The Illogic of CoreLogic

Even Einstein couldn't figure it out

The Illogic of CoreLogic

It doesn’t make sense. Why would a troubled company whose main business is supposed to be advising others on whether or not to buy or sell mortgages, why would such a company itself go into the business of buying and selling mortgages when it itself was apparently a high risk company that those in the mortgage field should be wary of?  Core-Logic, in other words, was in a Catch-22 situation. If CoreLogic was doing its job properly it would  have warned itself that  CoreLogic was a risky company to be doing business with.  

First American, CoreLogic’s predecessor  had a troubled history. That may be why it rebranded itself with the awkward name of one of the companies it had acquired, CoreLogic. Two prominent officers of First American helped give the corporation a bad name. The septuagenarian director of First American, D. Van Skilling, was rumored to no longer have his Midas touch, and after CoreLogic lost $66.5 million in 2011, the second consecutive year of red ink, there was a board shakeup and Van Skilling announced his retirement. Then the chief financial officer of First American/CoreLogic, Anthony “Buddy” Piszel, resigned under a cloud in February, 2011, after it became known that he was under investigation for possible wrongdoing when he had been chief financial officer of Freddie Mac, the controversial quasi-governmental agency that had been accused, at least by Republicans, of helping bring about the so-called Great Recession. It did not help Piszel’s reputation, or First American/CoreLogic’s either, when his replacement at Freddie Mac committed suicide. The liberal online tabloid, the Huffington Post, reported that Piszel, while at Freddie Mac, instead of behaving like a Certified Public Accountant, had been living it up in a luxurious Maryland shore home, of which it provided a provocative  photo spread, not of nude women but of old money country club opulence. What  is expected above all of CFO’s, many of whom are glorified Certified Public Accountants, is financial probity, not profligacy. But Piszel proved to be a Jet-Setter in CPA clothing. “Some of the fancy toys on the property,” the Huffington Post pointed out, “include a $230,000 38-foot Fountain Sportfish Cruiser, ironically named ‘A Better Decision,’ powered by three fuel-sucking outboard engines, two high-end Jet Skis, a house Jeep and a few horses.” But the stock market crash that precipitated the Great Recession turned Piszel into a pretzel financially and  put his palatial coastal pad into the hands of a real estate agent. The asking price was just under $5 million.

Instead of improving its image, First American’s rebranding of itself as CoreLogic made it only worse. One handicapper estimated online that CoreLogic had almost a four-in-ten chance of going bankrupt in the next two years, offering the following colorful chart to illustrate its precarious predicament.

One of the problems at CoreLogic, the same handicapper explained, was  the ratio of assets to debts, as the following chart illustrates:

       Since the housing market has improved slightly in the last two quarters, so presumably has CoreLogic’s financial position, but it is not out of the woods yet, far from it, as the graph below, taken from the company’s most recent annual report makes clear, but only if you focus on the CoreLogic line, 

which shows that $100.00 invested in 2006 would have been worth only $60.00 at the end of 2011, a 40% loss. Highfields Capital, of  Boston, was CoreLogic’s unhappy, second biggest shareholder. Since Highfields was an $11 billion dollar company, it would have  invested closer to $10,000,000 than $100.00, and stood to lose not $40.00, but closer to $4,000,000.

            All these charts and figures may not have anything to do with the price of tea in China, but they probably have a lot to do with the price of mortgages in Portsmouth, where homeowners carry more CoreLogic mortgages than with all the other mortgage companies combined, by a roughly eight to one ratio, including such mortgage giants as  Bank of America and Wells Fargo. If First American is still in the mortgage business, you would not know it by Portsmouth, where it’s CoreLogic, CoreLogic, CoreLogic. It seems  illogical to me that  CoreLogic, a relatively small, financially troubled, faraway supposedly information-based company, the Portsmouth-focused branch of which is located in that odd little town of Westlake, Texas, carries the most mortgages in Portsmouth. The who, the why, and the how of it all is a mystery I will delve further into in my next post on the subject. 

Portsmouth, Ohio, and Westlake, Texas

“[Portsmouth] politicians, like Jesse James, have been holding up tax payers,
especially homeowners, for a long time.”

A Comparison of Portsmouth, Ohio, and Westlake, Texas

This is a tale of two cities, Portsmouth, Ohio, and Westlake, Texas. In most respects the two seem to have  nothing in common, but as I will show in a later posting, there is an important but somewhat puzzling link between Westlake and Portsmouth.
  

Among the things Portsmouth and Westlake don’t have in common is age. Incorporated in 1815, Portsmouth is almost two hundred years old. When Westlake was incorporated in the late 1950s, Portsmouth was already a hundred and sixty years old. Another thing they don’t have in common is population. The population of Portsmouth, though it has been shrinking for about a half century, is just over 20,000, which is twenty times larger than Westlake’s 1,000. But don’t judge a city’s vitality by the number of residents. Many Portsmouthers are old (like me), unemployed, and unemployable. A  number of them are on welfare. Westlake by contrast is known for the number of its residents who are millionaires.  In 2011, Forbes Magazine concluded that Westlake, with a median annual household income of $250,000, was the richest community in America. The estimated per capita income in Westlake is $125,000. The median household in 2009 was about $251,000.

