Cafaro v. Mahoning County

Once again Mahoning County leaps to the forefront of corruption. It seems that over the past 20 years, Mahoning County has been at the center of one corruption investigation after another. Just when you start think the pit has been cleaned out, here comes another wave.

Now we are at the center of another scandal as indictments were issued against a county commissioner, the county auditor, a local lawyer, a former county treasurer, and Anthony and Flora Cafaro, who are among the most prominent of families in the Mahoning Valley. The indictments center around the purchase of the Southside Hospital by Mahoning County. The primary goal was to do some consolidation of county offices, but mostly to move the Family Services Department from the McGuffey Mall, owned by the Cafaro Company, to the new facility.

At the center of the controversy was the lease between the county and Cafaro for the McGuffey Mall facility, requiring the county to repair the leased premises. My understanding was the lease was a triple net lease, requiring the county to do the repair work when they vacated the premises. A lawsuit followed, and the county ended up having to pay for the work required under the lease.

A political brouhaha developed around the purchase of the old hospital facility, renovated previously under a public/private partnership that went belly up. Sides were drawn up between those who wanted to purchase the facility, and those who wanted to continue to lease the existing premises at the McGuffey Mall. The Cafaro’s, over the years, made campaign donations to those opposing the move which tied into a political fight to control the local Democratic Party…somehow. I can’t figure it out.

Here is what I do know. The Cafaro family has been a prominent and an extremely philanthropic family in the area for as long as I can remember. We owe them a lot. The headquarters was kept within the City of Youngstown helping its tax base. Its real estate holdings in Mahoning and Trumbull County help support our schools and roads. They have been major backers and source of funds for Youngstown State University. The Cafaro family has always made political contributions to just about every candidate running for office at every level of government. There is nothing new here.

The indictment was non-specific…and it appears to me that something else is in play here. I just don’t know what…yet. I do know that on its face this appears to be an effort to criminalize normal political behavior. People can have differing opinions, even among our elected officials, as to the wisdom of various government financial decisions.

Was the original lease bad for the county? Yes...but the county signed it years ago, and it was reviewed and held up for public comment. Could the Cafaro’s have met with local public officials regarding continuing a $500,000.00/year lease for Family Services at the McGuffey Mall? Of course, they run a business! It is also possible the public officials involved could buy the Cafaro argument and conclude that the purchase of that monster building on Oak Hill would be a financial boondoggle, which it may turn out to be as the assumed figures of the purchase proponents are starting to look a tad iffy. Does that mean the Cafaro’s and the public officials broke any laws or the public trust? NO!

Unless they are able to prove that there was some quid pro quo between the Cafaro’s and public officials; unless they are able to prove the public officials did something illegal in support of the Cafaro position; unless they can show there was intentional fudging of proposal numbers and manipulation of county funds…what we really have here are two factions within the local Democratic Party fighting among themselves using the legal proceedings as a club.

I read the lease which was the seed of the dispute. Let’s just say I am willing to keep a very open mind on who is doing what to whom on this one. Time will tell.

2011 Tax Hikes

A friend of mine sent this to me. It was written six months ago. Some of what is included here has been resolved...but much of it has not. So much for no middle class tax hikes.

In just six months, the largest tax hikes in the history of America will take effect.

They will hit families and small business in three great waves on January 1, 2011.

First Waive:
Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These tax cuts are all scheduled to expire on January 1, 2011:

Personal income tax rates will rise.

The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed).

Itemized deductions and personal exemptions will be phased out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%

Higher taxes on marriage and family.

The child tax credit will be cut in half from $1,000 to $500 per child.

The standard deduction will no longer be doubled for married couples relative to the single level.

The dependent care and adoption tax credits will be cut.

The return of the Death Tax. This year, there is no death tax.

For those dying on or after January 1, 2011, there is a 55 percent top death tax rate.

Higher tax rates on RETIREES, Savers and Investors.

The capital gains tax on investment income will rise from 15 percent this year to 20 percent in 2011.

