed unfair to assess homeowners and business owners on the pre-attack tax assessments of their property".

Leave it to a nation founded in opposition to unfair levies to study the tax implications of the end of the world.

Washington Post

Raven Rock: The Story of the US Government's Secret Plan to Save Itself While the Rest of Us Die, by Garrett Graff, published by Simon & Schuster. Lozada is the non-fiction book critic of The Washington Post.

Washington Post Book World

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Nuclear war: the US took a highly bureaucratic response to preparing for it - The Australian Financial Review

When is the Left ever Right – WSAU (blog)

Posted on June 9, 2017 by Danzig

In case you missed this blog from May 17th, I think it is a good time to bring it up again. Especially in the wake of the Media's lies about Trump being exposed yesterday.

Wednesday, May 17, 2017 11:24 a.m. by Ben Armstrong

It seems left can never be right. This is true when you are talking physically and politically!

Bigger Government helps freedom?

The bigger the government - the more rules and regulations. Automatically that reduces freedom.

Corporations oppress you?

Only the government can oppress you because they make the laws. When in history has corporations thrown people in jail and oppressed a nations population. You have to be a moron to believe this. Only forms of Government can do this. Every oppression in HISTORY has been done by some form of Government.

Abortion doesn't kill babies?

Do I EVEN have to say anything. No one, and I mean NOT one person, really believes this. They all know that when a woman is pregnant, she is Pregnant with a baby. They just don't care.

Boys and Girls are the Same?

.................... Um .........Yeah.......

Raising Taxes helps the economy?

Who are these people? I don't have to teach basic economics, do I? Taking money out of the economy can not boost it. Economies can grow despite taxes, not because of them.

Disarming people makes them safer?

Walls don't make people safer?

People sneaking into the country Illegally is a good thing?

Killing convicted murders is wrong - Killing babies is a right?

We are all going to die from global warming? (because we are outside of nature)

We came from Monkeys? (because we are of nature)

I could go on and on. Pick an issue, any issue you want. Guess what, the left isn't right.

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When is the Left ever Right - WSAU (blog)

‘War on drugs’ is costing thousands of lives Press Enterprise – Press-Enterprise

Posted on June 9, 2017 by Danzig

While American foreign policy has for years fixated on the conflict in Syria and the Middle East, just across the border in Mexico and throughout Central America tens of thousands of people lost their lives last year because of the conflict between drug cartels competing to deliver illicit drugs into the United States.

According to a recent report from the International Institute for Strategic Studies, whereas approximately 50,000 lives were lost in Syria last year, approximately 39,000 were killed in Mexico, Honduras, Guatemala and El Salvador, much of which is attributable to drug-war violence.

Mexicos homicide total of 23,000 for 2016 is second only to Syrias, and is only the latest development in a conflict which stretches back to 2006, when President Felipe Calderon deployed the military to combat drug cartels.

Although the exact number of people killed because of the drug war in Mexico is unlikely to ever be known, a recent report from the Congressional Research Service cited estimates from 80,000 to more than 100,000 in that country alone.

The cause of this violence is obvious, and it is a direct, predictable consequence of our failed policy of drug prohibition. In the near-half century since President Richard Nixon declared a war on drugs, hundreds of thousands of Latin Americans have been killed in conflicts fueled by a lucrative illicit drug trade made possible by our prohibition of drugs.

This is an insight a certain New York developer possessed 27 years ago. Were losing badly the war on drugs, Donald Trump said in 1990. You have to legalize drugs to win that war. You have to take the profit away from these drug czars.

While Trump may have since lost this insight, the fact remains that the war on drugs does more harm than drugs themselves.

Last year, Colombian President Juan Manuel Santos used his Nobel Peace Prize acceptance speech to call for a rethink of the drug war, which contributed to decades of conflict in Colombia that killed hundreds of thousands.

Rather than squander more lives and resources fighting a War on Drugs that cannot be won including in our inner cities the United States must recognize the futility and harm of its drug policies.

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'War on drugs' is costing thousands of lives Press Enterprise - Press-Enterprise

New war on drugs – Fort Wayne Journal Gazette

Posted on June 9, 2017 by Danzig

More than 59,000 Americans died of drug overdoses in 2016, according to a recent analysis by the New York Times.

Drug overdoses are now the leading cause of death among Americans under 50, the Times reported Monday. Cautioning that the data are preliminary, the Times estimated drug deaths rose 19percent over the 52,404 recorded in 2015. And all evidence suggests the problem has continued to worsen in 2017.

It's worsening here, as well.

This year, from Jan. 1 to the end of May, there were 468 drug overdoses in Allen County, Fort Wayne Police Capt. Kevin Hunter said Thursday. During the same period in 2016, there were267 drug overdoses.

As of this week, overdoses have led to 35 confirmed deaths; toxicology results are awaited in 15 other fatalities. It's likely, Hunter said, that those will also be confirmed as drug deaths.

In all of 2016, there were 68 overdoses.

Nationally and locally, the increases in deaths are being driven by addictions to opioid pills and heroin. Hunter, who leads the Fort Wayne department's drug-fighting efforts, said his officers also are seeing an increase in overdoses caused by the synthetic cannabinoids known as spice, though to his knowledge none of the spice victims has died.

Authorities have tried manynew strategies locally and statewide, tightening access to opioid medicines, improvingtraining formedical workers, making naloxone the overdose antidote more widely available and, recently in Fort Wayne, trying to follow the drugs that caused overdoses back to their sources. But as the problem shows no signs of abating, more attention has shifted to the need for more resources to treat addicts. Even with more federal and state funds being allocated, there's a sense that treatment facilities can't keep up.

In Ohio, where the Times estimated overdose deaths there increased by 25percent last year,officials adopted a strategy Indiana should consider. The state sued the pharmaceutical industry, contending that misleading marketing campaigns fooled patients and doctors into believing opioids were safe.

Modeled on legal actions against the tobacco industry in the 1990s, the opioid lawsuits are viewed as a way to raise funds to fight health problems it can be argued the companies involved helped create.

West Virginia won a similar lawsuit that will provide the state tens of millions of dollars, the Times reported, and lawsuits also have been filed by Mississippi, the city of Chicago and by counties in several states.

We are aware of the filings in Ohio and will be following this lawsuit closely, Attorney General Curtis Hill said in a statement emailed to The Journal Gazette Thursday. We are also aware of actions and litigation occurring in other states in this regard. My office has been and will continue to gather information and monitor these various actions as we consider the best course of action for the state of Indiana.

Thescope of the drug problem demands that dramatic solutions be considered.

In addition to fighting opioids and spice, local police are seeing an increase in crystal meth from Mexico which offsets the good news that the numberof homegrown meth labs here has dropped dramatically. And, Hunter said, his department is bracing to deal with more cocaine, which is reportedly making a comeback in other communities.

I don't expect that things will get any better soon, Hunter said.

New war on drugs - Fort Wayne Journal Gazette

Still Don’t Think The War On Drugs Is Racist? Watch This Video – Civilized

Posted on June 9, 2017 by Danzig

If you had any doubt that the War on Drugs is racist, check out this story of two average Americans who faced the same legal problem that had very different impacts on their lives because of their racial and economic background.

In the one corner, you have Ross - a young white guyfrom Houston who got pulled over one day in his hometown. After searching his car, the cop found a sock full of a powdery substance that the arresting officer tested using a drug field kit. Ross sat in the back of the officer's car, chatting with a friend as he waited for the bad news:he was charged with possessing 252 grams of meth based on the results of the field test.

In the other corner, you have Barry, a black guy who was also pulled over in Houston one day. His vehicle was also searched, and a powdery substance found inside was also put througha field test. But unlike Ross, Barry had to wait for the result while lying on the ground with an officer's knee on his neck because they found a gun magazine in his car. No, not a 'magazine' as in a clip of bullets. Officers found a copy of Guns & Ammomagazine in his car. Barry was then taken into custody when the sample tested positive as less than a gram of cocaine.

