Jackson Free Press

In its Sunday edition, The New York Times is reporting that New York Attorney General Eric Schneiderman is investigating several private equity firms, including Bain Capital for possibly abusing a tax strategy "in order to slice hundreds of millions of dollars from their tax bills."

The attorney general, Eric T. Schneiderman, has in recent weeks subpoenaed more than a dozen firms seeking documents that would reveal whether they converted certain management fees collected from their investors into fund investments, which are taxed at a far lower rate than ordinary income.

Among the firms to receive subpoenas are Kohlberg Kravis Roberts & Company, TPG Capital, Sun Capital Partners, Apollo Global Management, Silver Lake Partners and Bain Capital, which was founded by Mitt Romney, the Republican nominee for president. Representatives for the firms declined to comment on the inquiry.

Mr. Schneiderman’s investigation will intensify scrutiny of an industry already bruised by the campaign season, as President Obama and the Democrats have sought to depict Mr. Romney through his long career in private equity as a businessman who dismantled companies and laid off workers while amassing a personal fortune estimated at $250 million.

The subpoenas, by a Democrat, went out before a huge document leak recently that raised questions about Bain Capital's practices:

The tax strategy — which is viewed as perfectly legal by some tax experts, aggressive by others and potentially illegal by some — came to light last month when hundreds of pages of Bain’s internal financial documents were made available online. The financial statements show that at least $1 billion in accumulated fees that otherwise would have been taxed as ordinary income for Bain executives had been converted into investments producing capital gains, which are subject to a federal tax of 15 percent, versus a top rate of 35 percent for ordinary income. That means the Bain partners saved more than $200 million in federal income taxes and more than $20 million in Medicare taxes.

The subpoenas, which executives said were issued in July, predated the leak of the Bain documents by several weeks and do not appear to be connected with them. Mr. Schneiderman, who is also co-chairman of a mortgage fraud task force appointed by Mr. Obama, has made cracking down on large-scale tax evasion a priority of his first term.

As a retired partner, Mr. Romney continues to receive profits from Bain Capital and has had investments in some of the funds that documents show used the tax strategy.

Be sure to read the entire article for a succinct explanation about the fees/interest practices of many financial firms. This ends the piece:

The leaked documents show that Bain has in recent years waived management fees in at least eight private equity and other funds, including one formed as early as January 2002. The documents stated that Bain executives had the right to decide either annually or each quarter whether to waive some or all of their management fees; they also had …

Bill Walker, the former executive director of the Mississippi Department of Marine Resources, and nine other people have been indicted on state and federal charges related to an ongoing investigation into the state agency's spending.

State Auditor Stacey Pickering issued the following statement:

GULFPORT, Miss.- Federal and state grand juries returned indictments this week following a joint investigation into the activities of the Mississippi Department of Marine Resources (“DMR”) and a $3 million grant issued to the City of D’Iberville, announced U.S. Attorney Gregory K. Davis, FBI Special Agent in Charge Daniel McMullen, Mississippi State Auditor Stacey Pickering, Second Circuit District Attorney Joel Smith and Nineteenth Circuit District Attorney Tony Lawrence. The State Auditor’s Office also issued civil demands totaling more than $1 million.

William W. Walker, 68, of Ocean Springs, Scott J. Walker, 34, of Ocean Springs, Sheila Tina Shumate, 52, of Saucier, and Joseph C. Zeigler, Jr., 66, of Gulfport, have been named in a five-count federal indictment, returned on Tuesday, November 5, 2013, charging conspiracy to commit federal program fraud, federal program fraud, conspiracy to commit mail fraud and mail fraud involving DMR and the Mississippi Marine Resources Foundation.

Scott J. Walker is also named in a separate federal indictment along with Michael Janus, age 47, of Biloxi, charging conspiracy to commit program fraud, program fraud, bribery in connection with a federal program and money laundering. The indictment alleges that Walker and Janus caused a false invoice in the amount of $180,000 to be submitted to the City of D’Iberville for payment of consulting services.

A Harrison County grand jury returned indictments this week against Sheila Tina Shumate, Leslie Young Gollott, Susan Perkins, Jere Grant Larsen, Jr. and Kerwin Cuevas for multiple counts of fraud and embezzlement which allegedly occurred during their employment with the Department of Marine Resources.

In addition, the Mississippi State Auditor’s Office issued demands against ten individuals as part of this investigation totaling $1,022,308.55. The individual demands are listed below:

William Walker- $362,689.14 Joseph Ziegler- $258,268.75 Sheila Shumate- $127,608.57 Leslie Gollott- $117,593.10 Susan Perkins- $ 30,959.34 Grant Larson- $1,342.08 Kerwin Cuevas- $108,420.70 Walter Chataginer- $1,279.85 Kerry Endris- $13,020.66 Samantha Hebert- $1,126.36 “The indictments and demands announced today are one step toward restoring the trust of taxpayers, but they do not close the investigation,” State Auditor Stacey Pickering said. “As alleged in the indictments, these men and women abused their positions, stole from the taxpayers of Mississippi, and they will be held accountable for their actions. I appreciate the hard work and cooperation from the local, state and federal agencies involved including our Special Agents, District Attorneys Joel Smith and Tony Lawrence, Gregory Davis, U.S. Attorney for the Southern District, and Daniel McMullen, Special Agent in Charge for the Federal Bureau of Investigation.”