Portsmouth, on the other hand, is one of the poorest cities in Ohio. The estimated per capita income in Portsmouth in 2009 was $17,089. In the last five years the median price of houses sold in Portsmouth, where the real estate market, like the local economy, has been sluggish for about a half century,  was about $60,000. In Westlake the median price of houses is just over $1,000,000. The unemployment rate in Portsmouth is currently at about 12%. The unemployment rate in Westlake is 6.3. (Before the Great Recession  hit in 2009, unemployment in Westlake was only 4.3.) In 2009,  33% of Portsmouth’s population lived below the poverty level. You would have trouble finding anyone in Westlake below the poverty level.

    The top employers in Westlake are financial services, with Fidelity Investments, the international financial conglomerate (headquartered in Boston) being the number one, and CoreLogic (aka First American) the number two employer. Westlake has no industry to speak of and is proud of it, boasting of its rural character, “an oasis with rolling hills, grazing longhorns, and soaring red-tailed hawks,” an oasis interspersed with “vibrant corporate campuses,” according to its official website. Westlake’s motto is “A premier knowledge-based community.” In keeping with that motto, corporations have campuses. There is the TD Auto (formerly Chrysler Financial Services) Campus; Fidelity Investment Campus; Solana Corporate Campus. The First American and CoreLogic “campus” is located on Campus Circle. This is academia with an acquisitive twist, because it’s all about money. Most employees in Westlake work with their heads rather than their hands, and their heads are good with figures.

Comparative Crime Rate Indexes for Westlake and Portsmouth

“If there were a category for illegal drug use, and Oxycontin in particular,
 Portsmouth would be off the charts.”

A comparative study of the 2010 crime rates of Westlake and Portsmouth are startling. You are eight times more likely to be the victim of a crime in Portsmouth than in Westlake, and you are sixteen more times likely to have your home or automobile broken into; five times more likely to be raped; and nine times more likely to be murdered in Portsmouth than Westlake. The burglary rate in Portsmouth as long time residents know is much higher than statistics indicate, because many burglaries go unreported, some victims feeling it’s a waste of time, because the police force—at least under chief Charles Horner—hardly seemed interested. If there were a category for illegal drug use, and Oxycontin in particular, Portsmouth would be off the charts.There was a mix-up in online national news when it  was reported that a suspicious character with a weapon arrived at a movie theater in Westlake a half hour early and sat in the back where he was suspected of positioning himself as if at a shooting gallery. It was assumed it was Westlake, Texas, perhaps because Glenn Beck had put the town in the news, but it turned out the town in question was Westlake, Ohio, just outside of Cleveland.

      As if Portsmouth’s crime statistics were not bad enough, an algorithm used by USA.com measures another kind of crime: hate crime. According to USA.com, hate crime in Portsmouth is twenty-two times the national average.

Crime Doesn’t Pay in Westlake

Statistics indicate the crime rate in Westlake, Texas, is negligible. The chief law breakers in Westlake appear to be drivers. Westlake collects more traffic fines per capita than any other town in Texas. Portsmouth might help resolve some of its financial problems if, like Westlake, it cracked down on not just drug but also vehicular traffickers, of which it has plenty, including several on the city council. The streets of Portsmouth are more like the Wild West than the streets of Laredo. Concerned not about drivers but Occupy Wall Street radicals, Fox talk show host Glenn Beck sold his mansion in New Canaan, in the country club section of Connecticut, and moved his family to Westlake, where for $20,000 a month he rented a $4 million dollar mansion in a remote, gated, golf course development. He plans eventually to build a gated mansion of his own. If avoiding crime is his highest priority, he couldn’t have done better than Westlake or worse than Portsmouth, where the politicians, like Jesse James, have been holding up tax payers, especially homeowners, for a long time. By contrast,  Westlake’s local sales tax is only 1% and it was not until 2010 that it introduced its first property tax.

If crime doesn’t pay in Westlake, servicing Portsmouth’s mortgages does, as I will show in a future posting.