So both men were charged for drug crimes. But Ross got to walk out shortly afterward because his dad secured a bail bond and hired a lawyer that had the case overturned after a more accurate test revealed that the sock was actually full of kitty litter. Turns out, Ross' dad put the litter-filled sock in his car after reading that it was a good makeshift de-humidifer/de-odorizer.

Barry wasn't so lucky. He couldn't afford a lawyer, so he got stuck with a court-appointed attorney who recommended taking a plea bargain instead of waiting for the results of the drug test to come through. And Barry had good reason to take the lesser sentence since the prosecutor wanted 20 years for the crime. And the judge warned him, "If you all want to play with me, by the time you get out of jail, they'll have flying cars."

So Barry ended up doing 180 days in prison. When he got out, his criminal record kept him from getting public assistance or food stamps. Then a year after his release, a lab report came out verifying that the roadside test was wrong. But he had to wait another 5 years to be exonerated of the charge.

But the worst part is that we're going to be seeing a lot more cases like Barry's because Attorney General Jeff Sessions has made it tougher to double-check the results of those flawed field tests -- which can give false positives for substances like chocolate, soap, cheese, anything with sugar and a lot of other common household items. Samantha Bee explains why in this video.

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Still Don't Think The War On Drugs Is Racist? Watch This Video - Civilized

How casinos, states are winning big from online gambling – York Dispatch

Posted on June 9, 2017 by Danzig

Elaine S. Povich, Stateline.org (TNS) Published 9:40 a.m. ET June 9, 2017 | Updated 5 hours ago

A gambler weighs his online casino gambling options from the comfort of his condo balcony just outside Atlantic City. New Jerseys gambling revenue has improved with the advent of casino-sponsored online gambling, and other states are starting to follow suit. (Elaine S. Povich/The Pew Charitable Trust)(Photo: Elaine S. Povich/The Pew Charita, TNS)

WASHINGTON For the past few years, New Jersey casinos have been losing money like most of their customers consistently. But in the last six months, the popularity of casino-sponsored online betting has reversed the fortunes of Atlantic Citys gambling palaces, cheering both casino owners and state revenue officials.

More: Pennsylvania House OKs biggest gambling expansion in years

New Jersey is one of only three states Nevada and Delaware are the others where in-state bettors can log on to websites run by casinos and gamble from the comfort of their couches, rather than going into a glitzy and noisy casino.

More: EDITORIAL: Why the rush on gambling bill?

Gambling experts say casinos that sponsor their own online wagering are making a smart play for millennials, many of whom prefer online gambling. At least eight states (California, Hawaii, Illinois, Michigan, New Hampshire, New York, Pennsylvania and West Virginia) are considering legalizing casino-run online wagering this year.

State-sanctioned, casino-sponsored online gambling is different from online gambling that originates offshore, which states cannot tax. It is also distinct from state-regulated daily fantasy sports sites like DraftKings and FanDuel, which generate taxes and fees for some states.

Chris Grove, a gambling industry consultant who runs the website PlayNJ.com, said online gambling is a key to the growth of casino revenue. Weve seen nearly every other form of commerce migrate to the internet how we shop, how we bank, how we listen to music, he said. It doesnt make sense that gambling would be an exception to that rule and the early results in New Jersey really drive that point home.

According to the New Jersey Division of Gaming Enforcement, total casino gambling revenue was $763.5 million through April of this year, an increase of 1.7 percent compared to the same period last year. The casinos winnings from online gambling, however, were $80.1 million, up 29.5 percent from same period last year.

New Jersey legalized casino-sponsored online gambling in late 2013, but it took casinos some time to create the software to take advantage of the new law, as well as for gamblers to adapt. At first, some casinos only offered a game or two online. According to New Jersey officials, online gambling increased in late 2016 and early 2017, as evidenced by a spike in revenue. The state collected $3.1 million in taxes on online gambling in April, up 23 percent from $2.5 million in April 2016.

From 2007 to 2015, New Jersey casino revenue declined by an average of 7.6 percent annually. This year, thanks in part to the increasing popularity of online gambling, casino revenue is on track for a year-to-year increase for the first time since 2006.

Kerry Langan, spokeswoman for the New Jersey department, said internet gambling raises as much revenue by itself as a small free-standing casino would. Most of the projections Ive seen from gaming analysts are that its doing well and will continue to do well, she said.

In Nevada and Delaware the impact has been smaller. In Delaware, only three casinos sponsor online gambling, and it has generated revenue of about $200,000 a month. Total casino revenue in Delaware is about $50 million per month.

In Nevada only two casinos offer internet poker, the only online casino game the state allows. Mike Lawton, senior research analyst at the Nevada Gaming Control Board, said online poker revenue is wrapped into the control boards report on poker overall, so its difficult to determine whether online poker has been a huge hit. But online sports betting, also offered by casinos, has really taken off, increasing 5 percent in the first quarter of 2017 compared to the same period last year.

A lot of the reason for the sports book business taking off is people being able to do it on their phone. Its a huge convenience, he said, noting, We do everything else on our phones.

Every state that has legal gambling collects taxes or fees from it. There can be a tax on casinos revenue, hefty fees to procure a casino operating license, a tax on gamblers winnings, an entertainment tax on casinos or players, a tax on lottery locations, a tax on poker machines at bars or some combination of the levies. In general, casinos must pay gambling taxes in addition to corporate taxes.

Despite the online gambling spike in New Jersey and elsewhere, overall gambling tax revenue in the states is flat on average, according to Lucy Dadayan, senior research scientist at the Rockefeller Institute of Government.

In 17 states she studied, tax revenue from gambling declined by 0.4 percent in the fourth quarter of 2016, compared to the same quarter of 2015. However, there was some growth in tax revenue in the first quarter of 2017, at 0.6 percent. A big part of the increase was the opening of a new casino in Maryland, she said.

The overall total tax revenues for casinos should be interpreted with caution and should not be viewed as a positive sign, she said. She noted that online casino gambling is not easy to implement and comes with a lot of regulation.

Because New Jersey requires people who play online casino games to be in the state, it has developed tracking software to determine a bettors location. That means a gambler who lives in Pennsylvania must travel to New Jersey to play an online casino game.

New Jersey online (gambling) has definitely come on very strong, said David Schwartz, director of the Center for Gaming Research at UNLV. People enjoy playing online rather than in casinos.

But Jackson Brainerd, who studies state gambling for the National Conference of State Legislatures, said while income from casino-sponsored online gambling has been robust, it has not lived up to predictions. In New Jersey, for example, it was expected to generate $1.2 billion in the first year, resulting in $180 million for the state.

In Pennsylvania, the states continuing budget woes have given a push to casino-sponsored online gambling. The state Senate in May passed a measure that would legalize it in January 2018. Sponsors believe the outlook in the House is better this year than last, when a similar bill failed to pass.

Under the measure, Pennsylvania casinos that want to sponsor online gambling would have to pay a one-time $10 million fee to the state. Vendors supplying the gambling platform would pay the state $5 million, and revenue would be taxed at 25 percent, 15 percent of which would go to reduce property taxes, a longtime sore point among Pennsylvania taxpayers.

We hope we can generate $100 (million) to $125 million more, said Senate Minority Leader Jay Costa, the Democrat who sponsored the legislation. He said some casinos are worried that they will lose in-house gamblers to the online version, rather than expanding their customer base. But the prospect of a new state revenue source has persuaded some legislators that its time to implement online casino games.

In New York, Senate panels have passed a bill that would legalize and regulate online poker games, though the proposal is still awaiting a vote by the full Senate. A similar bill passed the Senate last year, but died in the House without being considered. A 10-year license fee would cost $10 million, and the state would levy a 15 percent tax on revenue.

State Sen. John Bonacic, a Republican sponsor of the bill, sweetened the pot this year with a provision that mandates that the revenue from casino-sponsored online poker be used for education.

