Lead Paint and the Tangled Web of Corporate Finance
Back in August the Washington Post ran an excellent, heartbreaking article on rip-offs of victims of lead paint poisoning. The article linked here should be read in full, but the short story is that finance companies induce poor people with annuities to cash their annuities in for a lump-sum pittance. In Baltimore, which like other older cities has been plagued by paint containing lead, some sufferers had received compensation for damage to their health from lead paint. But some recipients later sold their valuable annuities for pennies on the dollar. This nasty turn of events followed–of course–the previous heart-rending saga, beginning with the harm to human and animal victims and progressing to most landlords and property owners coming out financially unscathed, or close to it–while the victims fell disproportionately on the public welfare rolls. (Some lead-paint sufferers were then cleansed off the welfare rolls in President Bill Clinton’s ‘welfare reform’.)
The annuities were intended to protect the victims, somewhat, for the rest of their lives, giving them a steady monthly income, since a number of the people harmed were left so affected or ill as to be unemployable. But many of the annuities have been bought up, sold in exchange for ‘ready cash’ by the recipients or by unsophisticated relatives. This kind of scheming is not new. It figures as a plot point in Jane Austen’s Sense and Sensibility, published in 1811:
Her legal allowance was not adequate to her fortune, nor sufficient for her comfortable maintenance, and I learnt from my brother that the power of receiving it had been made over some months before to another person. He imagined, and calmly could he imagine it, that her extravagance and consequent distress had obliged her to dispose of it for some immediate relief.
Two hundred years later, this particular suppurating pimple of financial chicanery has cropped out on the face of Wall Street, with some of the same blaming the victim, too.
Less poetically, we can narrow down the focus from Wall Street.
One company involved is Access Funding, located according to its Zoom Company Information in the LexisNexis database at 6900 Wisconsin Avenue, Bethesda, Maryland, Suite 700.
Company records suggest that the company has recently dwindled. Access Funding recently listed $5M – $10M in revenues and 20 to 50 employees–including a “Director of Lottery Services.” However, its recently updated entry in the Lexis database lists “two employees” and revenue in six figures. Public investigations are under way, though slowly. After I recover fully from pneumonia and bronchitis, I hope to do some research in, among other things, the company’s interest in “Lottery Services.” Presumably the link is lottery winners who choose to take their winnings in annuity payments.
For the moment, I am interested in the murk of property ownership. The umbrella concept is responsibility. Property owners can sometimes be held to account for what happens on their property. The idea is that even a wealthy and politically connected landlord is still a landlord, and what happens on the property may be the responsibility of the owner, unless investigation reveals that full responsibility lies elsewhere. According to general principle, however, at least the question of responsibility is to be investigated. This general principle is supposed to apply, so far as I know, regardless of whether the owner is an individual or a corporation. If any harm done turns out to be exclusively the fault of a tenant, so be it, but a light has to be shone. Needless to say, this is exactly the kind of principle under attack by the Republican Party, under the guise of releasing “small business” from the burden of “regulation.” Instead of transparency and investigation, the public gets closed records and murky corporate layers that conceal ownership and responsibility. Instead of accountability, the public gets privatization of the rewards (dignified as “investment”) and socialization of the damages. Ethically or rationally under-qualified insiders do the harm; the public pays for the harm. (As goes the GOP, so go the Clintons. The secretive Clintons have triangulated exactly the same undermining of transparency and accountability throughout their careers, or at least since Bill Clinton lost an early election in Arkansas. This “Republican lite” pattern tends to be under-reported in political commentary, but it is a consistent theme in Hillary Clinton’s life since she was in college–following a track created by paralleling bad actions, but to a lesser degree or in a more secretive way, under the guise of mediating between opposing sides. More on that later.)
Corporate ownership is not an easy trail to follow.
The database of the Maryland Department of Assessments and Taxation indicates that Access Funding, based in affluent Chevy Chase, Maryland, had at least a couple of previous avatars, now canceled or forfeit. State records indicate the owner as “6900 Wisconsin LLC”–a limited liability company, not required to disclose details of individual personnel or ownership. The owner’s address is given as “c/o Washington Property Company, 4719 Hamden Lane FL 3, Bethesda MD 20814-2909.” Ironically, the secured party for both 4719 Hampden Lane and 6900 Wisconsin Avenue properties is the American Equity Investment Life Insurance Company. Thinking outside the box, it could be helpful if life insurance companies took an interest in health issues connected with the properties they underwrite. But then, American Equity may not have known of any connection between its property interest and the lead paint sufferers. This is one of the unimaginative principles guiding our eponymous ‘Wall Street’: sometimes it pays not to know. Again–this is exactly the guiding principle consistently upheld by a) the GOP, and b) the Clintons. (What is the ‘centrist’ number of lead poisoning cases?)