Ayn Rand's Dollar Mysticism (1963)

cartoon from fishink.us

        Now that Mitt Romney has chosen Paul Ryan as his running mate, Ayn Rand (1905-1982), Ryan’s fascistic, rather kooky heroine, is in the news, with Ryan, donning Romney flip-flops,  repudiating his ties to her. She was in the news back in the early 1960s when Barry Goldwater was the Republican candidate for the presidency. Rand was credited with pointing Goldwater and the right-wing of the Republican Party down the libertarian, laissez-faire, anti-government path that it has been tripping down ever since. Nearly a half century ago, in 1963, I published a brief article on Rand in the final issue of a radical magazine that liked to think it was descended from the legendary The Masses. But the times they were a-changing, and William Buckley became the John Reed and the National Review the The Masses of the right. In “Ayn Rand’s Dollar Mysticism,” my point was that though Rand considered herself an atheist, I thought she had made a religion of the so-called Free Market. However much Ryan is now trying to deny it, Rand inspired Free Market Fundamentalists, like himself, who, a half century later, have seized control of the Republican Party in a coup orchestrated by Rupert Murdoch’s Wall Street Journal and the National Review.

Charge-off Chicanery

“The Madame Gu of Portsmouth Politics.” 

Charge-off Chicanery

In a letter dated 16 July, 2012, Charles Barga of the state auditor’s regional office, in  Athens,  notified Portsmouth city auditor Trent Williams that the city’s latest state  audit, for 2011, revealed that the city had  continued to violate statutes  regulating accounting practices.  Barga reminded Williams that “Ohio Revised Code Section 5705.10H states that “monies paid into a fund must be used only for the purposes for which such a fund has been established.” He also pointed  out that in Portsmouth  “monies [are] being paid into funds and subsequently used contrary to their restricted purposes.” Williams has not been obeying those restrictions  for some  time.  Through a procedure that he puzzlingly  calls “charge-offs,” Williams has been making  what Barga calls “unallowable allocations,” that is he has been taking money from one fund illegally to pay the expenses of another.  Why? Apparently  in order to help pay the salaries and raises for  the mayor, the city auditor, the city solicitor,  and other city employees, including the fire and police department employees.   As a result, even during Portsmouth’s chronic periods  of financial shortfalls, the Portsmouth city auditor has used unallowable allocations to  help  pay salaries and provide raises, using funds, that is, “contrary to their restricted purposes.”

Williams calls the transfers he makes “charge-offs.” He considers them  allowable but the state auditor considers at least some of them unallowable. I have looked in vain in many dictionaries to find a definition of charge-off in the sense that  Williams uses that term. What hard copy and online dictionaries do say is that a  charge-off is an uncollectable or bad debt. For example, Wikipedia defines charge-off as “the declaration by a creditor (usually a credit card account) that an amount of debt is unlikely to be collected.”  Merriam-Webster traces this sense of the word as far back as 1892. Why does Williams misuse the word? Instead of calling an unaccountable allocation an unaccountable allocation, he calls it a “charge-off,” perhaps to fool taxpayers. He appears to be  misusing the word to try to cover up his  shady accounting practices. He may have fooled the public, but he has not fooled the state auditor. In the city’s 23 July response to Barga’s 16 July  letter, which has Williams name at the bottom, the word “charge-off”  is used thirteen times, but Barga had not used it even once in his letter to the city. I am assured by a Certified Public Accountant  that “charge-off,” in the sense that Williams uses it, is not a word that is part of the accounting lexicon, except when it refers  to an uncollectable debt. Williams should stop using the word “charge-off”  and say what he apparently means—namely “indirect costs” or what Barga calls  “allocation adjustments.” Indirect costs or allocation adjustments are legal, provided those who resort to them  prove they are warranted, which too often, according to Barga, is not the case in Williams’ bookkeeping. In  Williams’ bookkeeping,  “charge-offs” are the means by which he attempts to get  around the restrictions placed upon the city’s spending practices  by Ohio Revised Code Section 5705.10H.

  

Crux of the Matter

The crux of the matter, the point in dispute between the state auditor and Williams, is the city’s abuse of “charge-offs.” The city has used funds designated for sewers, water, street maintenance, etc. to pay salaries and benefits of other departmental employees. The result is that now many of those funds are in deficit positions and the infrastructure, for which the funds were supposed to be used,  are falling into disrepair. City water, sewer, and sanitation fees have increased steadily over the years to cover ever increasing salaries and benefits. In 2010,  over $1,000,000  was transferred from the water fund to cover salaries, overtime, and benefits of fire department personnel. Only the salaries and benefits of the water and sewer departments should be paid from the Water and Sewer Funds with a reasonable charge by the General Fund for administrative expenses. The city has used the charge-off methodology to justify the increase in water and sewer fees for years by charging fire department salaries and benefits  to the Water Fund and then passing the cost to the residents in the form of higher water and sewer fees. 

