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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.

CAPCO was a economic development program sham politicians in several state fell for and committed their states without seeking advice for unbiased experts. CAPCO quickly turned controversial and was reversed once the program details reached the public. But, not until it cost states like Wisconsin, Florida, Rhode Island, Colorado, Iowa, Nebraska, Louisiana, Hawaii and Oklahoma 100's million each.

Here are some comments coming from experts and state officials from states who finally realized what was actually happening. Oklahoma's program has yet to be exposed because state officials a hiding all information on what the program is costing where the money is going.

State officials have claimed on two occassions, 2004 and 2006 to have closed the loopholes allowing the abuse, however here is one article revealing a September 2007 letter from Capital West Securities seeking $300 million in investments for a Foxborough fund, and promising investor $2 in tax credits for each $1 invested. Accompanied by a second letter describing a quick white wash involving a meaningless investigation by a ???????? state offices that apparently convinced the unwitting.

Sampling of comments made by others describing the same basic program used by Oklahoma
and
hidden from the public.

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.

• The insurance were not investing, but only loaning the money.
• The states were backing the loans, and had to pay back the loans if the businesses were not successful enough to payback the loans.
• The 10% tax credits were only interest on the loans, until the business was successful or failed.
• The CAPCOs were taking as much as 50% of the loan on the front end for its management fee. Leaving the business venture with only 50% of the loan as the investment.
• The CAPCOs got to keep the 50% even if the business ventures failed.
• The CAPCOs got all of the profit if the business was successful.

In summary the taxpayers funded the venture and took all of the risk yet never received one dime of the profit. The CAPCO invest no money, took no risk, was guaranteed a huge profit up front and got all of the profits.

Some folks in Oklahoma used the CACPO scheme and create their own version. If you can imagine, made it even better. Then they got state officials to wrap it in secrecy, to prevent what happened in the other states, the public learning what was going on. These folks were doing so well more wanted in and over time the program, become even better, and better and better.

We will show how the basic Okie scheme is the same as the CAPCO, with even more lucrative angles, and better protection from being discovered. Has now taken over $1 billion

CAPCO

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