Monday, February 11, 2008

Shady Acres

Before there was the Marting scam there was the Route 23 Viaduct scam. The Route 23 Viaduct consists of 7.868 acres located west of the Chillicothe St., which the city owned back in 2000. The property and money involved in the Route 23 Viaduct scam puts Marting’s in the shade; but the Viaduct never got the notoriety it deserved. Speaking as a private citizen before the City Council on 12 July 2004, Bob Mollette urged City Solicitor David Kuhn and County Solicitor Mark Kuhn to investigate the sale of the Viaduct property, but they did not and neither did local media. With the exception of Mollette and his wife Teresa, people who are well informed about Marting’s often know little or nothing about the Route 23 Viaduct property. What follows may be news for some of them. 

In the Beginning

According to a November 13, 2000 statement from the firm of Johnson and Oliver, which was in the thick of the Route 23 Viaduct scam, the city sometime prior to November 2000 advertised that the Viaduct land was for sale but received no bids. No bids on potentially valuable property that was located next to Route 23, the main road through south central highway? Why not? Because, according to Chief of Police Charles Horner, who did an investigation of the sale, Mayor Bauer and the developer Elmer Mullins conspired to keep rival bidders away by spreading rumors that the land was contaminated and that the Ohio EPA had mandated a cleanup. In fact, as Horner pointed out and as the OEPA confirmed to me, the OEPA has never done a soil analysis of the Viaduct property and never mandated a cleanup. Horner’s investigation, incidentally, was done not so much for the sake of justice as to save his own job, since it was known that Bauer was on the verge of firing him. Once Bauer was recalled, the Viaduct became a dead issue for Horner, just as the Marting scam did. 

The city put the Viaduct land up for sale a second time, placing an official notice in the Portsmouth Daily Times, on 18 November, 2000, calling for bids and setting a minimum of $60,000 for the nearly eight acres. The city was offering the land on the condition that within eight months the purchaser would construct a ten-thousand-square-foot building that would hire two hundred full- and part-time employees. Bauer even pronounced publicly there would be four hundred employees. The notice did not specify what the ratio of full-time to part-time employees would be, a glaring loophole, especially since the business that eventually occupied the building hired a lot of part-timers. The notice included boiler plate language that the employees who would work in the new business would not be discriminated against because of race, color, religion, sex or national origin. It might also have stipulated that employees with criminal records would not be discriminated against, either, because I have been told the business hired more than its share of shady characters with records. If a felony was not a requirement for working in the new business, it apparently was not a hindrance either.

Cleaning Up

Most importantly, the 18 November 2000 notice in the Daily Times further stipulated that “the buyer of the property shall accept all responsibility for any environmental cleanup of the site or the obtaining of clearance from Federal or Ohio EPA which may be required [italics added], and must indemnify and hold the City of Portsmouth harmless from such liability.” No stipulation in the notice would become more controversial than the one related to the issue of contamination.

Several questions should have been but weren’t asked about the city’s official notice, which incidentally has some glaring mistakes, including a sentence that asserted the city would sell the land to the lowest bidder! Why was the city trying to sell property that might be contaminated? Why didn’t the city test the soil or better still why didn’t it ask the Ohio EPA to do it? Why leave it up to the purchaser to make the determination of whether a cleanup or OK from the OEPA “may be required”? Why leave so vital a question to be answered by a private party? Why let the two hundred, or four hundred, employees in the ten-thousand-square-foot building and hundreds of potential employees in other establishments work on a site that might be contaminated? The answer, Chief Horner said, was that Bauer and Mullins sought to discourage other buyers from bidding on the property by spreading the rumor it was contaminated and that the OEPA had ordered a cleanup. By spreading the rumor, Bauer made a sweetheart deal possible for Mullins, who ended up paying the minimum dirt-cheap price of $60,000 for the potentially valuable land. The Ohio EPA never mandated a clean up of the Viaduct, but Mayor Bauer had mandated that Mullins would clean up financially.

One of the striking similarities between the Marting and the Route 23 Viaduct scam was the way in which Bauer hurried up the sale of the property on the grounds that there was an emergency. In a memo dated 2 March 2001, Bauer asked the City Clerk to call a special meeting of the Portsmouth City Council so that it could grant him the authority to sell the Viaduct land, declaring that sale “to be an emergency.” The memo does not explain what the emergency was, but it was probably Bauer’s need to close the deal before the public learned he was in the process of committing the first of the two real estate frauds for which his administration would become infamous, the second of which, the sale of the Marting’s building to the city, would lead to his being recalled from office by a two to one margin.

