Financial pornography, former Governor George Pataki – and the money he paid to thank big companies for firing New Yorkers.

Every so often you come across an old story that was so amazing and yet so under-publicized, it seems worth bringing up all over again.

Just that kind of story has to do with payments – usually in the double-digit millions – that New York State gave out to huge companies under just-retired Governor George Pataki .

Why were they paid the money? It was a form of corporate welfare. They either did nothing for it, or took the dough as an advance thank-you for putting New Yorkers out of work.

HEY, YOU CAN’T MAKE THIS STUFF UP

Allow me a bit of diversion here into matters sexual and pornographic.

Years ago, I chatted with a guy who during the 1960s was writing and publishing semi-pornographic books about the wild sexual mores of that era’s youth culture. He wrote books describing “open” marriages, S&M, the lifetyles of hookers, and wildly offbeat sexual kinkery.

“You do one or two tape recorded interviews with real people to satisfy the publishers this is real,” he told me, “and then you make the rest up to save time. Only you can’t really make it up, because if you can think of it, somebody else has also thought of it, tried it, and formed a club to do it with him.”

Some of the made up stuff that turned out after the fact to be real included electric shocking of submissive S&M partners and a wild orgy on a pile of creamcheese-smeared bagels.

What does this have to do with New York State? Let me explain:

Look in the Links sidebar to the right and above and you’ll find a link to Billionaires for Bush. That's the satirical website of some imaginary billionaires who encourage government to tax the poor and middle class and then give all the money to billionaires and big corporations. Turns out, you can’t make up this stuff, either. New York State’s outgoing governor had been doing this as a matter of policy. Call it "financial pornography."

SOME EXAMPLES OF PATAKI’S
FINANCIAL PORNOGRAPHY

I am indebted to Richard Rosenthal, a New Yorker City writer who likes to delve into these things, for providing me with much of the information below and Internet links to the rest of it.

It starts with a report by New York State Senator Franz S. Leichter called “Money For Nothing: The Failures Of The Corporate Welfare Programs During The Pataki Administration. More Than A Dozen Corporate Welfare Cheats Identified.”

You can read the entire report here: http://www.ctj.org/itep/gjny/biblio/LeichterNYS.htm

The program Leichter exposed was one of tax breaks for big business, supposedly instituted to create jobs in New York State. But as Leichter quickly points out, the program gave away bundles of bucks for nothing.

Leichter wrote: “While I have previously shown that the State's business incentives have failed to create jobs, this report reveals that more than a dozen companies have made significant layoffs a short time after receiving lucrative tax breaks other business subsidies from the Pataki Administration. A handful of companies have literally taken the money and run -- moving jobs out of New York after benefiting from financial incentives from the Pataki Administration.”

And it’s even more ironic than that. Leichter continued, “It is hard to square the Governor's support for corporate subsidies when he is fighting to drastically scale back funding for the State's social welfare programs. For instance, while Governor Pataki is calling for the end of the "cycle of dependency" for social welfare recipients, he has agreed to provide millions of dollars in subsidies to corporate giants like General Electric, IBM, General Motors, and Kodak -- even though they all failed to live up to past promises to create jobs after receiving State tax breaks.”

MORE TAX RIPOFF PORNOGRAPHY

Remember, this stuff is just like pornography; you can’t make it up. Here’s Leichter again:

“…the Pataki Administration pledged a hefty sum to Fisher Price, the Buffalo-based toy manufacturer, even though the company had just announced that it was laying off 700 employees. However, earlier this year, Fisher Price, which has taken advantage of State and local incentives for more than a decade, announced that it was laying off all but a handful of its remaining 300 employees and moving its operations out-of-state. Last month, the Pataki Administration agreed to provide Troy-based Garden Way with over $3 million in subsidies to keep its jobs in the State. But, just weeks after the deal was announced, Garden Way, which has eliminated 200 jobs in Schenectady over the past year, said that it would be laying off an undisclosed number of employees this summer."

Leichter’s 1998 list of Fortune 500 companies on the New York State dole included:
•Cablevision
•IBM
•Fisher-Price/Mattel
•Lockheed Martin
•Key Corp
•Kraft
•Kodak
•GM Super Steel
•Merrill Lynch
•Price Waterhouse
•Sprint

There were many smaller corporate welfare chiselers on Leichter’s list too, including high tech firms and a greeting card company.

‘THANKS FOR THE MONEY.
NOW GO JUMP IN THE LAKE!”

Among the horror stories: “…the Pataki Administration joined with New York City Mayor Rudy Giuliani in announcing a deal to provide Merrill Lynch with a $28.5 million incentive package, even though the Wall Street giant acknowledged that it was not contemplating a move out of New York. While the deal consists mostly of State and City sales tax exemptions to Merrill Lynch, the State will provide a $1 million ESD grant to the company.”

Have these companies no shame? Not in the slightest.

It’s important to keep all this information in circulation, simply because ex-Governor Pataki’s name has been mentioned in connection with future elective office. For example, some think this tax ripoff artist might be just the guy Republicans ought to put up for Vice President.

EXCUSES AND REBUTTALS TO EXCUSES

My thanks to Mr. Rosenthal, who helpfully provided all of the following quotes:

“Our decision to return downtown, which has been our home for more than 150 years, was not predicated on financial incentives . . . Once those financial incentives became available, we chose to participate, as did other companies.”
-- Tony Mitchell, spokesman for American Express, on receiving a $25 million grant to retain its workers in Lower Manhattan following the September 11th attacks, quoted in Newsday June 3, 2002.

“We never really talked about leaving Manhattan . . . We realize it's not the cheapest place to do business, but we're already here . . . We attract a high-quality workforce in New York City, and we think it's advantageous to be in the country's business and financial capital.”
--Greg Vahle, Pfizer vice president of human resources and services, quoted in Crain's New York Business June 23, 2003. (Rosenthal tells me Pfizer took a $46.1 million subsidy anyway.)

“It's a form of blackmail by the companies and a clear case of corporate welfare by the politicians. The state and the city could stop giving tax breaks, and companies would still want and need to be located in New York City.”
--Brian Backstrom, Vice President of Change-NY, a conservative anti-tax group, quoted in The New York Times, June 6, 1999.

“As a businessman I never made an investment decision based on the tax code... If you give money away I will take it, but good business people don't do things because of inducements.”
--Treasury Secretary Paul O'Neill at his confirmation hearing in January 2001.

“Any company that makes a decision as to where they are going to be based on the tax rate is a company that won't be around very long...If you're down to that incremental margin you don't have a business."
-- Michael Bloomberg, quoted in The New York Times, November 8, 2001.

CEO PORNOGRAPHY

Did I mention that at a recent secret meeting of Fortune 500 CEOs and Republican politicians at a New York Hotel, they all got nekkid and started licking whipped cream and cocaine off equally unclothed hookers?

No, no, no, that’s a joke. I’m only making up the stuff about naked politicians and hookers.

Or can you make this stuff up?