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FDIC seized First State Bank Altus, OK, which uncovered $643 million in fake counterfeit loans, the president of bank used to inflate investment claims. One loan was $189 million the president used to add to the $32 million invested in Quartz Mountain Aerospace, and claim $221 million was invested, and received $66 million in tax credits. View more
John Daniel the president of QMA issued a letter exposing how the scam worked, and verifying only $32 million was invested. View more
Beneficiaries contributed to lawmaker
The Oklahoman, April 21, 2006
By Randy Ellis, Contributing Nolan Clay
Altus residents who have benefited from a loophole in a controversial tax credit program have contributed $21,900 to state Rep. Kevin Calveys campaign for U.S. Congress.
As chairman of the House Revenue and Taxation Committee, Calvey is in a unique position to influence the content of legislation being crafted to close the loophole.
"We are going to fix whatever problems there are with the tax credit program," Calvey vowed Thursday.
Calvey said Paul Doughty, one of the Altus contributors, talked to him about the loophole and said he would support efforts to close it.
"He (Doughty) did express concern that there were some legitimate programs going on and he didnt want them to be thrown out with the bad ones," said Calvey, R-Del City.
F. Don Anderson, Paul Doughty and his wife, Jane, each contributed $6,300, three times the maximum amount allowed by law - to Calveys congressional campaign. Paul Doughty is president of First State Bank of Altus and president of Oklahoma Industrial Venture Management Co., a limited liability company that profits from putting tax credit deals together and managing their investments.
Altus businessman F. Don Anderson, executive vice president of Oklahoma Industrial Venture Management Co., also contributed the maximum of $6,300.
Contributions of $1,500 each were given by Lee Doughty, who is Paul Doughtys cousin, and Larry McLaughlin. Both Altus men are bankers with First State Bank of Altus, records indicate.
Robert O. McDonald, chief executive of Capital West Securities of Oklahoma City, gave $250 to Calveys campaign. Capital West has been marketing the sale of investment units in an Altus airplane manufacturing plant that utilizes tax credits as part of its financing.
All the contributions were given in March, when tax credit legislation was pending before Calveys committee. Altus is not in Calveys House or congressional district.
Anderson and Paul Doughty said their contributions werent aimed at influencing tax credit legislation. "I think its real important that we get a Republican in Congress," Anderson said.
Anderson said he financially supports conservative candidates who are interested in economic development and who understand what it takes to bring economic development to rural areas.
Paul Doughty told The Associated Press he uses similar criteria in determining what candidates to support.
Tax credit financing for the Quartz Mountain Aerospace project in Altus has been controversial because wealthy investors have been told they can obtain $2 in state tax credits for every $1 invested.
The law says investors only are supposed to get 30 cents in tax credits for every $1 invested, but tax attorneys have figured out a loophole that allows companies to take out bank loans for projects and use the borrowed money in calculations to boost the amount of tax credits granted to individual investors.
Calvey said the Legislature tried to close the loophole last year by eliminating borrowed money from tax credit calculations, but tax attorneys figured out a way to circumvent the prohibition using limited liability companies.
There now is some debate about whether borrowed money should be permitted in tax credit calculations when the borrowed money actually goes into the project and is not just used to artificially boost the value of tax credits, Calvey said.
Calvey said he is relying on the Tax Commission to determine what is best for the state.