The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. A WHOPPING 260% INCREASE!
These rates will rise another 3.8 percent in 2013.

Second Wave:
Obamacare
There are over twenty new or higher taxes in Obamacare.

Several will first go into effect on January 1, 2011. They include:

The Medicine Cabinet Tax:
Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

The Special Needs Kids Tax:

This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2,500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States and many of them use FSAs to pay for special needs education. Under tax rules, FSA dollars cannot be used to pay for this type of special needs education.

The HSA Withdrawal Tax Hike:
This provision of Obamacare increase the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent.

Third Wave:
The Alternative Minimum Tax and Employer Tax Hikes.

When Americans prepare to file their tax returns in January of 2011, they will be in for a nasty surprise: many AMT tax relief provisions will have expired. The major items include:

The AMT will not apply to over 28 million families, up from 4 million last year.
These families will have to pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.

Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or depreciate) equipment purchases up to $250,000.

This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be depreciated.


Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the research and experimentation tax credit, but there are many, many others. Combing high marginal tax rates with the loss of this tax relief will cost jobs.

Tax Benefits for Education and Teaching Reduced.
The deduction for tuition and fees will not be available.

Tax credits for education will be limited.

Teachers will no longer be able to deduct classroom expenses.

Education Savings Accounts will be cut.

Employer-provided educational assistance is curtailed.

The student loan interest deduction will be disallowed for hundreds of thousands of families.

Charitable Contributions from IRAs are no longer allowed.
Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual required minimum distribution. This ability will no longer be there.

PDF Version Read more: http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171##ixzz0sY8waPq1

Now your insurance is INCOME on your W2:
One of the surprises we will find come next year, is what follows - - - a little “surprise” that 99% of us had no idea was included in the “new and improved” healthcare legislation.

Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company.

You will now be required to pay taxes on a large sum of money that you have never seen.

Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your Tax debt. That’s what you’ll pay next year. For many, it also puts you into a new higher bracket so it’s even worse.

This is how the government is going to buy insurance for the 15% that don’t have insurance and it’s only part of the tax increases.

Two Proposals to Solve What Ails our Political System

It’s time to put an end to the madness that has become our election system. Americans shouldn't have to make Draconian decisions between an extreme candidate on the left and another extreme candidate on the right. As both parties become more and more polarized, that is exactly what is happening. The result is the mess that we have seen reaching epic proportions over the past 20 years. There are two solutions to the problem. Either would help…both would better.

1) Term limits for members of Congress. Six terms is enough for any member of the House of Representatives…that equals twelve years. As for the Senate, the time to go should clock out after three terms…that equals 18 years. I didn’t vote for Robert Byrd (they had to carry him out on a stretcher). I didn’t vote for Charlie Rangle (it will take the jaws of life to pull him out of there notwithstanding the massive corruption charges). I didn’t vote for Nancy Pelosi (this whackadoodle will be there until the Second Coming). These folks, and their conservative counterparts, yield almost limitless power not because of ideas or electoral will, but because they are elected from safe districts. Many of these districts are designed to promote their tenure. Look at Barney Frank! The nut was involved in a sex ring with male House pages, and he is still there. If two terms is enough for President of the United of States…term limits should apply to all members of Congress. The states would have to call for a Constitutional Convention to do this. Who wants to lead the fight?

2) Elimination of partisan primaries for members of Congress. This can be done from within the states. The concept is simple. The political parties have become excessively radicalized. Therefore, in the primaries, you can bet your bottom dollar (if you still have one) that the nominee will be reflect the most radical elements of the party because those are the ones who show up to vote in primaries. I am not calling for open primaries, where anyone can “crossover” to another party to vote in the other party’s primary. Rather all of the candidates should be lumped into a bunch, and the top two or three winners become the candidates in the general election. They can maintain their party affiliations, but the top two vote getters get to go on to the general election. If it is two Dems…or two Republicans…so be it. What it will do is force the radical elements to the center…and boy do we need the center.