The amount of the charge-offs could not be justified by Williams, other than to say he has always done it that way. The first sentence of the city’s  letter (23 July 2012)  in response to Barga states, “The City of Portsmouth has used a system of payroll ‘charge-offs’  historically for as far back as at least 1993,” or about the time Williams became auditor, although it may be that cooking the books actually began when the notorious Tom Bihl was city  auditor. Regardless of when the illegal practice actually began, precedent is the main argument the city uses to justify these “charge-offs.” Not only in the first sentence, but on  page two of the city’s reply, the claim is made that “The City [in 2011] continued to use the same method [charge-offs] consistent with the past many years . . .” In the third and final page of the city’s letter, the claim is again made that “. . . the City has used a consistent methodology over many years” [emphases added]. In other words, the city has been doing it this way for so long (and getting away with it!) so Williams should be granted  some slack and not be required to change his methods immediately. But doing something wrong, unethical, or illegal for twenty or more  years doesn’t make it right or mean we have to put up with it any longer, does it?

Poisoning the Money Supply

In the New York Times (8 Aug. 2012) there was a report on  the  trial of Madame Gu Kailaithe, the wife of a prominent Chinese Communist official. She was convicted of poisoning a British businessman associate. Because she told the court there were extenuating circumstances—she claimed the British businessman had made threats against her son—she is expected to be spared the death penalty. The son is a student at Harvard’s  John F. Kennedy School of Government, so her claim seems specious. To my way of  thinking,  Trent Williams is the Madame Gu of Portsmouth politics. He is the poisonous auditor of  Portsmouth’s finances. He feels he should be granted a pardon and given more time to rectify any mistakes and balance the books.  Will the state auditor buy his argument? 

   First Ward councilman Kevin Johnson recently circulated an email reminding voters  that the City ended Fiscal Year 2011 with a deficit of $1.4 million, which the state auditor responded to by putting the city on Fiscal Watch. The deficit  projection for FY2012 is even more, $1,418,719. This is just the General Fund and does not include deficits in other funds such as Water and Sewer. At the beginning of 2012, the sewer fund had a $600,000 deficit, so, as usual, crooked politicians  in the Municipal Building city raised our sewer fees 10% to help cover the deficit.

The state auditor can place financially troubled municipalities in three  fiscal categories: Caution, Watch, and Emergency. Portsmouth was in Fiscal Caution last year, and now, even  after the city’s income taxes were increased it has moved on to the next most serious condition—Fiscal Watch. If the state auditor does not buy the convoluted excuses and veiled threat  of financial catastrophe in the city’s letter of 23 July,  Portsmouth may  be declared in Fiscal Emergency. But there could be a silver lining if that happens. If the city is placed in Fiscal Emergency, the State will take  over the finances of the city as it took over the finances of Scioto County, where there reportedly has been financial improvement. If what’s good for the goose is good for the gander, then what’s good for the county should be good for the county seat, Portsmouth.

Confucius Says 

 I have compared Williams to Madame Gu. A saying attributed to Confucius is, “Never seek illicit wealth.” Another could be, “Never resort to charge-off chicanery to hoodwink  taxpayers.” 

Lapdog Journalism

Lapdog Lewis Lauds City Solicitor

Frank Lewis of the  Daily Times wrote a column on July 25th (“Solicitor’s Speech Reminds Us to See the Good Things”) that is one of that journalistic lapdog’s most shameless, hand-licking performances  In it, he flatters the  businessmen whose advertising dollars are helping keep the sinking Daily Times afloat along with his own job.  “We have business people such as Jeff Albrecht, Andy Glockner, Chris Lute, Rick Morgan, and numerous others, working selflessly,” Lewis fawningly wrote,  Selflessley? When he isn’t trying to fix an auction in Athens, Jeff Albrecht is trying desperately to get the Municipal Building torn down and replaced by something  that  will help him pay for the new Holiday Inn he built on the site of his previous downtown mistake,  the  Ramada Inn, the “Queen of the Rust Belt,” as one traveler dubbed it. Were the Glockners acting “selflessly” when they moved their automobile dealership from downtown Portsmouth several miles out on Route 23? Was Chris Lute acting selflessly when he did the same thing just a few years ago with Lute Plumbing? Glockner and Lute were  not acting selflessly; they were acting shrewdly, as businessmen must in the competitive commercial world. They were thinking of their profits, not of downtown Portsmouth’s wellbeing. All the empty buildings and lots that Lute left behind act as a further drag on the chronically depressed downtown economy. Moving was the sensible thing for Glockners and Lutes to do, but don’t be a poodle and lick their  “selfless” fingers.

At least the Lutes and Glockners and other businessmen whom ladog Lewis praises are successful, but Mike Jones is in the tradition of the failures and bankrupts who gravitate to public office in Portsmouth, such former and present city officials as Greg Bauer, Jim Kalb, John Haas, and David Malone. Although you are not likely ever to read Lewis writing about it,  Kalb, Haas, and Malone handled their personal finances so badly that they ending up declaring bankruptcy. The only question now is whether Mike Jones will be soon joining them. In 2007, Jones paid a whopping $325,000 for the  down-at-the-heels Crispie Creme donut shop on the corner of Waller and Gallia Streets, a property the County Auditor had valued at $107,990. Paying $325,000 for Crispie Creme, a three hundred percent increase over the value the auditor placed on it, is even more inflated than the $2,000,000 of taxpayer money Bauer, Kalb, et al, illegally drew on to pay for the Marting building.Where did Jones get the money to throw away on a dying industry like donuts? When it comes to diet, according to a nutritionist at the New York Obesity Research Center, the only healthy thing about a donut is the hole. Like almost all public officials in Portsmouth, Jones was a puppet of the dishonest,  now disgraced and defunct Southern Ohio Growth Partnership, from which he borrowed $147,000. Where did Jones get the rest of the money for his financially suicidal purchase? The American Savings Bank obliged him with a $182,000 mortgage.