This bill is necessary to provide consumer protections and combat illegal websites that are currently offering online poker to New Yorkers further it would bring in additional revenue for education, he said in an email.

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How casinos, states are winning big from online gambling - York Dispatch

Insurance Is Gambling, Seriously – Seeking Alpha

Posted on June 9, 2017 by Danzig

Gambling is defined as wagering money (or something else of value) on an event with an uncertain outcome. The primary aim of gambling is to win more than the amount wagered. To place a gambling bet, you need to have three things: consideration, chance, and a prize. Casinos are the most obvious venue for gambling but not the only place gambling takes place. There are online poker sites and sports betting sites, Super Bowl office pools, Lotto, and quite a few other non-site specific ways in which to place wagers.

Insurance is a very specific type of gambling. Yes, it is a means of protecting the insured party from some kind of financial loss. And yes, it is also a risk management tool used to hedge against a contingent, uncertain loss. But insurance is also very clearly gambling. Two parties agree on the consideration (by calling that wager a premium instead), the type of chance (by using expectations of when the insured might die, for example), and a prize (by referring to the winnings as a death benefit). It's a consolation prize for the beneficiaries but a prize nonetheless.

I am by no means the first person to make this connection - some already consider it such common wisdom at this point that it's become a clich to them. But if you are one of those folks who don't see it that way, the notion that insurance is gambling would be more obvious to you if, the next time you bought an insurance policy, you paid for it in a setting more representative of the transaction. For example, it would help if you bought your policy at an insurance parlor which included drinks brought to you by a semi-clad waitress, amidst the faint odor of stale Lucky cigarette smoke, with a pirate show outside for the kids, more R-rated entertainment inside, and a luxury hotel room upstairs where you can crash at 4 a.m. Your insurance agent should be staring at you indifferently, rake in hand, and shuffling insurance documents for you to execute. After signing, you could leave town with several secrets to keep from your spouse. Any of this beats getting cornered at a cocktail party by an insurance rep who won't stop yammering at you about how important it is to protect your home, life, limbs, kids, and future compensation.

I understand that may be asking too much from insurance companies, a financial services specialty group which very much wants its customers never to make those kinds of comparisons. Yet, if you thought that the connection between these two gambling businesses would lead to cross coverage by sell-side analysts, well, dear friend, you thought wrong. I've compared company research coverage lists within both sectors and not run across a single senior analyst at any reputable Wall Street firm legitimately covering both types of companies.

Then, it dawned on me. What would happen if securities analysts really took the gambling connection between casino operators and insurance companies seriously? How would they compare the different types of gambling operations these two types of companies manage? On what basis would they compare their operations, profitability, or the quality of their respective managements? What about the relative returns to their equity and debt investors? What would they conclude? At the risk of being the pioneer with all sorts of arrows in his back, I am going to attempt to do just that. Someday, you may proudly say 'I was there at the creation' - I'd rather not specify what the alternative comment might be as I am sure I'll be seeing it in the comment thread below.

Comparing Operating Metrics and Returns. From an operational and profitability perspective, leading gaming and insurance companies couldn't be more different, despite the bets they're accepting. Putting it in gambling terms, casino companies are more like high rollers, and insurance companies are more similar to those grandmas you see in Vegas spending all Tuesday at a one-armed bandit with a bucket of chips. Let's make some explicit financial comparisons. To do this, I've taken a representative group of gaming companies and a representative group of insurance companies and looked at their financial statements and key metrics.

I started by pulling together summary consolidated financial data from seven leading global gaming companies - Caesars (NASDAQ:CZR), Galaxy Entertainment (OTCPK:GXYEF), Las Vegas Sands (NYSE:LVS), Melco Resorts (NASDAQ:MLCO), MGM Resorts International (NYSE:MGM), SJM Holdings (OTCPK:SJMHF), and Wynn Resorts (NASDAQ:WYNN). What matters is not the absolute size of these companies' consolidated revenue, operating income, EBITDA, or cash from operations. It's the year-over-year growth rate of revenue, comparative levels for Adjusted EBITDA margin, cash from operations as a percentage of revenue, ROA, ROE, leverage, and interest coverage statistics. I've italicized those items within the table.

Here are a few takeaways from the summary table below. First, during the past five years, revenue growth at the major casino operators dropped off a cliff and only began a recovery last year. Second, Adjusted EBITDA margin trended upward within a range of 21.5% to 25.6%. Frankly, part of that is due to an increasing emphasis by the gaming companies on non-gaming, higher margin entertainment (and food). Third, the major operators increased capex in response to drooping top lines, yet they were still able to improve cash flow from operations. Fourth, while Return on Assets faltered (lower net income, higher asset bases), Return on Equity began to bounce back by the end of FY'16. Fifth, total debt as a percentage of total capital also spiked back up in FY'16. Last, I excluded the non-US listed gaming companies for purposes of the interest coverage calculation as the numbers from Galaxy and SJM would distort the ratio significantly upward - the major U.S. gaming companies are basically flat over the five-year period at about 5x leverage:

Note that the metrics used for judging the casino operators are the more general metrics used in sector reports rather than more granular metrics like casino win, table drop, slot machine count, room revenue, etc. Those are all highly useful in analyzing individual casino companies and comparing them to other casino companies. In this case, what's needed are the kind of metrics that will permit comparison between casino companies and non-casino companies. You have to go one level up. You swap many nuanced details for a chunk of comparability.

I ran a similar five-year analysis of the operating metrics and returns for four leading life insurance companies: Lincoln Financial (NYSE:LNC), MetLife (NYSE:MET), Principal Financial Group (NYSE:PFG), and Prudential Financial (NYSE:PRU), In this case, I used insurance sector metrics that are not so sector-specific that they would prevent me from making comparisons to non-insurance sector companies. So, while they are not exactly the same as those used for the casino companies in the table above, most of them are analogous to those metrics as they provide a means to assess the growth rate of revenues, stability of margins, and the relative size of returns, leverage, and coverage.

I took two different looks at operating margin at the insurance companies using two different metrics. First, the ratio of Operating Income to Net Premiums Earned where the Operating Income in the numerator is equal to total revenue - insurance claims - underwriting costs - other operating expenses. The other operating margin metric I show in the table is Operating ROE. This measures a company's operating profits in relation to the money its shareholders invested in the firm. It's just the annual operating income - realized gain or loss in the investment portfolio divided by the average amount of common equity during the period. The result, multiplied by 100, provides the percentage Operating ROE.

The results are summarized in the table below. As in the case of the leading casino companies, there are several observations to take away from this sample group of leading insurance companies' metrics and trends. First, after a roaring start, net premiums earned - the main component of total revenue - has dwindled toward 1-2% type year-over-year growth. In addition, net investment income at the insurance companies has scarcely kept pace with either debt or equity markets. By way of comparison, the Bloomberg Barclays U.S. Universal Total Return Index for bonds averaged 2.1% each year while the S&P 500 was up 14.3% per annum. Here, you are looking at an average annual increase in NII of 1.5%. Total revenue growth at the insurance companies beats the pattern at the casino operators, most of whom would like to forget the outright revenue declines they experienced in 2015. On the other hand, neither set of companies would want to continue running at low single digit growth rates:

With respect to margins at the insurers, as shown in the preceding table, Operating Income to Net Premiums Earned rose above 30% and then fell back just below it during the period. One might compare that trend to the generally rising operating margins at the casino operators, even if the calculation of the specific metrics is not directly comparable. More directly comparable are the ROA and ROE figures. In general, the insurance companies have much lower ROA and ROE because of the huge amount of capital needed to fund the business. More striking is the pattern: ROA and ROE for the insurance group ran up and then down while the casino companies' ROA and ROE has bounced around quite a bit more, albeit at higher levels. Much of that volatility has to do with the reorganization of CZR, but even without that, returns at the casino companies would be more volatile. There's a huge difference in returns from steadily hiring more insurance reps versus opening up a new entertainment complex every other year.