Those with vested interests in the current system will make all sorts of arguments against the what I am proposing. My favorite is why should we be forced to change Congressman if he/she is doing a good job? My answer: find someone else who will do a good job. Or how about we will never attract good people if they know they have to quit after so many years. Really? Look who we’ve got now. I say move ‘em in, and move ‘em out!

Some states are already moving to Proposal Number 2, non-partisan primaries. The State of Washington has this sytem, and California just adopted it this past June. Louisiana has operated with a non-partisan primary system for years. Oregon is also considering it. While critics say that it hasn’t had the moderating affect it promised, it certainly broadens the field and makes the fringe a little less “fringy.” Surely it couldn't get any worse. Lawsuits to follow in California.

There is nothing in our Constitution that provides for a two party system, or for two party primary elections. In fact, only one of the two parties we have now goes clear back to the founders…that is the Democratic Party. The Republicans go back to Lincoln. But the horse and buggy has been left in the past…maybe it’s time to do the same thing with partisan primaries. I’m just sayin.

Let Them Eat Cake

Where did you go on vacation this year? I had enough money to get me to Sebring. Oh well, at least I can say I went south!!!

The nation continues to spin out of control. I never thought it was possible, but right now I am living in an alternative universe where black is white, hot is cold, and the truth is lost in maze of political speak, spin, and pundits. No wonder there is such discontent in the country.

Let’s start with Michelle Obama’s to Spain. Minimally, in a time of austerity, using taxpayer dollars for an extravagant personal vacation trip taking over half of a five star resort…what are these people thinking? That is 60 – 70 rooms upwards of $2500.00/room/night plus. Some of this is being funded personally by the Obama’s, who must be doing much better than you and me; but there are always public expenses. For example: the seventy secret agents that are accompanying her. Then we she gets back…she will go to her New England vacation after going to her Florida vacation. Might I suggest a weekend here in Youngstown, Ohio. Much to do and see…and a hell of a lot cheaper than Spain! What did you say she is doing there again?

Then we have the Obama administration suing Arizona over the illegal issue. Wouldn’t it be better to help the issue rather than waste government money suing “We, the People?” Do these folks purposely want to hurt us? Congressman Pete Stark answered the question this past week. He said the federal government can do anything it wants. Really?

In the first of many court skirmishes over health care, a Federal judge in Virginia, in an exquisite and detailed opinion, said the Virginia can sue the Feds over the mandatory purchase of health care provisions in the Obamacare bill. Remember…the Obama administration told you and me that this wasn’t a tax, until they got into court. The main defense being used by the Obama administration is that the mandatory purchase provisions are a tax. There is a reason they are arguing that…they and I and just about every constitutional law scholar knows the current Supreme Court will eventually rule the mandatory purchase provision does not fall under the Commerce Clause. So the government must say it is tax. Is it…or isn’t it? Only the Shadow knows.

Racial tensions like I haven’t seen in years are boiling just under the surface. Violence is increasing. Fear is increasing. Unemployment is increasing. Businesses are refusing to expand in light of draconian government regulations. The leftists are doing what they always do, in office our out, they are suing us. Unbelievable.

But the Obama’s party on! The New York Daily News compared Michelle to Marie Antoinette. Works for me! Let them eat cake! Vive La Revolution! Wait…do they have cake in Spain?

Finreg...Huh?

This past week Congress passed the most sweeping financial regulatory reform since the 1930’s. Because I tend to be a tad verbose in my opinions, numerous folks have asked me what I thought about “finreg” (shorthand designation for financial regulations). Given that I have a hard time balancing a checkbook, I quote Sergeant Shultz with an emphatic “I know nothing…I hear nothing!”

That being said, here is what I know. In September of 2008, the world financial system was hours away from total collapse. There literally was a run on the bank. Not from ordinary people, but from other banks that scrambled to cover all of those ingenious collateralized instruments in their portfolios as the weight of debt collapsed the system. It was scary. What was even more disconcerting was the lack of understanding of the problem by many of our national leaders. Notwithstanding, whether in spite of their actions or because of their actions, these folks managed to stop the bleeding and we survived…barely!

