Like the 1,000s of other pages of evidence uncovered and descriptions of crimes on this site, this web page is only one part of a massive multi-state entanglement of government corruption and cover-up. See size
Oklahoma adopted a more egregious variation that eliminated the out of state CAPCOs and insurance companies in favor of local acting as CAPCOs. Allowed the local CAPCOs to take and sell tax credits worth 200% of the amount to be invested. Use one-half to fund the investment and the other have as profits disguised as management fees Note: The area of the law addressing the 200% limitations is ambiguous leaving it unclear, what, if anything, is in fact limited to 200%. In addition Oklahoma added a secrecy clause that prevents the public from learning how much and who While the other states make major revisions or shut their programs down after learning they had been taken for $100s million, Oklahoma's is still operating under the cover of state officials guarded secrecy. Program has been improved and is being used for a wider variety of tax evasion schemes. States that adopted the above program and amount scammed before they learned and acted. State officials benefiting? Key media news articles discussing this tax credit abuse scheme. Learn more about the CAPCO scam Solication letter verify loophole was still open in September 2007 - Whitewashing the solication letter. |
||||||||||||
In a nutshell the CAPCO group was described as venture funding managers who had insurance companies willing to provide financing for new business in states that would give the insurance companies 10% tax credits. The unfortunate assumption or misunderstanding was the state was taking no risks yet would benefit from new business growth. Once the program got rolling some folks started examining exactly how the program worked. Here is what they found.
|
Comparing economic development programs | |||
Program |
Traditional Venture Capitalist |
Capco Other states |
Oklahoma's Program |
Who | |||
Who provides funding | Investors | Lenders | Taxpayers |
Who assumes the risks | Investors | Taxpayers | Taxpayers |
Who gets any Profits | Investors | Capco | Capco |
Comments on Oklahoma's sister scams
"It's a scam," said Colorado state Treasurer Mike Coffman.(1) |
66% skimmed for profits. Leaving only 34% going to the intended purpose. A state study in Missouri. (1) |
"It's a crummy deal for the taxpayers," said Julia Sass Rubin, a Rutgers University professor of public policy. (1) |
The CAPCO program is fatally flawed. Daniel Sandler, Faculty at Law, University of Western Ontario. (2) |
"We don't know who is getting the credits, what they're doing, or how much money they're getting." Paul Brewbaker Chief economist at the Bank of Hawaii.(3) |
"Expensive and inefficient" A study commissioned by the state of Louisiana. (1) |
"I think this state would be hard pressed to design a program that cost the taxpayers more and delivered less" Bob Lee, the head of Colorado's Office of Economic Development. (4) |
"They're feeding at the public trough." Lowell Kalapa, president of the nonprofit Tax Foundation of Hawai'i. (3) |
There is nothing to prevent a company which meets the requirement for the funding in Colorado from using that money to leave the state and build elsewhere. Rocky Mountain News. (4) |