        The donut shop was badly mismanaged under Jones, but it  probably would have failed anyway, with the heavy mortgage it was weighed down with. If only Crispie Creme had as many customers as it had cockroaches, it might have stayed in business. In an earlier posting on Crispie Creme, I asked, “Why did Jones and his partner pay $325,000 for a walking-dead donut shop?” Now that the business has gone belly up, as the For Sale in front of it crookedly proclaims, that question is even more pressing. If only there was an investigative reporter on the Daily Times, instead of a lapdog, we might get the answer.

The SOGP was Portsmouth’s shadow government, wheeling and dealing while playing with federal taxpayer dollars, doling out millions of dollars with little oversight. The American Savings Bank was not much better. In 2005, in a move that made it possible to avoid the kind of paper work and scrutiny that goes with being a publicly held company, ASB went private, buying out its shareholders. Since then, as a private company, its financial operations have become somewhat inscrutable, like they were at AIG, Bear Stearns, and Lehman Brothers. Why in the world would ASB grant a $187,000 mortgage to a business that time has proved  had absolutely nothing going for it? In 2005, ASB had granted a mortgage for a house at 2828 Willow Way for which Jones paid $192,000. The auditor had it valued at $142,820. That mortgage was apparently farmed out to CoreLogic, formerly First American, in Westlake, Texas, about which I will have more to say in another post. Jones has got to be the most highly leveraged person in Portsmouth city government. The question at the moment is will he join those other shady members of city government, Kalb, Haas, and Malone, in filing for bankruptcy? That is not a question the lapdog will answer.

Crispie Creme has gone belly-up as the crooked For Sale sign proclaims

Big Brother

Chapter 6: Big Brother

“As a lay person you would not be able to understand the science of my experiments at Harvard,” the doctor began his explanation to Madelyn.

“What experiments?

“They involved Heck. That’s all I want to say.”

“Like a guinea pig?” she asked.

“Yes, you could say that, although Heck wouldn’t like the analogy. Would you, Heck?” The doctor looked at the rat, who tilted his head, like a curious cat, squinting up at the doctor while rubbing his nose with his paws. “Fruit flies are very useful for experiments and so are guinea pigs,” the doctor continued. “But for my purposes only Rattus norvegicus, would do. Not as cute as the guinea pig, perhaps . . .” Heck made a tiny squeaking noise. “Have I hurt your feelings? I’m sorry, Heck,” the doctor said.

“He understands you?” she asked. Up to now she had thought of the doctor as being eccentric. Now she wasn’t sure what to think.

“He understands me, of course,” the doctor said proudly. Then he added, in a show of bitter humor. “He’s got an IQ well above the average Democrat.”

 “But why did you bring him to the office?”

“I received a warning that the authorities might be paying a visit to the clinic today.”

“Today?” She couldn’t believe he had waited until now to tell her. She had felt nervous when she had arrived at the office that morning because of renewed rumors circulating in the town about an imminent crackdown on the so-called pill mills.

“That’s right. Today.”

“Then why did you bring the rat here.”   

“Because I’m sure they want me to think they’re coming to the clinic when what they really plan to do is to go to my home.”

“But how would they get in?”

“My landlady would let them in. She’s easily intimidated.”

“She’d let them in?”

“With alacrity.”

“With who?”

“In a heartbeat.”

 “But what would they be looking for? What records we have are in my computer.”

“They’re not after records.”

“Then what?”

“Why, Heck, of course.”

“What would they want with Heck?” Puzzled, she looked from the doctor to the rat and back at the doctor.

“The ‘rat’ as you like to call him is the key to everything.”

“What do you mean?”

“He’s the answer.”

“To what.”

“To the single greatest threat to freedom in the world.”

“What threat?”

“Big Brother.”

“Big Brother?”

 “Precisely,” he said.

“Who’s  Big Brother?”

“You’ve never heard of Big Brother?”

“I don’t think so.”

Shaking his head and turning to the rat, the doctor said,   “What do you think of that, Heck? She’s never heard of  Big Brother.” As he continued shaking his head slowly,  Heck tilted his head and peered up at him curiously while the kittens looked down on what was happening with the  look of total incomprehension.