There were two roots to the problem. The first was the rescission of the Glass Steagall Act passed in 1933 in response to the Great Depression. This separated retail banks (the ones you and I use) from investment banks (the ones that underwrite stock issues and trade bonds). Bill Clinton repealed this as one of his last acts in office. In fairness to Clinton, he repealed it because it made our financial institution non-competitive with other international banking entities; but it opened up the abuse floodgates to those kinds of instruments that the law was intended to prevent. It only took nine years for the poison to kill the system.

The second were abuses at Fannie Mae and Freddie Mac in the issuing and trading of mortgages to folks who couldn’t afford them. This was a direct result of governmental policy fueled by both parties. Bush believed in an ownership society…and Barney Frank said "Amen" to that. We were off the races as home loans were given to anyone who could almost spell their name and had ten bucks in their pocket.

I am old fashioned. I believe in old fashion values when it comes to modern finance. If you want to buy a home, put 20% down and get a responsible appraisal as to the value of the real estate.

And if a bank issues a mortgage, the bank should carry the paper…not resell it. That way, they will be double sure as to whom they are loaning money.

If you want to buy a credit default swap (an insurance policy insuring a bond), you should have an insurable interest in the bond. I can’t buy a life insurance policy on a stranger betting he is going to die. I shouldn’t be allowed to buy a default policy on a bond owned by stranger hoping there is a default on the bond. It’s the same thing. Buying a life insurance policy on a stranger could hasten the stranger’s death, accidentally that is!! Same with a bond insurance policy. The person holding the policy may try to force a default on the bond to collect the insurance…accidentally that is!! And that's what really happened!!!!

No naked short selling. That means I sell a stock that I don’t own betting I will be able to buy the stock cheaper when I have to actually produce the certificate. It used to be the broker handling the sale would loan stock to people to do this. That still happens, but people now do it with no access to the stock, which causes the stock to fall in price.

Reinstate Glass-Steagall. I don’t want the bank that is giving me my mortgage and holding my money to be selling a CDI or CDS or any other alphabet security to Denmark…putting me, my money, and my home at risk.

Now some of the above sounds simple, and some of the above is complicated for many folks including myself. I will guaranty you this, finreg does nothing to address any of the above issues. So what is in those 2400 pages of new law and regulations? To quote Nancy Pelosi, we simply will have to pass the bill to see what's in it. And I don’t think we are going to like what we see.

The Coming Winter of Our Discontent

This was supposed to be the post partisan President. This was supposed to be the post racial President. Yet Barack Obama has polarized the country in ways not seen since the dark days of Richard Nixon and the Vietnam War. He has opened up racial wounds. He has used thuggery like all leftists do. He is using the courts to sue America’s citizens, like all leftists do. His surrogates are screaming racism in the various tea party movements while the only racist rhetoric I have heard have come from Black Panthers, black ministers, and the NAACP.

He has overwhelmed the system with leftist programs to the point people have stopped watching the news because they are shell shocked. Yet anger is seething beneath the surface, and it will erupt. You can’t govern against the will of the governed for long before there is a reaction. Just ask Richard Nixon.

Will the reaction be violent? Probably not, at least until after the fall election. But if a lame duck leftist Congress tries to ram through an ultra leftist agenda after the election and against the will of the people, I will guarantee you will see citizens storming the Capitol building, perhaps forming human barricades to prevent Congress from voting for any more Christmas Eve surprises like health care last year. America has had enough.

The shame is that real progress had been made in race relations in this country. African Americans, finally given access to the successful path of other immigrant groups, have followed that path through law enforcement, then into local politics, then into state politics, and finally into national politics. The liberal designated “Uncle Tom” blacks like Colin Powell, Clarence Thomas, Condoleezza Rice to name a few, blazed the trail for the first African American President, elected on bringing parties and races together. He fooled us, and fooled us good. His policies have been anything but, and have fostered racial hatred and renewed racial bigotry. He has managed to destroy years of racial progress by appealing to the most radical and extreme of the fringe left and the black community.

