Where is the Money Going?
Labeled “Losers” by Romney and Palin, Tesla Motors Pays off Government Loan 5 Years Early
According to Elon Musk, Tesla’s co-founder, the company had another five years to pay the government back (while the Energy Department claimed the number was actually nine years). Instead, it fully paid off the debt this month, thanks to a surge in its stock price. "Having accepted taxpayer money, I thought we had an obligation to repay it as soon as we reasonably could," Musk told The Wall Street Journal, “If economics were the only consideration, we would not have done this.” read more
Oakland Redevelopment “Gimmick” Fails; City Pays State $32 Million
When Governor Jerry Brown led the charge to kill the state’s 400 redevelopment agencies in 2011, cities, counties and other entities scrambled to avoid transferring the assets to the state, as required by law.
Oakland, already in financial crisis from the crash of 2008, looked to ease its $58 million deficit by selling eight properties, including the Henry J. Kaiser Convention Center, to its own redevelopment agency for $32 million despite warnings that the strategy was illegal. read more
California-Based Apple Uses Irish Subsidiary to Dodge Billions in Taxes
Using a web of overseas subsidiaries, particularly in Ireland, Apple went beyond the common multi-national corporation practice of stashing money in low-tax offshore havens to obtain, in the words of Senator Levin, “the Holy Grail of tax avoidance.”
“It has created offshore entities holding tens of billions of dollars while claiming to be tax resident nowhere,” he said. read more
A Triple Dose of Bad News for Unemployed Workers
Extended benefits for more than 1 million recipients have run out, those still getting benefits are seeing their checks slashed and customer service hours are about to be whacked.
The cuts are a combination of sequester slashing and already existing administrative underfunding by the federal government.
read more
California Veterans Need Help, but Not the $1.1 Billion Designated for Home Loans
Other financial institutions offer better deals. Only 1,300 loans were issued in 2003, a miniscule 83 in 2012 and 59 so far this year.
Altogether, around $1.1 billion in bonds sits untouched while veterans go begging for other assistance. Activists have long agitated for more job training, mental health counseling and other services. read more
35 Years after Prop. 13 Passage, Critics Decry Its Windfall Business Loophole
Commercial property owners have known about the loophole for years, but it didn’t get much publicity until the Los Angeles Times wrote about the sweet deal billionaire Michael Dell received in 2006 when he purchased the Fairmont Miramar Hotel in Santa Monica. By including his wife and two investment advisors as partners, the deal avoided having a majority owner, which would have triggered a reassessment under Prop. 13. read more
Hospitals Forced to Reveal Their Most Privileged Information: The Cost of Care
Last week, the Obama administration unveiled a database that lets consumers see the vast cost disparities, locally and nationally, between hospitals for common inpatient procedures. The database covers 3,300 U.S. hospitals and the top 100 procedures and treatments in 2011, but does not factor in quality of care. read more
Sacramento Uses Taxpayer Subsidies in Battle to Keep Its NBA Basketball Team
What seemed like a slam dunk for Seattle a few months ago—when the Kings’ owner, the Maloof family, signed a relocation deal with a group in that city—has become far more competitive in recent weeks. Sacramento Mayor Kevin Johnson, a former NBA player himself, led the comeback effort that has, as the usual centerpiece in franchise fights, an offer to pony up taxpayer support for a new arena. read more
Proposed $2.25 Billion PG&E Penalty for San Bruno Blast Decried as Too Big and Too Small
San Bruno officials want PG&E to spend $1 billion on system improvements and pay a $1.2 billion fine to the state General Fund that makes it clear that the penalty for screwing up a job isn’t that you get to do it again.
PG&E says it has already done enough. read more
Wells Fargo “Denies All Allegations” but Pays $105 Million in Medical Capital Holdings Fraud Case
Wells Fargo was one of two bank trustees with fiduciary responsibilities to look out for investor interests. The other was Bank of New York Mellon Corp., which agreed in February to pony up $114 million. Investors lost around half of their $2.2 billion, according to Investment News, in what the court-appointed receiver called a “Ponzi-like scheme.” read more
State May Close “Walmart Loophole” that Lets Big Employers Shift Workers to Medi-Cal
Walmart, which has a healthcare program for full-time employees, actively manages employee schedules to limit how many can take advantage of it. The result is that taxpayers foot the healthcare bill for many of the employees, rather than the business which, in this case, had revenues of $447 billion in 2011 and is the world’s largest private employer. read more
Despite Cutbacks, No Big State Prison System Medicates Inmates Like California
California spent $144.5 million on prison pharmaceuticals in 2012, and about 19% of that money went for anti-psychotic drugs, according to the AP. That’s actually a big drop from 2008 when 34% of all prison prescriptions went for anti-psychotics, and 2009-11 when the figure was 26%.
At the same time California prisons were spending 26% of its prison drug money on anti-psychotics, New York was laying out 17%, Texas 6% and Florida 3%, the AP reported. read more
San Diego Mortgage Broker Pleads Guilty in $100 Million Scam
Armstrong and company made their living by: creating false loan applications to be submitted by “straw buyers” who were each paid $10,000; fabricating documents like W-2 forms and bank statements; securing the mortgages using 100% financing to avoid making a down payment; inflating the price of the real estate by $100,000 or more; and having the fake investors default on the loans and kick back the proceeds to them. read more
Questionable BofA Bay Area Foreclosure Practices Haven’t Changed
One year after attorneys general in 49 states settled for with the big banks $25 billion over questionable foreclosure practices, it doesn’t appear much has changed, according to a joint investigation by NBC Bay Area and the Center for Investigative Reporting (CIR).
Twenty-five percent of the 184,000 Bay Area mortgages were in default status for more than three years, about three times as long as the state average. They were mostly serviced by ReconTrust. read more
Newspapers Retreat Behind Paywalls in Search of a Business Model that Works
Debates still rage over: the prospect that newspapers are dinosaurs on the verge of extinction; whether paywalls are destroying journalism; the impact of the Internet on news gathering; the ability of newspapers to innovate; the relative success of various paywall ventures; and the future of paid online subscriptions.
But unless you subscribe to an online newspaper, you probably won’t read about the controversy from them. read more
Fewer Californians Get Employer Health Benefits, and Pay More for Them
A survey by the California Healthcare Foundation found that health insurance premiums have increased five times as fast as inflation where businesses offer insurance, while the number of employers who offer coverage has declined from 71% in 2002 to 60% last year. Premiums in California rose 169.7% since 2002, while inflation in the state increased 31.5%. read more