“Haven’t you read this pamphlet?” he asked her, picking up  one from the little pile he kept on his desk. “I distinctly remember giving you one, and one for your daughter.” The doctor opened it to one of the illustrations, showing a menacing Big Brother figure. He held it up to show her, then he laid it down on the desk, leaving it open to the same page, which the rat edged over to and looked down at, as if it  could read or at least appreciate pictures. Madelyn felt stupid. Was it possible the rat had not only heard of Big Brother but had also read about him? It couldn’t be, she told herself. She had a tee shirt, which she had worn  only once, to a Fourth of July fireworks display.  REDNECK AND PROUD OF IT! But she never could have imagined encountering a rat smarter than she was, a  show-off, smart-ass rodent which, if it had a tee shirt, would probably read SMARTER THAN A REDNECK!

“But what does the rat have to do with Big Brother?” she asked.

“Heck and I made a remarkable discovery.”

“About what?”

 “About Oxycontin,” he said.

“What about it?”

“Oxycontin is the diabolical means by which the American government is attempting to enslave us.”

“Enslave us?”

“Yes, by eliminating all resistance to Big Brother.”

 “But why are you prescribing it if it’s diabiblical?”

“Diabolical,” he corrected her. “Because the ends justify the means.”

Talk about ends and means always passed over her head, as it did now. She didn’t want to show her ignorance by asking him what he meant. She just looked at him blankly.

“I’ve discovered how to turn  Oxycontin into  Anti-Contin,” he explained.

“Anti-Contin?”

“Yes, an antidote to Statism.”

“Statism?” Statism was not something she had heard of before.

“What the Democrats believe in. ‘That government is best which governs most.’”

“That’s statism?”

“That’s right. But it won’t be much longer before I have enough money to   manufacture it in Mexico.”

“Mexico?”

“Yes. I plan to open a clinic there.”

“But you’re  not  prescribing patients Anti-Contin now?”

“No, not yet.”

“What’s so special about it?”

“It’s derived from  Heck’s urine.”

“Heck’s urine? Hoy shit!” she exclaimed.

Madelyn looked at the rat on the desk, at the kittens on top of the file cabinet, at her own fun-house reflection in the doctor’s thick Coke bottle glasses, asking herself whether this was a bad dream or, worse still, a drug induced hallucination. At the moment, she believed she possessed the ability to feel the agony of the people outside in the line, most of them, like herself, who didn’t understand means and ends or statism from Adam.

 “A rat’s urine! That sounds disgusting,” she said. 

“That’s what you all say.”

“All?”

“All who are under the influence of Big Brother.”

 “A rat’s urine! Yuck!”

“Not a rat’s urine. Heck’s urine.”

“What makes Heck’s urine so special?” she asked sarcastically.

“You could never guess,” he said, looking  up at the photo of Hayek on the wall before pronouncing solemnly: “Heck now shares the DNA of the greatest mind of the twentieth century.”

 “Up to now, I must have been blind as well as addicted.”

“What?” the doctor asked in disbelief. “You addicted, too?”

 “What about the DNA business?” she asked.

 “I obtained a lock of the Great One’s hair through extraordinary luck. If I wasn’t a man of science, I would say that providence had a hand in all this, even if it’s only the invisible hand.”

“The invisible hand?”

“The the invisible hand of the free market.”

“I don’t know what you’re talking about.”

And neither did Oxy and Contin, who were mewing and walking in circles on top of the file cabinet.  The doctor looked at his watch. “Madelyn, we have patients outside  in the throes of Statism. They’re waiting for us.”  

“I’m very much aware of them, Doctor,” she said, feeling  very attuned to them as this moment.

Are you a Democrat?” he asked.

“What’s that got to do with anything?”

“Excuse the non sequitur,” he apologized.

“ I’m not into politics,” she said.

“Whom did you vote for in the last presidential election?”

“Which presidential election?

“You didn’t happen to vote for the Black Big Brother, did you?”

“I don’t remember voting,” she said.

“You see, Heck, it’s the familiar vicious circle. One addiction leads to another, and people end up voting for  Big Brother.”

There was the sound of loud male voices with unfamiliar accents in the outer office. Huck flicked his tail nervously and the  kittens became even more agitated.

“Who’s out there?” the doctor shouted, bringing his little fist down hard on the desk. Panicked, the rat jumped off the desk and scrambled for a place to hide. Oxy overcame his fear of heights and jumped from the file cabinet  and Contin instinctively followed him. A cat may always land on its feet but the kittens tumbled over when they painfully hit the floor.

Suspecting it was a robbery, the doctor shouted, “I demand to know who’s out there?” A tense looking man in a gray suit and a striped necktie appeared suddenly in the door to the office. Behind him, looking over his shoulder, stood  a a square faced state trooper.

“Doctor Gudenoff?” the man in the suit asked.

“Yes, I am Dr. Gudenoff,” he answered defiantly. 

“I’m Special Agent Smith with the U.S. Drug Enforcement Agency.” He opened a wallet and flashed his DEA badge.