What did we think we were getting when we voted for this guy? He was surrounded by radicals and communists. He couldn’t last six months at his job on Wall Street. His sole experience was registering minorities to vote, a noble thing to do, but not sufficient background to President of the United States. While the press crucified Sarah Palin and her family for her lack of experience, they neglected to look at Obama’s lack of experience in anything at all. His reaction to the gulf oil spill is a shiny reflection of that lack of his incompetence.

No he is in danger of losing control of the House in the fall, and possibly the Senate. So rather than slow down and regroup, he has decided to push through his radical agenda on energy and immigration…notice that jobs aren’t in the mix. After all, we don’t need any more white construction jobs. He doesn’t care!!!

Supreme Court Justice Kennedy has taken direct aim at Obama by stating he will not retire until after the next presidential election. In other words, all that stuff Obama has been doing…will be facing that 5 – 4 conservative vote. It’s not nice to diss the Supreme Court in the State of Union Address.

The only remaining question is how much more damage can he do before he is subjected to an education on checks and balances. Not much I hope. On the other hand, if he goes nuts with a shoved through progressive agenda…this winter might be our winter of discontent.

President of the Minorities

It is becoming increasingly clear that Barack Obama has made a choice as to which America he represents as President. As the political heat mounts from more and more questionable policy decisions, he keeps running further to the left for cover. Unfortunately for him, and for the rest of us, the extreme left is never satisfied. Its demands are insatiable. His efforts to placate them will fail as he isolates himself more and more from centrist American politics.

People have criticized Presidents who have governed by polls, and that is probably a just criticism. But Obama actually seems to relish going against the polls. In health care, in immigration policy, in energy policy, in spending policy, in tax policy, in race relations policy…he continues to stick it up the majorities’ posterior. Since he is obviously tone deaf to where America is on the issues, who is he trying to please? And why does he enjoy it so much?

The answer is simple. He is an African colonial ideologue, with no particular allegiance to the United States other than the opportunity to punish it for his perception of America’s misdeeds. He is a minority president who has decided to ignore the class of citizens that have made this country great. His policies and actions have lost all semblance of being centrist. He doesn’t even pretend anymore. If the oil spill kills Louisiana, Mississippi, Alabama and Florida…so be it. They are a bunch of redneck white racists who are getting what they deserve. Those states won't vote for him anyway. And while he is at it, he can destroy the big bad oil companies in the process.

He doesn’t need any additional legislation to secure the borders. He has all he needs. He is choosing not to do it, holding enforcement hostage to “comprehensive immigration reform” which translates to amnesty. If more illegals flood into the country…so be it. That is more people he can give amnesty to, and America is too white anyway. He will sue Arizona from enforcing ID legislation that the rest of us have to abide by both here and abroad (try crossing from Canada into the United States without a passport) while letting sanctuary cities pass laws which fly in the face of the federal law.

His blatant misrepresentation of this monstrosity of a health care bill becomes more and more evident each day. He doesn’t care. His appointment to head Medicare has publicly stated he is for rationing of health care for seniors, and is an admirer of the British system. Try getting a hip replacement in Britain if you are over eighty. He is a scary dude. But middle class America has more than its fair share of the health care pie.

And as he goes merrily down the road with his radical leftist agenda (the purpose of NASA is outreach to the Muslims?), he is destroying our currency and loading the country up with debt…like someone with a stolen credit card. Don’t interrupt his golf games, his concerts, his travel plans and his parties. Nero is fiddling while Rome burns…and loving it.

The fall elections are the most important elections in our lifetime. Unless some checks and balances are put into place, we are in big trouble. The damage will be irreparable, and country will be asking 10 years from now…what happened? Look at what he is doing. Enough!!