Anchor Business

The requirement that whoever bought the nearly eight acres would build a ten-thousand- square-foot building for an anchor business that would provide two hundred jobs was the equivalent of requiring a prospective mall developer to provide an anchor store. Failing to find an anchor store for the proposed 1980 Mall was one of the things that put the kibosh on that project. The city should have required that Mullins bring in a business that provided good jobs, in manufacturing or retail, but it didn’t. In a revealing comment at a Portsmouth City Council meeting on 21 Sept. 2004, councilman Howard Baughman, the mayor-in-waiting, said about the proposed Aluminastics company plan for building a plant near Route 23 that it was “not anything like the viaduct property.” The Aluminastics plan, Baughman explained, unlike the Route 23 Viaduct, was “not a developmental venture for entertainment, restaurants and other things. This is about manufacturing jobs which any city in the Midwest would drool over with jobs that would be quality pay.” In other words, after Route 23 was the done deal that he was partly responsible for foisting on the city, Baughman admitted that it was not best use of the land after all. The jobs at the Route 23 Viaduct establishments would be of the minimum-wage, service-sector variety, filled largely by young low-paid part-time employees, hamburger flippers, ticket takers, and telemarketers, with a high turn-over ratio, not the kind of work force that could be expected to help turn Portsmouth’s economy around. But if the employees at the Viaduct establishments make low wages, Mullins and the owners of the businesses who bought land from him, make good profits, perhaps even profits high enough to drool over.

Low Wages, High Profits

Take note of what price tag the Scioto County Auditor puts on the property that was subsequently built on the Route 23 Viaduct, for which Mullins paid only $60,000. The County Auditor lists the Portsmouth Cinemas at $1,820,630; the Telemarketing operation at $899,710; Salmons State Farm Insurance, $458,530; Buffalo Wild Wings, $334,430, and Dairy Queen, $140,750. The value of the new sub shop Penn Station has not yet been established by the County Auditor. The value put on the businesses in the Route 23 Viaduct by the county auditor is in the neighborhood of $4,000,000, and counting, because not all of the nearly eight acres has been developed. The estimated value the County Auditor puts on property is traditionally below market value, so the property may be worth substantially more than $4,000,000, and Mullins, without much regard to greenery or appearance, has not done selling off every inch of it. How much money has Mullins made on his $60,000 investment? Maybe only his accountant and the IRS know, but if the related Mullins Construction company has also profited from the construction on the site, it could be much more than whatever Elmer Mullins made selling the land.

The scandalous footnote to all this is that every single business in the Route 23 Viaduct is abated. Nobody is paying a dime of taxes and won’t for years. Marty Mohr said at a January 2004 City Council meeting, “We cannot continue to give tax exemptions to companies within our district. A smaller percent of the people are picking up the tab.” He went on to say that the city had given so many tax credits during the past four to five years that he didn’t feel the city could afford another exemption. I am not aware that Mohr or any other council member did anything to stop the abatements for businesses in the Viaduct, even though they are glaring examples of unwarranted abatements. Some abatements make sense, but they have metastasized in Portsmouth’s economy. Whether they deserve an abatement or not, almost every new business gets one, which means the money the city needs for schools and other essential operations is just not there. What incentives do businesses need for building at the Route 23 Viaduct, with its advantageous location? The Viaduct property, to use one of Mayor Kalb’s expressions for another scam-in-the-making, the Municipal building site, is “prime real estate.” Bauer estimated that initially 1600 vehicles would go on and off the Viaduct every day. Five years later, let’s say that number is around 2000, which would mean annually 730,000 automobiles, many of which would have more than one passenger. At a minimum, that’s a million potential customers a year. Did the city need to give tax free status for from ten to fifteen years to attract businesses to the Viaduct? I very much doubt it, but when it comes to money the city of Portsmouth is like a drunk that every business knows it can roll. 

Even the new downtown office building that Clayton Johnson built in 2004 was abated, setting an example for the Dairy Queens and Buffalo Wild Wings of the world to follow. If the man reputed to be the richest lawyer in Portsmouth, and who claims to be always doing what is best for the city, won’t pay his fair share of taxes, why should businesses that have no roots in the community? The big profits alone should have been enough incentive at the Viaduct, but there were other perks. Because of Bauer’s lies, the city had to pick up the $125,000 tab for the traffic light at the entrance to the Viaduct. Bauer claimed that a traffic light in that location had been mandated by the state, and therefore the city and county were obligated to pay for it, which was no truer than his claim that the OEPA had mandated a toxic cleanup of the site. The traffic light was just one more plum in Mullins’s pie.