“Your Big Brother badge doesn’t impress me Special Agent Smith, do you understand?”

“This is Captain Porter of the State Police,” Smith said. “We have a warrant to search your clinic.”

“Oh, you, do you?” the doctor said contemptuously.

 “Doctor, do you have a key to the  closet in the outer office?” the trooper asked.

“No,” the doctor said sharply. “You’ll have to ask my office manager.”

Madelyn reached into her blouse pocket and took out the key. It was only then that she remembered where her purse with the Oycontin was. She kept a pair of galoshes in the locked closet. Last night she had heard about an imminent crackdown on the pain clinics. After she opened the clinic that morning, she had put her purse in the right galosh of the fur-lined pair she kept in the closet. What she was thinking as she handed the key to the trooper was that she might lose custody of Barbie when they discovered she had forged prescriptions. They would probably lock the doctor up  for a long time. She had heard that it was the case with doctors that, with the complicity  of their colleagues, who are eager to maintain the priestly status or their profession, that they got away with malpractice, if not murder. But she doubted the doctor would get away with his promiscuous  prescribing of Oxycontin. In the time she had worked for him he must have prescribed as many pills as the McDonald’s sign said it had sold hamburgers. But what would they do to her for having forged prescriptions? At that moment of uncertainty, she would have given anything for an Oxycontin and so would Oxy and Contin, cowering in a corner, as would also the doctor and his pet rat, who were as hopelessly hooked on the drug as anyone in the town. The rest of the country was about to learn  that it was ground zero of Oxycontin addiction in America.

When the doctor and Madelyn were ushered into the outer office by state troopers, Oxy saw his chance of escape. The front door was half open and he scooted for it, with Contin right on his tail and Heck not far behind. 

“Your Big Brother badge doesn’t impress me Special Agent Smith, do you understand?”

Previous chapters

1 http://rivervices.blogspot.com/2010/12/new-years-tale.html

2 http://rivervices.blogspot.com/2011/01/oxy-contin-in-line-at-pain-clinic.html

3 http://rivervices.blogspot.com/2011/03/oxy-contin-meet-barbie.html

4 http://rivervices.blogspot.com/2011/04/4-oxy-and-contin-in-doctors-office.html

5 http://rivervices.blogspot.com/2011/05/from-zanesville-to-zanzibar.html

Devil Shredders

Paper Shredders at work at the Marting Building


The Devil Shredders

“The Devil is running Scioto County.” Governor John Kasich

The devil’s not in hell,

 He’s alive and well

And has been for quite a spell

In our drug-ridden county.

Right now we’re dreading

The devil’s been shredding

Not socks, smocks, and bedding

But documents evidentiary.

Free of all impediments,

The devil’s shredding documents

In all the various departments

Of Marting’s, a virtual mortuary.

“Sensitive documents” galore,

They’re stored on every floor

Of the former department store

That stands now in infamy. 

Finally they found a use

For that poor architectural excuse,

For that useless, decrepit moose

That crooks foisted off on the city. 

That’s were they hid the evidence

That belies their claims of innocence

The notorious ladies and gents

Whose only language is perjury:

Bauer, Baughman, Kalb, Malone—

Clay, Neal, Julia, Carol—the sly flyblown

Souls, the devil’s very own—

Birds of a feather in hell’s aviary. 

Beneath the leaking Marting roof,

The devil’s shredding the proof—

The crooked Foundation head, aloof,

The clerk who goofs off at the grocery,

The shyster-meister of  petty crime,

All slithering in political slime

All groveling in the dregs of time,

The devil shredders of immorality.

                   Robert Forrey

Public Employee Unions: the Democrats’ Achilles’ Heel?

Masthead of the International Association of Firefighters, of which the Portsmouth Fire Dept. is Local 512

Governor Scott Walker’s win in the Wisconsin recall election on  June 5th reflects the serious problem  public sector unions pose for Democrats and for private sector unions as well. Walker announced a year ago that he would attempt to reduce Wisconsin’s $137 million deficit by, along with other measures, denying collective bargaining rights to  public employees and requiring them to pay more for their health insurance and pensions, because the cost of those contributed heavily to the deficit. I’m not an  authority on the budget crisis in Wisconsin,  but I do know something about the budget crisis in Portsmouth. I venture to say that  the financial crisis in our fair city is partly  the result of who the public sector unions negotiate contracts with: namely, the politicians, the elected public officials who know they  will not be reelected if they alienate  public employees by hard-nosed bargaining with their unions. The biggest incentive Portsmouth politicians have is saving  their own skin rather than the taxpayers’ money. They want above all to get reelected and put off competing in the private sector where most of them have  failed miserably.  Three of the current holders of public office—the unelected mayor David Malone, the president of city council, John Haas, whom the charter designates as next in line to be mayor, and councilman Jim Kalb, a former mayor—all three of these jokers mishandled their personal finances so badly that they ended up declaring  bankruptcy (click here). These bankrupts mishandled their finances as badly as Rick Duncan does the city’s waste water. They claim to know how to negotiate with public employee unions on behalf of the taxpayers. Heaven help us!