Last, there's no doubt which of these two groups is less leveraged. The insurance companies' total debt runs about 30% of total capital while the gaming companies average about 55%. In addition, interest coverage is generally higher at the selected insurance companies (6.2x fixed charge coverage on average) than at the leading gaming companies (5.5x EBITDA to interest coverage on average). Again, it's the pattern I'm mostly interested in for purposes of this comparison, and what I see is declining leverage and increasing coverage at the insurance carriers versus a more variable but level pattern in those two metrics at the casino operators.

Comparing Managements. Candidly, I didn't start out thinking I would write up a report comparing insurance companies to gaming companies. I was initially looking to find out which CEOs receive the most compensation while their companies have produced the worst operating results. It was only by happenstance that I noticed and then connected two things. What I first saw was that the worst pay for performance offenders are in the insurance sector. After observing this, I wanted to know whether there were any other sectors with similar characteristics that might also demonstrate that pattern, namely, high CEO pay combined with poor operating performance. It was only after making that second inquiry that I began to think about the connection between running an insurance company and running a gaming company. Would gaming company CEOs also be consistently overpaid based on the operating results for their companies? I wondered whether companies within either sector had stock prices or bond prices that were either under-performing or out-performing their relevant securities markets. In other words, has the effectiveness of management mattered to investors any more than operating performance or return metrics?

To get at the first question about CEO compensation and operational performance, I used a Bloomberg pay-for-performance comparison study. The study measures the ratio of an executive's awarded pay last year to his or her company's three-year average Economic Profit. The lower an executive's awarded pay is as a fraction of operating performance, the higher that executive ranks. Without lulling you to sleep, here are a few more details you'll need to better understand how this ranking system works. First, the Awarded Pay in the numerator consists of the executive's total compensation (salary, bonus, stocks, options, pension awards - basically, all the cash and non-cash remuneration paid to the CEO). Second, the denominator uses the subject company's three-year average Economic Profit (if positive). Economic Profit in a given year is Net Operating Profit After Tax (or NOPAT) minus a Capital Charge based on the Investment Capital used to fund the company. Investment Capital includes all equity and debt and off-balance sheet sources of funding the company's operations, and the Capital Charge is just the Investment Capital multiplied by the company's Weighted Average Cost of Capital. Third, the executive's Reported Pay is added back to Economic Profit to arrive at an Adjusted Economic Profit. Reported Pay for an executive is disclosed in the "Total" column of a company's summary compensation table, which lists awards at the grant-date fair value. The SEC mandates its disclosure from most U.S. companies, and it's a standardized calculation. Finally, if average Economic Profit was negative for the past three years, the executive's ranking in the study is based on how negative the average Adjusted Economic Profit was for the past three years.

An example always helps. In this case, we'll start with the lowest ranked CEO in the study, and given the topic areas covered by this report, you should not be surprised that an insurance company executive wins the dubious distinction of being worst on the pay-for-performance scale. Last year, MetLife Inc. awarded its CEO Steven Kandarian $21.5 million. Of that figure, $5.5 million was cash and the $15.0 million balance was non-cash. On the other hand, with respect to operating performance, while MET's NOPAT improved over the last three years under Kandarian, the Investment Capital it needed to fund its business stayed high, and that kept the implied WACC-related Capital Charges up. Hence, the calculated denominator stayed deeply negative. MET's three-year average Adjusted Economic Profit less Kandarian's $21.5 million pay package results in a negative $62,197 million. And, that places Kandarian at the very bottom of the pay-for-performance pile:

MetLife is far from the only insurance company which appears to have a grossly overpaid CEO. In fact, insurance company CEOs dominate the bottom of the survey results, occupying seven of the 10 worst CEO pay-for-performance slots. The other six are the CEOs of Hartford Financial Services (NYSE:HIG), PRU, American International Group (NYSE:AIG), Voya Financial (NYSE:VOYA), LNC, and PFG. Again, much of that is a function of the survey's emphasis on implied Capital Charges. CEOs of companies engaged in the more entertaining version of gambling don't generally require billions of Investment Capital and, therefore, don't incur high Capital Charges, even if their WACC tends to be higher.

The worst pay-for-performance in the casino space belongs to Mitch Garber at Caesars Acquisition Co. (NASDAQ:CACQ). Technically, Garber received much higher compensation than Kandarian, telling Bloomberg News, "I looked at my tax stub, the number even surprised me" - but, of the $91 million awarded to Garber in 2016, $89 million came from cashing out an equity stake in Caesar's Interactive Entertainment. Garber worked on a deal to sell CACQ's Playtika online games unit to a Chinese consortium led by Alibaba Group Holding Ltd. (NYSE:BABA) chairman Jack Ma for $4.4 billion. The deal was announced in July 2016 but took until September 23 to finalize. The sale of Playtika also helped Caesars Entertainment Corp. avoid bankruptcy. Caesars Interactive Entertainment is owned by Caesars Growth Partners LLC, a JV between Caesars Entertainment's main operating unit, Caesars Entertainment Operating Co. Inc., and Garber's company CACQ. CZR has been shifting good assets into CACQ and debt into Caesars Entertainment Operating Co. In January 2015, Caesars Entertainment Operating Co. filed for bankruptcy with $18 billion of debt. Days after the Playtika deal closed, CZR settled its bankruptcy with creditors, avoiding more expensive and lengthier litigation.

Back to pay-for-performance. Since CACQ doesn't require $800 billion or more Invested Capital every year to stay in business, even though NOPAT ran negative, Garber ranks well above Kandarian in terms of pay-for-performance. In fact, of the 1,032 executives in the survey, Garber ranks 258 steps away from Kandarian's position at the bottom of the list. There's a big difference between a pay-for-performance ranking where a CEO has a rolling three-year Adjusted Economic Profit of -$62.1 billion (Kandarian) and a rolling three-year Adjusted Economic Profit of -$267 million (Garber):

'So What,' You Say. Well, let's put it this way. By looking at the operating, profitability and CEO pay-for-performance metrics for two sets of companies with a similar underlying business but different success factors, we've learned a number of interesting things. For example, we can see that the insurers are relatively stodgy operators with low growth rates and margins. On the other hand, while the casino operators have generally provided higher rates of return on assets and equity, their leverage tends to be higher, their interest coverage tends to be thinner and, every now and again, they go bankrupt. In addition, while insurance company CEOs may run more financially docile entities, they look way overpaid relative to their companies' operating performance, mostly because they can't seem to use the vast amount of capital needed to fund their operations in an above average way. Both sets of companies share a common threat to their operations, namely, online gambling. The insurance companies would, in theory, be much more vulnerable to disruption via internet based competition than major casino companies with destination entertainment complexes.

Given these metrics and trends, if I was going to invest in a leading insurance company or a leading gaming company, on balance, I'd likely opt for the debt of the former and the equity of the latter. That doesn't mean I want to play in either space. It just means that in terms of the comparative analysis, that would be my initial inclination. From a credit perspective, the insurance companies we've looked at are simply more stable. When you compare spreads on their mostly investment grade rated bonds to the largely high yield rated gaming company bonds, you just don't get that much more by taking on higher turns of leverage and lesser interest coverage on gaming paper.

Let me give you an example, I selected the most widely traded senior unsecured notes issued by the four insurance companies discussed above and looked at their Z-spreads. The graph below shows that over the past six months, these Z-spreads have generally ranged between 100 and 150 basis points. The average for the four securities is 130 basis points, but keep in mind, this is just a small sample of securities drawn from leading global casino operators as opposed to regional, smaller gaming company bond issues:

I then took a look at certain selected gaming company loans and bonds syndicated or issued by LVS, MGM, and WYNN. I excluded the defaulted bonds of CZR (e.g., the Caesars Entertainment Operating Company 10 Second Lien Notes due 2018 trade flat with 178 days of unpaid accrued interest as of this writing). Instead, I used the LVS L+200 basis points Senior Secured 1st Lien Term Loan B due 2024 and the two of the larger, more frequently trade senior unsecured notes issued by MGM and WYNN. In the graph below, you can see that Z-spreads on these instruments are about 100 basis points wider than what you saw in the insurance company graph above, but they are also a good deal less stable than the sample insurance company Z-spreads.