“A Rotten Organization”

The two-hundred-employee business that Mullins provided turned out to be a franchise of the notorious telemarketing company Civic Development Group (CDG). Public relations firms get paid big money to come up with these euphemistic or fraudulent names: Civic Development Group! How about Con Artists Consolidated or Royal Rip-Offs, Inc. Telemarketing is now what pocket picking was in the past. Owning the ten-thousand-square-foot building that it occupies, Mullins became a partner in the Portsmouth CDG telemarketing business. This was not a new business and these were not new jobs. The CDG had first come to Portsmouth in 1995, occupying the old GTE building, on Albert St. The home offices of the CDG are in in New Jersey, in Tony Soprano territory. A longtime employee of the Civic Development Group operation in Portsmouth told me he had heard from fellow employees that the New Jersey Mafia were possibly in control of the CDG, which at that time had thirty-seven offices in the United States. “It is a shame,” a veteran telemarketer who had worked for the CDG commented on the website, (a whistle-blowing website), that through the CDG, “police and fire organizations get in bed with mafia types such as these.”

A former employee of the CDG, who identified himself as “Ted, from Canton, Ohio,” wrote a revealing exposé of the Canton CDG in RipOffReport. He wrote “that telemarketers often skirt the edge of taste, ethics, and manners. However, Civic Development Group, aka Millenium Teleservices, aka CDG Management, is a particularly rotten organization from both an employee as well as the public’s perspective.” Ted pointed out that most of CDG’s profits come from telephone solicitation for charities, especially for donations for state troopers’ associations. Ted said CDG’s employees were encouraged to create the impression that it was actually a state police officer who was making the call. As long ago as 5 June 1998, the Federal Trade Commission charged CDG with fraudulently claiming that money collected for the police would go for bullet proof vests and death benefits for the families of officers killed in the line of duty. In fact, most money collected by CDG for the police never went to the police.

As recently as November 2007, Channel 5 in Cleveland exposed the telemarketing scam of the CDG operation in Canton involving disabled veterans. Of every dollar raised for disabled veterans, the CDG kept eighty-seven cents and gave thirteen to a phony front organization called Disabled Veterans Association. Contributors thought they were giving to the Disabled American Veterans, a legitimate charity. In its reporting on that same story, on 19 November 2007, the Columbus Dispatch published an article headed “Troopers’ Fundraising Company Scrutinized,” which revealed that only a small fraction of the money the Ohio Trooper Coalition raised went to kids. “Most of the rest of the money went into the pockets of Civic Development Group LLC, a New Jersey Company that’s now being sued by the Ohio attorney general’s offices over its fundraising practices for the troopers’ group . . .” A watchdog group on charities put the Ohio Trooper Coalition on its Top Ten Ebenezer Scrooge list when it comes to giving to charity. If OTC skimps on charity, it doesn’t on salary. It paid its executive director $90,000 in 2004 for working a twenty hour week. Do you recall reading about any of this in the Portsmouth Daily Times? Jeff Barron was recently fired and blacklisted in Scioto County for daring to report that a Glockner Motors employee was arrested for dealing drugs. Imagine what they would have done to him if he had dare investigate Portsmouth’s CDG operation? They might have fished him out of the Ohio River.

As someone who has received more than one call from the CDG, I know how their solicitors try to awe, confuse, and intimidate a “mark,” a slang term for a gullible victim of a con artist. I wrote a blog recently about how the marketing firm KaBoom! exploits the love people have for children. The CDG exploits the respect and fear people have for law enforcement. The police associations and unions, unfortunately, have been all too willing to enter into this unsavory relationship with an operation with reputed criminal ties since they get their cut, small as it is, without doing anything except letting their reputation be smirched.

Ted of Canton revealed that the CDG likes to establish franchises “in small, down-on-their-luck communities.” Well, Portsmouth certainly qualifies on that score. The CDG finds depressed communities in Appalachia ripe for picking, or for telemarketing. Such communities are so grateful to have any company offer them any kind of jobs, even low-paying and shady ones, that they don’t look a gift horse in the mouth. CDG franchisers find it easier to hire employees in depressed communities where unemployment is high or where there is a pool of students, who will work for low hourly wages. But since they have some education, students can be a problem. Most of what I learned about the Portsmouth CDG came from students. Ted says the CDG prefers "the desperate, uneducated, and those least likely to question what they do.” They also seem to have a weakness for those with criminal backgrounds, according to my sources at the Portsmouth CDG, which literally went after street people, advertising by pasting notices on telephone poles.

Drive-by Shooting

An experience I had several years ago with CDG revealed to me what a fishy business it is. I was driving through the Route 23 Viaduct on my way to the Adelphia Cable office, which was then located in the wasteland behind the Viaduct, next to the railroad tracks. On my way to the Adelphia office, I stopped, got out of my car, a good distance from the CDG building, and took a photo of it. It couldn’t have taken more than a few seconds. I have taken hundreds of photos of buildings in Portsmouth, so I wasn’t doing anything unusual. As a matter of fact, when I got to the Adelphia building, which looked like a fur trapper’s cabin out in the wilderness, I also took a photo of it before entering to take care of some business.

