Tulsa World Staff Writer Randy Krehbiel, Tulsa (11/8/2009 9:57:23 AM)

Quality Jobs incentives aren't paid until the requirements are met. It also has some "claw-back" provisions, meaning the incentives have to be repaid if the recipient doesn't live up to its promises.

oldrustytulsa, Tulsa (11/8/2009 9:00:27 AM)

wait, we have elected, thats their job to watch for fraud, if they dont vote them out, and get someone who will.

Tony G, Tulsa (11/8/2009 7:14:29 AM)

Can anyone show where these tax credits have benefited Oklahoma?
That is the problem with Republican politics,
no regulations, and no one to enforce those regulations, when they are in place.

Few Clothes, America (11/8/2009 4:11:07 PM)

Thank all of you for the information for all of us to read. My home state keeps getting a deeper bruised black eye.

droopy, wagoner (11/8/2009 7:29:14 AM)

tg, these programs have been in place for 20 years or more. Republicans? Not it 18 of those years.

Moses, Jenks (11/8/2009 8:20:39 AM)

Tony G, you’re starting to sound stupid.
It's not about Republicans or Democrats, its politicians in general.
Power corrupts. If you allow any politician to stay in office too long he/she will be corrupted.

out of tulsa, (11/8/2009 7:11:36 AM)

What about the tax credit for companies that say they will hire like 200 people for jobs in the next few years? They get a payroll tax credit...do they actually have to hire the people? Or, do they just say they will?

out of tulsa, (11/8/2009 7:16:04 AM)

It's called the Quality Jobs program and I know some local companies "qualified" for it but do they actually have to hire the people?

out of tulsa, (11/8/2009 10:10:35 AM)

So, if a company says they will hire 200 people in ten years, do they receive the money during that time? And, if they don't hire the said amount of people, they pay it back? I have noticed local companies meet the requirements but I also know, some of them don't hire the people they say they will. Do they get the payroll tax rebate even though they are not hiring? And, thank you for answearing my question!

out of tulsa, (11/8/2009 1:39:34 PM)

WOW! I know I had read a report issued out of the east coast re Oklahoma's tax incentives and how they are not accomplishing anything but lining the pockets of certain people and shell companies. I believe it now!

Nite Owl, (11/8/2009 12:46:11 PM)

Great article Randy. We have long needed one of our state’s major papers to turn the spot light on these hidden abuses.

Oklahoma has some 50 economic incentive programs, involving payroll or income tax or credits. All are structured and handled in different ways, and often by different agencies or desk. Most people have never heard of more than a few. It is those programs state officials have kept quiet about, a lawmakers voted to keep secret, and few even aware exist is where the fraud is occurring.

Let’s be perfectly clear on just how secret these programs are. No one, not the governor, not legislators, not anyone knows who is receiving how much, for what! The tax commission has been providing false reports to hide what is actually occurring. The document evidence from 3 years of private investigation can be found on prowlingowl com. And, contrary to what we have always thought that our constitution provided a system of checks and balances to protect against wrong; our state officials create these programs to work off the books.

I have recently gone on record publicly, accusing Oklahoma’s Tax Commission Administrator, Tony Mastin, of being the key operative in a massive tax credit fraud scheme. These accusations are based on 3 years of research that includes Mastin allowing false claims and in turn falsely reporting how much the tax credit programs have been costing the state. Examples of what Mastin is trying to cover up.

Mastin has been allowing tax credits to be taken of bogus investments. One was the $643 million in fake loans, Paul Doughty, the president of the recently failed First State Bank Altus issued. $643 million split between: 4 LLC’s belonging to Doughty and his cohort in crime, Don Anderson; The remaining went to two Affinity Ventures LLCs, belonging to Robert McDonald, who at the time was the head of Capital West Securities, an Oklahoma City investment firm. Capital West Securities was a key figure in lobbying behind the scenes for the many little unnoticed amendments that morphed some tax credit programs in to nothing but money trees for a select group, that only Mastin knows who and how much. Some that couldn’t use all of their tax credits would sell the extra to others at a 15 to 50% discount and pocket the money.

Mastin allowed $192 million in unearned tax credits for nothing but $643 million in bogus loans.

Mastin was 3 months late in posting $64 million for 2007 tax credits on Open Books in January 2009. Finally on October 21, 2009, after being rebuffed by state officials and lawmakers, since January, I went public with these accusation. Two days later 2008 tax credit information was posted on time. Hidden in the 2008 information was $168 million in previously withheld 2007 tax credits. A mere $27 million in 2008 tax credits is another case of false reporting.

One week after this failed attempt at trying to cover a past failure to disclosure, another hidden $112 million in 2007 and 2008 tax credits, was uncovered. We still do not know how much, total? The $466 mentioned by Rep Mike Reynolds, the only state official willing to go public, is on the conservative side addressing only what we have uncovered. If $466 mentioned is not enough to get folks attention then nothing else will.

Obviously, there is significantly more supporting evidence, and explanations for the above comments and accusations, than this space allows. Especially when leveling public accusations of fraud at a state official and others, by name; All of the evidence and explanation, over 600 pages, can be found in at prowling owl com.

It is not what we think we know, but what we don’t know, that we don’t know, that is killing us.

Nite Owl, (11/8/2009 2:21:56 PM)

Another important element of this tax credit fraud is revealed in what most would consider one seemingly ticky-tacky issue with the comment by Mark Harter, assistant general counsel of the Oklahoma House of Representatives, But, it makes all the difference in the world in how this is used to falsify the information OTC is posting on Open Books.

Harter’s comment: “LLCs are unique in that the allocation of tax credits among the company's investors does not have to be proportional to the amount each invests.”

That is true, but only addresses LLC’s in general, and how the IRS treats LLCs. In so doing it ignores the issue of disclosing who got how much in public funds. That is what the taxpayers are entitled to know, and the state’s Taxpayer Transparency Act requires. That is what Mastin is failing to disclose.

This is a complicated scheme that would take a couple chapters in a book to explain, and is already addressed on prowlingowl com. In simple terms, those operating the scheme setup multiple LLCs, each with a different investor ownership arrangement, and usually involves different people.

Then the operators shuffle the investments between the different LLCs where they hand out unearned tax credits as profit’s to owners of one LLC, and report the names and amounts paid fund investors in a different LLC on Open Books. In fact, Mastin is further defying the law by misreporting those using the tax credits as oppose to those receiving the tax credits. Many who received the tax credits sell their tax credits for cash and pocket the money. These are the biggest benefactors of the fraud, and the very identities and amounts that the fraud operators do not want the public to learn who is involved.

There is one key element that would expose the whole, thing and the public should storm the capitol on this. That is the secrecy!

Secrecy in state funding is stripping the public of its right to know, and the very thing that begs for fraud in government. Not only does the justification not pass the simplest of common sense thinking, but proves again that those involved in fraud will always have a plausible sounding justification. Never the less, we are burden with so many who maintain that if you ask a crook if they are crooks, and they claim they did nothing wrong, that is ample justification for having a reasonable doubt.

Nick Baker
It is not what we think we know, but what we don’t know, that we don’t know, that is killing us.