If you absolutely, positively must have an extra 100 basis points, you can still get there by moving down the insurance companies' debt capital structures. For example, there are hybrid fixed-to-floating rate junior subordinated notes that have been issued by the insurance companies which are still investment grade rated and provide Z-spreads of around 200 basis points (or more). For example, the MET 5 Junior Subordinated Perpetuals flip from their fixed coupon to a floating rate in June 2020 and the PRU 5 flip from their fixed coupon to a floating rate in May 2025.

From an equity perspective, regardless of the inclination to favor gaming equities over insurance equities based on the metrics discussed previously, it's hard to make a case for these particular casino stocks right now. They trade at an average blended forward P/E multiple of 25.1x and an average blended forward Enterprise Value to EBITDA multiple of 12.3x. By comparison, the S&P 500 Index is priced at blended forward P/E and EV/EBITDA multiples of 16.7x and 10.4x, respectively. However, over the past two years and five years, the casino group's multiples have been about the same as they are now (i.e., at a premium to the S&P 500).

Would I reverse course and buy into the common stocks of the insurance companies mentioned above? Hardly. And not just because there's little in the way of growth expectations or margin expansion. True, those equities are trading at an average blended forward P/E of 10.1x, and that's certainly below the S&P Index level, but it's spot on with the average P/E multiple for the group over the past two years and five years. In other words, if you think that gap in P/E valuations between the insurers and the broader equity market will close, you might want to rethink that assumption. Equity investors in the space haven't historically been willing to pay up for the kind of performance metrics - or CEO pay - that the insurance companies generate.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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Insurance Is Gambling, Seriously - Seeking Alpha

Woodstock Moose Lodge could lose license amid illegal gambling probe – Northwest Herald

Posted on June 9, 2017 by Danzig

WOODSTOCK Moose Lodge 1329 in Woodstock could be in danger of losing its gaming and liquor license after accusations of illegal gambling activities.

A member of the Moose Lodge board of directors approached the city in March with concerns about a member who had taken out a raffle license under the boards name for a private, off-site party. Recently, more concerns were expressed about illegal gambling and possible embezzlement by the same member, City Manager Roscoe Stelford said.

We are working with the board and discussing this with them, he said. We want to continue those discussions. We have a good understanding of what has occurred and what the repercussions could be.

Stelford said he recommended the board contact the Woodstock Police Department regarding the embezzlement and illegal gambling accusations. Woodstock police werent immediately available for comment Thursday.

Mayor Brian Sager wrote a letter to Moose International General Gov. Michael Leuer on May 26 that requested intervention with the local lodge. He said the the lodges executive board told him that a member had been engaging in illegal gambling while claiming to work on the lodges behalf.

Sager also noted an associated lack of responsible accounting and reporting in regards to funds.

I certainly do not want to be forced to revoke licenses, which might result in loss of revenue and financial feasibility of one of our most cherished service organizations, Sager wrote. I respectively request you work with the leadership of our local lodge to swiftly and decisively address the underlying issue and eliminate the need for potentially negative municipal intervention.

Local Moose lodge officials and Leuer werent immediately available for comment.

In the June edition of the Moose Family Center 1329s Moose Call newsletter, it states the board of officers is seeking nominations.

Due to recent, unexpected vacancies of the Lodge Board of Officers, it is necessary to once again hold nominations for elected officers for the 2017-2018 year, the document said. Lodge elected offices that are currently vacant are: governor, junior governor, treasurer, prelate and 2nd-year trustee.

The lodge operates as a nonprofit organization with more than 1,000 members governed by a board with nine officers. It had revenue of $675,801, according to tax records filed in September 2016.

Woodstock Moose Lodge could lose license amid illegal gambling probe - Northwest Herald

With Little Notice, PA House Narrowly Moves Massive Gambling Expansion – WVIK

Posted on June 9, 2017 by Danzig

HARRISBURG (WSKG) -- The state House of Representatives quickly introduced and passed a sweeping new gambling bill Wednesday evening, which would significantly expand the industry.

Most lawmakers only laid eyes on the nearly 700-page bill about six hours before they voted on it.

The measure had already been amended and passed in both chambers. But in one afternoon, the House gutted it and inserted new language to include nearly every major gaming expansion proposed in the last several years.

It now legalizes fantasy sports betting, internet gambling, gaming tablets in airports, slot machines at off-track betting parlors, and up to 40,000 video gaming terminals in places like bars, nursing homes, and truck stops.

The bill also includes a required fix to the way casinos pay fees to their host municipalities.

Many House members--including Bucks County Republican Scott Petri, who heads the Gaming Committee, protested the bill being brought to a vote with so little input from lawmakers.

Petri called the measure a "a complicated, convoluted regulatory scheme that we have no idea whether it'll be effective," adding that "The only thing we know is once we make it law, the gaming control board will be stuck with it, and we will be left with a surprising bill."

Specific complaints included longstanding concerns that expanding gaming to new platforms--like the internet and remote video gaming terminals--will "cannibalize" business from traditional casinos, revenue from which helps subsidize programs for the elderly.

The bill is expected to raise hundreds of millions of dollars for the financially-struggling commonwealth, though it doesn't yet have a formal fiscal note.

It now goes to the Senate, where it likely faces changes.

With Little Notice, PA House Narrowly Moves Massive Gambling Expansion - WVIK

Rockland’s chief detective retiring after 45 years investigating murders, corruption – The Journal News / Lohud.com

Posted on June 9, 2017 by Danzig

Rockland County District Attorney Chief of Detectives Peter Modafferi recounts 45-year career as he prepares to retire. John Meore/Lohud

Peter Modafferi, Rockland County District Attorney's Chief of Detectives, recounts his 45-year career. Photographed at the Rockland County District Attorney's Office in New City on Monday, June 5, 2017.(Photo: John Meore/The Journal News)Buy Photo

Murders. Political corruption. Mobsters. Gambling. Police abuse.

Peter Modafferi, who is retiring June 14, helped investigatethose and many other crimes during his 44 years with the Rockland District Attorney's Office30 of those years as chief of detectives. His 45-year career started in June 1972 as an investigator with the Rockland Public Defender's Office.

Modafferi, 67, raised in Rockland County and married for 31 years to retired teacher Mary Beth Modafferi, also has been a major force behind the maturation of law enforcement in Rockland, such as helping create the Rockland Drug Task Force by obtaining a $125,000 grant in 1973 to rent a building and buy four unmarked cars.

His contacts in federal law enforcementprovided Rockland with millions of dollars in modernized surveillance, connections and credibility. He's testified before Congress on law enforcement issues, including surveillance and homeland security issues.

"If you look at Peter Modafferi, you see someone known nationally in law enforcement who's not always recognized as an influential figure in his local community," Rockland District Attorney Thomas Zugibe said. "Here's a guy who's been involved in every majorinvestigation in the county over four decades. The guy's a visionary. He has been well ahead of his time when it comes to law enforcement changes.

"He's had a lot to say on a national level such as the president's drug policy on law enforcement advancements in the 21st century," Zugibe said.

Modaferri's seen Rockland change from thebucolic community of his youth and younger days as an investigator to a more urban suburbia, but insists the county always had its share of violence and drugs. He's seen law enforcement officers grow in numberand become better equipped and trained,spurred by the murder of two Nyack police officers and a Brinks armored car guard on Oct. 20, 1981.

"It's been a thrill of a lifetime," Modafferi said recently,sitting behind his desk at the DA's Office in New City.His desk is modestly clear of clutter, but police patches,hats andawards are scattered on furniture andwalls.