Firefighter Anonymous

The public sector union representing the Portsmouth Fire Department has been especially adept at taking advantage of Portsmouth’s incompetent and dimwitted politicians. Late in 2011, the firefighter’s union, Local 512 of the International Association of Fire Fighters (IAFF), was rumored to be asking for a 12.5 percent increase over the life of the next contract, and asking for that increase in spite the city and the country being in  greatest financial crisis  since the Great Depression. There are those who say the Portsmouth Daily Times has changed its spots, that it is no longer the mouthpiece of the corrupt clique that controls Portsmouth economically and politically. But on 11 November 2011 the PDT played its familiar game of pretending to be impartial when in reality it was doing its usual dirty work. I refer to Frank Lewis allowing a member of the Fire Department to anonymously express his biased views on the contract negotiations between Local 512 and the city. Just as the PDT now allows anyone, like the ubiquitous crackpot “A Citizen,”  to post comments anonymously in response to stories in the PDT, this Anonymous Firefighter was allowed to present to PDT’s dwindling readership, without challenges or questions, Local 512’s case for the extravagant 12.5 percent pay increase they were seeking.   What the Anonymous Firefighter argued was that a 12.5 percent increase was chicken feed and could hardly make up for the financial sacrifices the firefighters had made and were still willing to continue making in the contract being negotiated.  “Our [pay]checks were actually going backwards with the 12.5 percent increase,” the Anonymous Firefighter told Lewis. The Anonymous Firefighter implied Local 512 would have had to ask for a lot more than 12.5 percent to make up for the financial sacrifices the firefighters had already made, such as foregoing the cash payments they received for unused sick days and accepting less of an annual allowance for clothing, which if I recall correctly they previously were able also take a cash payment for if they didn’t purchase new clothing. 

Mayor un-elect Malone

The firefighters didn’t get the 12.5 percent increase. They got instead the so-called Safety Levy (i.e., tax increase), the income from which was specifically designated to shore up the finances of the Portsmouth Fire and Police Departments. The Anonymous Firefighter complained about Mayor Malone’s unpredictable role in the contract negotiations. Malone “flat-out said yes in one meeting. And the very next meeting said no,” the Anonymous Firefighter told Lewis. It is true that  Malone,in the tradition of Portsmouth mayoral dunces such as Bauer and Kalb, often does not know what he’s doing,  but in the end you can count on him to figure out which side his bread is buttered on. Malone knew he could not afford to lose the support of the public employees,  the police and fire departments especially, which is why he made a personal contribution of $1000 dollars to the committee that was campaigning for the passage of the so-called Safety Levy on behalf of police and fire department employees. Why would a mayor spend a thousand dollars of his own money to support a tax increase for his constituents? Because he knows he has more to fear from public employees than from the public, and from the police and particularly the  fire department, which blatantly exploited the “safety issue” among senior voters in the Safety Levy campaign, especially at places like the Hill View Retirement Center, where firefighter Timothy Alger, now Lieutenant Alger, was reportedly among those firefighters seeing that scare-tactic anonymous flyers (click here)were put, possibly illegally,  into the mail slots of Hill View residents. In a letter to the PDT (5 Dec. 2011), Alger expressed his strong opposition to  city councilman who asked  if there should be a change in the city charter, which currently states the  number of firefighters can not fall below 44, a restrictive condition for any city charter to have, but especially a city in fiscal crisis whose population has been steadily sinking for half a century and is now less than half of what it once was.

Future Portsmouth mayor and chief contract negotiator Rev. Malone, with shades and bible, 
preaching  on steps of Municipal Building 2007 (click here)

The financial “hardships” that the Anonymous Firefighter claims Portsmouth firefighters have had to endure are of the kind that can infuriate unemployed workers in the private sector, who lost in the Great Recession of the past six years not part of their clothing allowance but their livelihood itself, and if anything like these “hardships” of Portsmouth firefighters took place with public employees in Wisconsin, it is not hard to understand why some Democratic union members voted against recalling Governor Walker last week, and it will not be hard to understand if some Democratic private sector union members do the same thing and vote Republican rather than Democratic in next November’s presidential election.  On 8 June, 2012, the International Association of Fire Fighters, the parent union of Portsmouth  firefighters, endorsed the reelection of Obama. The endorsement by a public employee union is a two-edge sword which probably will cut opposite ways in the November elections. Public employee unions may be able to negotiate contracts very effectively with mayors and city councils,  but the disparities in job security and  pensions and benefits between public and private employees is so glaring (though not in the case of public school teachers: click here) that public employee unions may be the Achilles Heel that will cost the Democrats the White House in November.