The public is reminded that an indictment is an allegation that a defendant has committed a crime. All defendants are presumed innocent until and unless proven guilty.

I received this stunning letter a couple days ago from a (white, I think) man in Pearl, presumably in response to my recent column about the abominable Mississippi state flag. I post it now without comment but will be back along with some thoughts later. Here it is, verbatim:

Please permit me to submit the following letter to Jackson Free Press:

Some of us have heard the question "What happens when an unstoppable force hits an immovable object?" The puzzle might seem a bit superficial until one notices we have a similar problem concerning our state flag.

I think the JFP has well demonstrated that the Confederate emblem on the Mississippi flag continues to cause hurtful memories to blacks who have endured the horrors of segregation and the Civil Rights era.

So why would so many Mississippians continue to resist changing such a hated symbol of our state's dark past? Ignorance? Bigotry? Could there still be some unspoken reason why many white southerners insist on keeping our flag in its current form?

Hey. We want progress. So let's just go ahead and bring it out in the open.

Just as the current Confederate emblem causes hurtful memories to our state's blacks, the absence of the symbol would cause hurtful memories to many white southerners. And I do not mean just segregationists.

To many whites, the erasure of the Confederate emblem would be an unreciprocated nod to the kind of blacks who attempted, and in some cases, DID seize control of Jackson's schools by force, who pulled knives on white students and threatened them with violence, who stole my brother's school books and urged him to steal from my parents to get money to get his books back.

The erasure would be seen as a nod to "gangsta rap" stars who record songs saturated with sexualized slang and glorify abusing women. It would be seen as a nod to people who have petitioned the NBA to declassify the use of the "MF" word as a technical foul because it is part of "black culture."

To be blunt, there are some facets of "black culture" many of us do not want in Mississippi culture. THAT is what some Mississippi southerners are afraid of.

Though voters decided by referendum to keep our current flag, one can argue that we must have a system in place to protect people from a tyranny of the majority. But there is a bit of a corollary to that here.

If Mississippi blacks are a minority, there is a tiny minority to THAT minority. There are some blacks who want to keep our current flag. Some support groups like the Sons of Confederate Veterans because they are proud to be the descendants of black soldiers who fought for the CSA. Should not their rights be considered too?

But my position is not based entirely on fairness. Perhaps we should lose the current flag.

But that is not going to happen until we have answered the …

The Florida League of Women Voters released the following verbatim news release Tuesday, May 27, 2014 in regard to a recently-completed study on charter schools across the state.

League of Women Voters Releases State-Wide Study on School Choice

Tallahassee, Fla — Twenty percent of the state's charter schools close because of financial mismanagement or poor academic standards, according to the League of Women Voters of Florida after a year-long study of charter schools in 28 Florida counties.

"Charter schools could fill a niche in Florida's educational spectrum, but for many, their biggest contribution may be to corporate bottom lines," said Deirdre Macnab, President of the League of Women Voters of Florida.

With over 576 charter schools in the state, the League of Women Voters of Florida conducted a study in order to better understand the oversight, management, accountability and transparency of charter and private schools in Florida.

The study found that:

Approximately one-third of charters are run by for-profit management companies. Many screen students, then drop those who are not successful, which public schools are prohibited from doing. Charters also serve particular socio-economic groups, increasing segregation in schools.

Although charters tend to be smaller than traditional schools, there is no consistent difference in achievement for charter school and public school students.

Many charters blur the distinction between religious and non-secular schools. Some churches receive as much as a million dollars in lease payments annually for their facilities from charter schools.

In areas with declining enrollments, neither the charters nor regular public schools are large enough to adequately provide support for staff like nurses or counselors. Retaining teachers is also a problem; most charters offer lower salaries and benefits than public schools.

The League's study produced several recommendations:

Charters should be limited to those that fill unmet needs in identified local school districts.

Stronger local management oversight and disclosure policies are needed.

Financial mismanagement issues must be addressed, as too often the privatization of schools leads to financial abuse.

For more information, including further findings and recommendations, please see the state-wide study, along with the individual studies conducted by eighteen local Leagues across Florida.

The League of Women Voters of Florida, a nonpartisan political organization, encourages informed and active participation in government, works to increase understanding of major public policy issues, and influences public policy through education and advocacy. For more information, please visit the League's website at: http://www.TheFloridaVoter.org.

FLORIDA LEGISLATORS WITH A DIRECT INTEREST IN CHARTER SCHOOLS:

Conflict of Interest Concerns

Senator John Legg Chair of Senate Education Committee is co-founder and business administrator of Daysprings Academy in Port Richey.

Senator Kelli Stargel from Orange County is on board of McKeel Academies. She is on the Education Committee and sponsored the Parent Trigger Bill.

House Budget Chairman Seth McKeel is on the board of McKeel Academy Schools in Polk County.

Anne Corcoran, wife of future House Speaker Richard Corcoran has a charter school in Pasco County. Richard Corcoran is Chair of the House Appropriations Committee.

Senator Anitere Flores …