"It was always what I wanted to do," he said of law enforcement. "It was exciting. Every decade brought something new. "

All cops and prosecutors have horrific memories of violence, as well as dealing with families facing emotional distress, shock and anger.

(Photo: Courtesy of her family )

Two horrific murders of young girls are among the major investigations recalled by Modafferi cases he won't forget:

(Photo: Submitted)

File photo /The Journal News The Clarkstown police Honor Guard presents the colors during the 34th annual Brinks Memorial Service in Nyack on Oct. 20. The Clarkstown police Honor Guard presents the colors during the 34th annual Brinks Memorial Service in Nyack on Oct. 20. The event remembered South Nyack police Sgt. Edward O'Grady and Officer Waverly Brown, and Brinks guard Peter Paige, who were killed in an armored-car robbery in 1981.(Photo: File photo by Peter Carr/The Jou)

Despite Rockland's reputation as a bedroom community, Modaferri said Rockland has long been home to violence, murders, illegal gambling and organized crime figures. He's been involved in establishing units to investigate the mob, gambling, drugs, and political corruption, working closely with the FBI, Drug Enforcement Agency, Department of Homeland Security and the U.S. Attorney's Office.

"Since I started, the population of Rockland County has grown 40 percent," he said of the changing nature of the state's smallest county geographically. Law enforcement has changed with the times, he said.

He recalledthe 1970s and 1980s when Rockland saw 15 to 25 murders annuallymany that went unresolved as "we couldn't prove beyond a reasonable doubt."

Nyack Police Officer Waverly "Chipper" Brown, left, and Sgt. Edward O'Grady were murdered Oct. 20, 1981, at a Nyack roadblock during robbery of a Brinks truck.(Photo: The Journal News/File photo)

"There wasn't DNA back then," Modafferi said. "They did tests on blood to determine the range of possibilities. DNA made it a different world as technology has enhanced law enforcement and investigations today. The technology can help convict or exonerate a suspect."

Organized crime also has a foothold in Rockland. Several major mob figures such as Genovese family captain Daniel Pagano and organized crime-linked gamblers and loan sharks have been arrested and sent to prison over the years. Pagano's father, Joseph Pagano, reputedly ran the region's garbage industry and gambling.

"They are very active in Rockland," Modafferi said, adding recently retired detective William Michella headed investigations into the mob. "I've met them. They are wiseguys. That's what they do for a living. They know we know it. It's a chess game. "

He recalls a lawyer who stole from senior citizens to pay his gambling debts to the mob, saying that alone is proof gambling is not a victimless crime, as many in the public claim.

"Loansharking comes with a price," he said. "It's a vicious cycle."

Aside from helping solve crimes and conducting investigations,Modafferi takes pride that he represented the Rockland District Attorney's Office on national panels and with groups studying crime and modernizing investigative approaches.

He's spent 27 years working with the International Association of Chiefs of Police, chairing its investigative operations committee for years. He's been published in law enforcement magazines and periodicals numerous times. He also chaired the executive advisory board of the National Domestic Communications Assistance Center.

Hetestifiedin 2013 before theHouse Investigations Subcommittee on the use of warrants and probablecause to get personal information on citizens as part of an investigation. He's been quoted on law enforcement issues by newspapers and periodicals nationwide, such as the Washington Post.

His connections with the federal drug councils provided the county Drug Task Force with$2 million worth of surveillance equipment. Rockland got the equipment free and became a test site forfederal drug agencies to determine the effectivenessof the equipment, he said. The Sheriff's Office also got a $400,000 ballistics identification system through his efforts.

"When you get involved in these organizations, the benefits to the county are huge." Modafferi said.

Modafferi's been ahead of the curve on law enforcement needs for decades and his work with the chiefs association has won him respect across the nation, said Col. Steve McCraw of the Texas Department of Public Safety, which includes the Texas Rangers, patrol officers and intelligence-gathering.

"He's clearlyan icon," said McCraw, who met Modafferi decades ago as an FBI agent. "I don't use that word lightly."

McCraw said Modafferi has been a leader on advocating intelligence-based investigations, the use of data, computers, cooperative witnesses, and law enforcement combining resources.

"He hadseen the need for intelligence-gathering before 9-11 and he's seen the impacts of commercial sex trafficking and exploited children," McCraw said, noting the work done by the Rockland District Attorney's Office and other agencies to curb sex trafficking at the recent Super Bowl in New Jersey.

"For some children, theironly chance of being free is an informed patrol officer on human trafficking, and that's something Pete has long advocated," McCraw said.

Modafferi has worked for four district attorneys over his career hired by Robert Meehan and followed by Gribetz, Michael Bongiorno and Zugibe, with whom he has worked since 1981 when Zugibe was an assistant district attorney. Modafferi worked closely with Zugibe's father, the later Dr. Fred Zugibe, a world-renowned forensic pathologist who created the Rockland Medical Examiner's Office.

Retired FBI AgentHilda Kogut also praised Modafferias an advocate forcooperative investigations building bridges to solve crimes.

"Peter is a detailed oriented guy and a really good investigator," she said. "I've always found him to be educated, a real classy guy, very professional and always there to help you."

She said she and the FBI worked with Modafferi and the District Attorney's Office on many cases, including a robbery of a millionaire businessman in Piermont, the murder of a scientist in Pearl River by his wife and her cousin, and the Judaic Studies case, during which millions of dollars in education funds and other social welfare programs were stolen by residents of New Square.

Rockland District Attorney Thomas Zugibe in his New City office April 27, 2017.(Photo: Peter Carr/The Journal News)

Zugibe, who has worked with Modafferi since 1981,described Modafferi's investigative style like Peter Falk's character in "Colombo" intellectual and meticulous.

"He can dig into the most complex cases and come up with a strategy," Zugibe said. "I am talking about white collar cases, not just street crime. Peter has a natural knack. He's going to be missed by my office and the county."

Modafferi graduated from the FBI Academy in June 1983 and always tried to send his office's investigators to the program, where they got training and could make connections that last a lifetime, Kogut said.

"Networking is critical to being a good investigator," Kogut said. "We're a small county. You want people like Pete out there who is a point person to meet the right people so we can get the equipment and financing we really need."

Modafferi said the District Attorney's Office's working relationship with the FBI and U.S. Attorney's Office led to the formation of an anti-corruption task force.He noted that District Attorney's Office detectives provided the FBI with a key undercover operative, Moses Stern of Monsey, whichled to the convictions of officials from Spring Valley and New York City.

He helped spearheadthe office's community prosecution concept and the special victims unit with Lt. Mary Murphy to establish the Spirit of Rockland Special Victims Unit for interviewing and helping sexual abuse survivors on the grounds of Good Samaritan Hospital in Suffern.

His future plans involve working for a national program that delves into human trafficking, a worldwide crime problem.

"Something has to be done about the sexual and laborhuman trafficking of children, women," he said. "Crime doesn't stop. It's just being done differently."

Twitter: @lohudlegal

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Rockland's chief detective retiring after 45 years investigating murders, corruption - The Journal News / Lohud.com

Alleged Yahoo hacker Karim Baratov will stay in jail as he awaits extradition hearing – CBC.ca

Posted on June 9, 2017 by Danzig

An Ontario Court of Appeals judge has dismissed an attemptby alleged Yahoo hacker Karim Baratov to be allowed to wait out a U.S. extradition hearing at home, saying the 22-year-old is a flight risk.

Baratov, 22, who owned a home in an affluent neighbourhood in Ancaster, Ont., will remain behind bars after the court dismissed his application for a review of the detention order Friday. Baratov was arrested in early March and formally denied bail in April.

In his decision Friday, Justice J. A. Miller rejected the argument from Baratov's lawyers that the crimes he's accused ofdidn't hurt anyone.

"Counsel for Mr. Baratov argues that what is alleged against his client is a comparatively minor and victimless crime," he wrote. "It is anything but."

Even unsuccessful hacking attacks undermine public confidence, the judge said.