When I came out ten or fifteen minutes later, I noticed two people near my car. One was behind it, taking down my license plate number, the other was looking through the windows of the car to see what was inside. As I approached my car to ask what was going on, I was told, without any apology or hesitation, that they were employees of CDG and they wanted to know why I had just taken a photo of the CDG building. Evidently, in the short time it had taken me to snap a photo, someone in the CDG building had spotted me, presumably through that big one-way window in front, and two employees were dispatched to follow me. I was to made to feel I had committed a drive-by shooting when the only shot I had taken was with my camera.

I had taught as a U.S. State Dept. Fulbright exchange professor in Communist Poland, in 1971-72. Portsmouth reminds me a little of Communist Poland, only I don’t remember, even though I took photos in Poland, ever being stopped and interrogated. My CDG interrogators were probably speaking with all the authority of officials in a police state. The CDG had close ties to both the Ohio state police and, possibly, to organized crime. I mean, why not demand to know why someone is taking photos if you have the police and the Mafia in your corner? But what do they have to hide, anyway? What are they so guilty about? Why become so paranoid when someone takes a photo?

I got out of that tricky situation by pointing out I was just a harmless old gent who takes a lot of photos in Portsmouth, which happened to be true. Well, maybe not the part about being harmless. I found it hard to believe that I had to explain anything to them, but what was I going to do? Complain to the state police, who were in on the take? Or to the Portsmouth police chief, Charles Horner, who has accused senior citizens like me of being “domestic terrorists” for mounting campaigns to recall elected officials? I was later warned by people who had worked for or knew something about the CDG that I better not get on their shit list, or should I say hit list. I was told by a colleague at Shawnee State of someone who allegedly had fled Portsmouth after being threatened for asking too many questions about the CDG.

No Call List

The telemarketing building now sports the initials OTC, which stands for Ohio Trooper Coalition. The OTC was established in 1984 “to assist in promoting the image of troopers across the state.” It also exists to promote the interests of state troopers, working for better working conditions and wages, the way any union or professional association is expected to. Most of the funds for the OTC, by its own admission, are raised through telemarketing. So the adoption of the Telemarketing Sales Rule, which restricts indiscriminate telephone solicitation, threatened to cut off the financial lifeblood that the OTC raises through telemarketing. In a 2002 letter to the Federal Trade Commission, the e OTC executive director lobbied the Federal Trade Commission for an exemption from the Telemarketing Sales Rule, but not on the basis of being a union, which would not have been a very effective argument, but on the basis of the programs the OTC sponsors for children. Remember the marketing strategy slogan for KaBoom!? It’s for the kids? The OTC is engaging in “social marketing,” emphasizing what it does for kids, not what it does for itself. The $90,000 a year part-time executive director of the Ohio Trooper Coalition wrote to the FTC, “The proposed amendment to the Telemarketing Sales Rule would more than likely diminish the funds that are presently used to provide our drug education program, B.A.D. (Bears Against Drugs), and also our Hug-A-Bear program to children.” The plea “Woodsman, spare that tree” is replaced by “Legislator, spare that child.”

The state of Ohio law restricting telephone solicitation became effective September 2003, but includes an enormous number of exemptions, (ORC 4719.01) one of which the OTC apparently falls under, because the OTC is still doing telephone soliciting, or having a telemarketer do it in on its behalf. The CDG previously did the telemarketing for the OTC. What is the role of CDG now? That is not clear, but what is clear from records in the County Auditor’s office is that Mullins still owns the building, so he may still have something to do with whatever telemarketing company is doing the solicitation for the OTC. Or has the OTC eliminated the telemarketing middle-man, the CDG, and is the OTC running the operation itself? That would mean the police had muscled out the shady New Jersey crowd in handling a lucrative racket.

Hmm, what's the name of that developer?

One thing about the Viaduct scam that needs to be remembered is that Mayor Bauer kept the name of the developer behind it, Elmer Mullins, a secret as long as possible, just as Mayor Kalb (shown here) is keeping secret the name of the developer who allegedly wants to buy the site of the current Municipal Building. Is Elmer Mullins or Neal Hatcher that unnamed developer? Why do public officials keep the public in the dark about the identity of the developer who is behind a major project until the last minute? Probably because it enables corrupt city officials to secretly work out with a disreputable developer the details of a dirty deal, and then at the last minute claim there is an emergency that requires the City Council to suspend the rules and approve it immediately.

In its seemingly permanently arrested state of economic and moral development, Portsmouth has looked for a half century to a mall as its salvation. Our local con artist lawyers and developers have grown rich perpetrating the Myth of the Mall. What we got instead was the Route 23 Viaduct, a “commercial park,” as Bauer originally called it. In view of the shady history of that possibly contaminated commercial park, I think a more appropriate and more easily remembered name for it would be Shady Acres. There have been so many shady developers, shady lawyers, shady politicians, and shady employees connected to it that it deserves that name. I don’t know, it has a certain ring to it, the same ring I associate with a call from a telemarketer.