As mentioned, the “Washington Property Co” is pretty faceless, judging from public record. Checking political donations at opensecrets.org, from the Center for Responsive Politics, we can find that some Washington Property Co. exec donated more than $7,000 to candidate Mitt Romney. Peering closely at the state database, we can see an unhelpful typo in the street address of Washington Property Co., listed as “Hamden Lane” rather than “Hampden Lane.” (Typos and other mistakes that impede research are typical for these databases.) For the rest, Washington Property Co. has been active in Maryland since 2004, is as said located at 4719 HAMPDEN Lane, and the owner of 4719 Hampden Lane is “Hampden Lane Project LLC.”
Ah, now we’re getting somewhere.
Except that we’re not. The owner of the soul-stirringly named “Hampden Lane Project LLC”? — “c/o Washington Property Company 4719 Hampden Lane Fl 3 Bethesda MD 20814-2909.”
Let’s follow a different version of the company name and see whether that one pans out–the corporate name, rather than the Limited Liability Company name. Washington Property Company Inc., as opposed to Washington Property Co LLC, originated in August, 2004, in Delaware.
This one actually gets us somewhere. Owner name: “c/o Morgan Stanley, Suite 800, 3424 Peachtree Rd, Atlanta GA 30326.” Again, there is a typo in the public record: the name “Morgan Stanley” is misspelled. Again, typical of corporate records in state databases, in Maryland and in other states, adding to obstacles including LLC, LC and corporate names; old names; lack of disclosure of key personnel; and use of registered agents.
The 3424 Peachtree Rd building currently has spaces for lease btw.
Consulting the donor database from the Center for Responsive Politics, one finds that Morgan Stanley in Georgia donates almost entirely to a) Republicans and b) Hillary Clinton. A quick search of the current election cycle shows Morgan Stanley (Georgia) and its key people donating mainly to Jeb Bush, Marco Rubio–and Clinton. The Peachtree company/office has donated $43,000-plus to the Republican National Committee since 2012, mainly in 2012. It donated $20,000-plus to Right to Rise USA, the Jeb Bush-support PAC, in 2015. As in the 2008 election, Hillary Clinton is the stopgap candidate, the fallback position, for the GOP and for Wall Street.
So much for silk-stocking Republicans as somehow separate from the worst elements of either Wall Street or their party. So much for the Clintons as “Fighting for Us”–the slogan the Clinton campaign produced after jettisoning its earlier “Fighting for You.”
One thing the Bernard Sanders campaign has exactly right is that political-economic corruption is game-rigging. This is not just “one issue.” It touches virtually everything. There is no ‘centrist’ amount of lead in house paint.
One more quick point. First, a number of financial companies are in the business of buying annuities, some more respectably than others. Buying up annuities is big business. Second, all these companies contribute politically–if they donate at all–to the usual suspects: top preference goes to the GOP, next tier is Clinton.
Thus–in a quick look–people at Woodbridge Investments, for example, have donated some $135,000 in recent cycles, to Republican candidates including Carly Fiorina. Corona Capital has donated at least $6,400 to GOPers, including Rep. Todd Young of Indiana and Sen. Thom Tillis of North Carolina. Client First Settlement Funding conveyed a more modest sum of $500.00 to Florida State Sen. Lizbeth Benacquisto, among other donations to GOP candidates and the Republican National Committee. Someone at Settlement Capital Corporation gave $500.00 to John Boehner.
One of the biggest of these interested companies is Peachtree Financial Solutions. From company statements in the Lexis Nexis database:
Peachtree Financial Solutions is an affiliate of Peachtree Settlement Funding (Peachtree). Peachtree is a specialty finance and transactional tax-planning firm employing over 150 professionals in three offices located in Georgia, Florida and New Jersey. Peachtree has in excess of $500 million in committed financing lines for its specialty finance businesses and has originated over $2 billion in assets. Peachtree is the primary servicer on more than 5,000 transactions and is backed up by The Bank of New York. Peachtree’s servicing activities are routinely reviewed and subjected to agreed upon procedure audits by our financial partners. Peachtree is a full financial audit client of PricewaterhouseCoopers and its principal outside tax counsel for the WealthBuilder program is Foley & Lardner.
REVENUE: USD 17,500,000 www.wealthbuilder.com
Predictably, Peachtree Settlement Funding has been a big donor to both parties, Republicans and Democrats, in past cycles. Sen. Chuck Schumer has particularly benefited from Peachtree Settlement Funding–like any other office holder connected with Wall Street. Interestingly, in the current election cycle Peachtree Settlement Funding appears only in relatively modest donations such as $1,000.00 to Rep. Mario Diaz-Balart of Florida. Either Peachtree Settlement Funding has stayed on the sidelines because of the Trump phenomenon, or it is cooling its jets in the wake of reporting on chiseling suffering people out of their annuities, or both.
Meanwhile, there are other problems with annuities, including problems with the annuities themselves. One of the first things that happened to my late mother after the death of my father was that someone came to her front door and sold her a substandard annuity she did not need. (My mother died in 2012, from Alzheimer’s. Fortunately, she did have a good and honest banker, on the ball, who got in touch with the vendor and reversed the transaction.)
This is the kind of report not produced by Sen. Hillary Clinton, “a workhorse not a show horse,” as she put it, during her time in the U.S. Senate.