"The public cost, monetary and psychological, is broad and deep."

The dismissal is disappointing but expected, saidAmedeo Dicarlo, one of Baratov's lawyers.

"The next step is to fight extradition."

Akhmet Tokbergenov, left, and Dinara Tokbergenova, Baratov's parents, leave the court after their son was denied bail, with lawyer Deepak Paradkar. (Mark Blinch/Canadian Press)

Baratov, he added, is doing "fine."

"He is anxious for closure and/or vindication like anyone would be in his position."

At his April bail hearing, Baratov's lawyers argued that he isn't a flight risk, and pointed out that time served in Canada doesn't translate to the U.S. His parents said at the time that they were willing to act as sureties.

The Crown argued that Baratov had lots of money at his disposal and the ability to take shelter in other countries.

Baratov was arrested in March under the Extradition Act after U.S. authorities indicted him and three others two of them allegedly officers of Russia's Federal Security Service for computer hacking, economic espionage and other crimes.

The Yahoo breach affected at least a half billion users, but Baratov is only accused of hacking 80 of them.

Miller agreed that Baratov was a flight risk, and that him staying in jail was required to protectthe public and maintain public confidence in the justice system.

Baratov has an ability to make "substantial income from any location where he can get internet access," the decision said.

"There were no reviewable errors, and no material change," it said. "At the end of the day, Mr. Baratov remains a significant flight risk."

See the rest here:

Alleged Yahoo hacker Karim Baratov will stay in jail as he awaits extradition hearing - CBC.ca

Police hunting rail cable thieves who caused travel disruptions in Sheffield – The Star

Posted on June 9, 2017 by Danzig

Crime.

15:36 Friday 09 June 2017

Police are hunting thieves who attempted to steal railway cables two nights in a row - causing major delays across Sheffield.

Cable was cut on two consecutive nights in locations near to Shireoaks Train Station.

They first struck just before midnight on Thursday, June 1, when rail workers disturbed a group of men on a foot crossing near the station. The men fled but left trailers, bikes and cut cable at the scene.

The following day cable was cut near to Shireoaks Junction at 10.15pm, which affected trains on the Worksop to Sheffield and Worksop to Nottingham lines.

Thieves also targeted the same scene two years ago.

Detective Constable Gavin Buck, of British Transport Police, said: We have launched an investigation being run by a dedicated team of officers. We are also in the process of forensically examining items left by the would-be thieves at the scene.

We are doing all we can to find those responsible, but I would like to urge members of the public to be vigilant and report any information, including suspicious people or vehicles near the railway, which may help us stop such crimes taking place and catch those responsible.

The railway is also an extremely dangerous environment and anyone who risks their lives - while disrupting those of others - by carrying out this sort of crime needs to be found. "

He added: Cable theft is not a victimless crime far from it. Train delays and cancellations directly affect people getting to work, visiting family and travelling to hospital appointments.

Contact British Transport Police on 0800 40 50 40.

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Police hunting rail cable thieves who caused travel disruptions in Sheffield - The Star

Hertfordshire Copp family jailed for 27 years for 45 million payroll tax fraud – Hertfordshire Mercury

Posted on June 9, 2017 by Danzig

A family of fraudsters who pocketed more than 45 million in the largest payroll fraud of its kind in the UK have been jailed for a total of 27-and-a-half years.

Essex Police is also now looking to recover as much of the cash as possible from Geoffrey, Joshua and Andrew Copp, who pocketed money that should have gone to the public purse.

Geoffrey, 55, his son Joshua, 24, and brother Andrew, 51, ran Central Payroll Specialists (CPS), which was later rebranded as Quality Premier Services (QPS), based in Croxley Heath near Rickmansworth.

These were umbrella payroll companies, which were used by recruitment agencies to manage the wages of thousands of temporary workers.

Over the course of three years, the Copps did not pass the VAT they received from the recruitment agencies to HM Revenue and Customs (HMRC).

Instead, they split the cash to fund lavish lifestyles, buying luxury cars, watches and property.

The scam came to light after information was passed to Essex Police, resulting in an investigation led by the Kent and Essex Serious Crime Directorate, with the assistance of HMRC's Criminal Taxes Unit.

Initial enquiries focused on Joshua and police found that during 2013/2014, 2.4million was transferred to his personal bank accounts from CPS, and a further 9.2million was transferred to him from CPS and QPS during 2014/2015.

READ MORE: Man who tried to burgle elderly Rosyton woman while on licence has jail sentence cut

Further investigations by Essex Police and HMRC found the two companies paid just under 4million in VAT between September 2012 and September 2015.

HMRC investigators estimated there was just under 46million in unpaid VAT.

Tax records also showed that Geoffrey and Joshua paid no income tax between 2009 and 2015, while Andrew had paid 15,930.

Warrants were executed at their homes in May and September 2015.

In March 2016 they were each charged with conspiracy to cheat the public revenue and conspiring to conceal, disguise, convert, transfer or remove criminal property.

They stood trial at Wood Green Crown Court on April 4 and were found guilty by a jury on Monday June 5.

The court heard Geoffrey set up the businesses, later taking back seat in the day to day management and passing over that responsibility to Andrew. Joshua, who previously had very little work experience, also played a substantial role in the businesses.

They spent money on houses, expensive cars, jewellery, private jet travel and gambling.

The court heard Geoffrey Copp bought four homes, one in Spain and three in England, mortgage free between 2014 and 2015. Their combined value is 3million.

He spent nearly 300,000 on private jet flights to Spain between July 2014 and January 2015 and owned several racehorses.

When police executed warrants at Joshua's home in Olivers Lane, Stotfold, in May 2015, they found several cars worth 1million overall registered in his name and ten watches with a combined value of about 400,000.

READ MORE: Video shows men pulled out of van in Cheshunt and arrested

Police also found Joshua Copp's receipt for two seats at a Floyd Mayweather v Manny Pacquiao boxing match at the MGM Grand - each seat cost 10,000.

He also had a receipt for a 26,064 bar bill at the Rose club in Marylebone, London, where he left a 4,000 tip.

From February 2014, Andrew Copp bought four homes for 1,395,000 and six cars, including two Lamborghinis and a Bentley Continental.

They were sentenced at Wood Green Crown Court today, Friday, June 9.

Speaking after the hearing, Detective Chief Inspector Josie Hayes, of the Kent and Essex Serious Crime Directorate, said: "This was a sophisticated scam yet all three defendants consistently denied any knowledge that their companies owned such an enormous amount of VAT.

"They saw this money as a windfall to spend as they wished. But this was not a victimless crime.

"The vast sums of cash they spent so freely on their extravagant lifestyles should have gone into paying for public services such as health, welfare and law and order.

"All three were well aware of what they were doing and played a substantial role in this conspiracy.

"Geoffrey set up the payroll companies and the mechanism of the fraud.

"Andrew became the director of QPS during the time when most of the VAT was stolen.

"And Joshua played an administrative role and shared out the proceeds."

READ MORE: Burglars stole elderly woman's jewellery while she was in her back garden

She added: "Now they will all pay for their crimes with time behind bars.

"Essex Police will also begin the process of applying for confiscation orders under the Proceeds of Crime Act to recover the cash that should rightfully have gone into the public purse, ensuring they do not benefit from their criminality.

"We have already obtained a restraint order for property and money valued at 22million, which 'freezes' property that may be liable to confiscation following a trial and the making of a confiscation order.

"I would like to thank the witnesses who provided evidence during the investigation and trial, and staff at HMRC's Criminal Taxes Unit, with whom we have worked with closely on this complex case."

QPS has been placed into liquidation as a result of a HMRC winding up petition. CPS was also liquidated.

HMRC's Criminal Taxes Unit is working closely with the liquidators in order to maximise recoveries for creditors.

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Hertfordshire Copp family jailed for 27 years for 45 million payroll tax fraud - Hertfordshire Mercury

Pat Grady on Atlas Shrugged, Sleep Deprivation, and Spud Webb – FeedFront Magazine (blog)

Posted on June 9, 2017 by Danzig

Pat Grady, Co-Owner, Founder of RhinoFish Media joined me to chat on my podcast, This is Affiliate Marketing with Shawn Collins.

I wanted to learn more about the real Pat, so I asked him a variety of questions I figured he had not been asked in previous interviews.

Links from this episode

Subscribe to This is Affiliate Marketing with Shawn Collins on iTunes.

If you enjoyed this episode of This is Affiliate Marketing with Shawn Collins, please share it.

This is Affiliate Marketing with Shawn Collins is focused on the people behind the affiliate management/OPM companies, advertisers/merchants, affiliates/publishers, and affiliate networks.

On each episode, Shawn interviews a new guest related to the industry, so you can learn more about the people of affiliate marketing.

After all, affiliate marketing is about the people; not the companies.

Pat Grady on Atlas Shrugged, Sleep Deprivation, and Spud Webb - FeedFront Magazine (blog)

The Fountainhead: New York, New York – Patheos (blog)

Posted on June 9, 2017 by Danzig

The Fountainhead, part 1, chapter 8

Jobless again, Roark goes back to pounding the pavement. He makes a list of architects the ones whose work he resented least and methodically works his way through it, applying to one firm after another. But at each one, he meets with rejection (not surprising considering his interview technique):

It was not a judgment passed upon his merit. They did not think he was worthless. They simply did not care to find out whether he was good. Sometimes, he was asked to show his sketches; he extended them across a desk, feeling a contraction of shame in the muscles of his hand; it was like having the clothes torn off his body, and the shame was not, that his body was exposed, but that it was exposed to indifferent eyes.

Not to be pedantic, but if these architects asked to see his sketches, they did pass judgment on his merit, didnt they?

As the unsuccessful days run together into weeks and then months, Roark sits at his window and smokes. He feels a sense of threat in the air all around him, a nameless sense of hostility rising from the city below, as if each window, each strip of pavement, had set itself closed grimly, in wordless resistance. The text asserts that this doesnt bother him, because hes implacable and emotionless like all Randian protagonists. Nevertheless, it seems the constant rejection takes a toll:

As the summer months passed, as his list was exhausted and he returned again to the places that had refused him once, Roark found that a few things were known about him and he heard the same words spoken bluntly or timidly or angrily or apologetically You were kicked out of Stanton. You were kicked out of Francons office. All the different voices saying it had one note in common: a note of relief in the certainty that the decision had been made for them.

As always, Rands villains know theyre the villains, whether they admit it or not. She writes as if all the other architects are afraid to acknowledge Roarks secret greatness and need a plausible excuse not to hire him.

But these arent excuses! They say something about his basic fitness to be an employee. Roark was expelled from school for refusing assignments and fired from his last job for insubordination. His bad behavior isnt an isolated incident, but a pattern. Thats the best possible reason not to hire someone: because they wont do the job youre paying them for.

If I were the interviewer, to give him even a chance, Id want a very good explanation of what lessons hes learned and what hes going to do differently in the future. But Roark hasnt learned any lessons and wont behave differently in the future, as Im sure he would confirm if anyone asked him.

The only respite Roark has from the long string of rejections is when he visits Henry Cameron, whos convalescing at his retirement home in New Jersey. Cameron again offers to write him a recommendation Want me to give you a letter to one of the bastards? but Roark refuses. Instead, they pass the time sitting on the porch and gazing at the distant skyline of New York:

When Roark came to him, Cameron spoke of architecture with the simple confidence of a private possession. They sat together, looking at the city in the distance, on the edge of the sky, beyond the river. The sky was growing dark and luminous as blue-green glass; the buildings looked like clouds condensed on the glass, gray-blue clouds frozen for an instant in straight angles and vertical shafts, with the sunset caught in the spires

We saw this in Atlas Shrugged as well, this idolizing New York City as a sacred temple of human industry. Its not surprising that Ayn Rand loved the New York skyline; its probably the first sight she ever had of America.

But while she habitually gave her protagonists the same opinions as herself, in this case it doesnt make sense. Why does Roark feel that New York City is deserving of his admiration?

After all, isnt this the city that was built by evil classical architects? Isnt it the city that spurned his mentor Henry Cameron and consigned him to a miserable retirement? Isnt it the city, we were just told, that emanates a sense of implacable hostility toward him and all his works?

Remember, in The Fountainhead, Guy Francons absurdly ornate Frink Building in lower Manhattan is famous and beloved. Its widely considered the best building of the city. Meanwhile, Henry Camerons crowning achievement, the Dana Building, is half-empty and largely ignored (New Yorkers seldom looked at the Dana Building), if not outright hated. And while Francon is the worst of the lot, we just saw that there are no architects still working in New York whom Roark likes or respects. Every last one of them is hopelessly corrupted by classicism.

By their standards, Roark and Cameron should consider New York City a monument to conformity and philistinism. Rather than something to admire while they smoke and reminisce, the sight of its twinkling skyline from Camerons porch should feel like further mockery. Its one more symbol of how the world has rejected them, and like John Galt in Atlas Shrugged, the only pleasure they should derive from it is the thought of how theyll one day erase it from the earth.

The ATRA Golden Rule Warranty Program

Posted on June 9, 2017 by Danzig

The Golden Rule Warranty is a nationwide inter-shop warranty planissued and servicedby authorized ATRA members in good standing. ATRA is the largest network of automatic transmission repair shops in the world, making the Golden Rule warranty the most widely accepted warranty of any chain or franchise. The ATRA Golden Rule warranty is warranted by the original repairing member shop.

The ATRA Golden Rule warranty is offeredunder three terms: 12 months; 24 months and 36 months.

To locate an ATRA Member shop that participates in the ATRA Golden Rule warranty program, use theShop Finder tool. For warranty repairs contact the original shop. ATRA Golden Rule warranties remain valid for the term of the warranty (terms and conditions apply and are listed on the warranty form), provided the original shop is an ATRA member in good standing during the term of the warranty.

If you havea comment about a repair from an ATRA member shop orwork performed on your car then please contact ATRA or submit an online comment form.

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The ATRA Golden Rule Warranty Program

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Monthly Archives: June 2017

For Hartford, bankruptcy not an easy way out – The CT Mirror

Retailer BCBG Unveils Going-Concern Bankruptcy Sales – Wall Street Journal (subscription)

Abengoa Bankruptcy Liquidation Plan Confirmed – Bankrupt Company News (press release) (blog)

15-year Mesothelioma Survivor Living Life By Design – Asbestos.com (blog)

Nuclear war: the US took a highly bureaucratic response to preparing for it – The Australian Financial Review

When is the Left ever Right – WSAU (blog)

‘War on drugs’ is costing thousands of lives Press Enterprise – Press-Enterprise

New war on drugs – Fort Wayne Journal Gazette

Still Don’t Think The War On Drugs Is Racist? Watch This Video – Civilized

How casinos, states are winning big from online gambling – York Dispatch

Insurance Is Gambling, Seriously – Seeking Alpha

Woodstock Moose Lodge could lose license amid illegal gambling probe – Northwest Herald

With Little Notice, PA House Narrowly Moves Massive Gambling Expansion – WVIK

Rockland’s chief detective retiring after 45 years investigating murders, corruption – The Journal News / Lohud.com

Alleged Yahoo hacker Karim Baratov will stay in jail as he awaits extradition hearing – CBC.ca

Police hunting rail cable thieves who caused travel disruptions in Sheffield – The Star

Hertfordshire Copp family jailed for 27 years for 45 million payroll tax fraud – Hertfordshire Mercury

Pat Grady on Atlas Shrugged, Sleep Deprivation, and Spud Webb – FeedFront Magazine (blog)

The Fountainhead: New York, New York – Patheos (blog)

The ATRA Golden Rule Warranty Program