A poll released today by Fairleigh Dickinson University’s PublicMind shows that voters in New Jersey are strongly opposed to the $350 million bailout of Morgan Stanley’s casino in Atlantic City. According to the poll, 27% of voters approved of the proposed tax rebates, while 60% were opposed. While politicians of both parties are strongly pushing for the bailout of Morgan Stanley, the opposition of voters to the bailout is bipartisan, according to FDU:
Opposition is shared by 61% of Democrats and Republicans, as well as 55% of self-described liberals, 59% of conservatives, and 66% of moderates.
And while promoters of the tax break claim that the casino will be a salvation for those in South Jersey, voters disagreed. “Voters in South Jersey are just as likely to oppose it as the rest of the state,” the poll concluded.
As we wait to see if Governor Christie will sign the bill that takes away the voter’s right of referendum on a proposed $300 million tax break for Morgan Stanley’s casino, two excellent new articles came out about the issue.
The prime backer of the half-finished Revel casino, Morgan Stanley, has put together a financing deal that relies on funding from the Chinese government. Yes, you read that right. The geniuses in Trenton are preparing to give a giant grant to a consortium of commies and Wall Streeters.
But as Doherty points out, both the Chinese and Morgan Stanley have plenty of money at the moment. Morgan Stanley got $10 billion in bailout funds, he said, so there’s no reason they can’t finish the project on their own.
Meanwhile, the Philadelphia Inquirer has a new article discussing the “furor” over the involvement of the Chinese government in Morgan Stanley’s casino project.
The brave politicians in the NJ legislature have, to no one’s surprise, passed a law that takes away the rights of voters to subject the Morgan Stanley taxpayer bailout to a vote. According to the Associated Press, “New Jersey voters would not be able to have their say on projects paid for by state economic stimulus funds under a law passed lawmakers this week. The state Senate and Assembly on Monday passed bills that would prohibit residents from voting through local referendums on projects using state stimulus money.” Now its up to Governor Christie to see where he stands on the tax rebates for Morgan Stanley, and taking away our right to vote.
Hopefully the Governor will listen to Senator Mike Doherty, who made a strong statement against the Morgan Stanley bailout. Listen to his statement here: senate.mp3
Governor Christie is proposing to eliminate property tax rebates in 2010, the Philadelphia Inquirer reports. Last year, 1 million homeowners in that state received property tax rebates of between $670 and $1,300. The move by Christie will reportedly save the state $850 million.
While NJ politicians are working hard to roll back tax rebates for the middle class, one needy taxpayer by the name of Morgan Stanley is in line for $300 million in tax rebates for their casino in Atlantic City. Legislators are meeting today to try and stop an effort by some pesky voters to put Morgan Stanley’s tax rebate up for a vote.
So no tax rebates for the middle class, but tax rebates for a bank that received $10 billion in bailout funds from the U.S. taxpayer. We really can’t make this stuff up.
When politicians desperately try to quash public votes on tax subsidies for wealthy corporations (like the $350 million tax break for Morgan Stanley’s casino), and bureaucrats refuse to disclose the public records about those subsidies, what is a citizen to do?
Yesterday, a group of citizens filed two lawsuits. The first lawsuit says that Atlantic City politicians can’t simply throw a valid referendum off the ballot because they don’t like it. The second lawsuit says that Atlantic City needs to comply with the State of New Jersey’s Open Records Act. It’s a shame that voters have to sue to enforce their rights, but given Atlantic City’s reputation for open and clean government, are you really surprised?
Our friends at Morgan Stanley had a tough week defending the $3oo million taxpayer rebate for their half-built casino in Atlantic City. Let’s recap:
Last Sunday, the Asbury Park Press ran a front page story outlining the pros and cons of the tax rebate for Morgan Stanley. Morgan Stanley declined to comment.
Then on Wednesday, a group of hearty citizens protested in front of Morgan Stanley’s offices in Jersey City. In response, backers of the Morgan Stanley bailout tried a new tact: pretend Morgan Stanley isn’t involved in the casino (a claim we quickly debunked).
On Thursday, supporters of tax rebate for the Morgan Stanley casino started publicly wringing their hands over NJ Governor Christie’s relative silence on the issue. According to the Press of Atlantic City, “supporters of the plan admit they are now worried about the project’s delays and the governor’s persistent lack of commitment to the project.” Kevin Descantis, the CEO of Morgan Stanley’s casino investment vehicle, told the Press that “his biggest challenge is educating the Governor’s Office in the midst ‘of all this confusion.’ He said Revel officials have been working to get a meeting with Christie or others in his office, but have not heard back yet.” You can also “educate” the Governor by emailing your views about the tax rebate.
And yesterday, two editorials blasted the bailout. Bob Ingle, the senior political columnist for Gannett New Jersey newspapers, said it better than we could:
“Morgan Stanley, which got $10 billion in federal bailout money, put together a development group that wants us to fork over more than $350 million in tax breaks to finish an Atlantic City casino. Your lawmakers are trying to kill an effort to let the people decide…The Atlantic City Council voted in December to move ahead with the tax breaks but unionized casino waiters and bartenders called Unite Here gathered enough signatures to put it before the voters in a referendum.
This caused mayhem in Trenton. You can’t have the people who pay the taxes deciding how to use them — that’s the kind of crazy thinking that got Chris Christie elected governor. So, Sen. Ray Lesniak, D-Union, and champion of the little guy, cooked up a bill, S-920, that would ban referendums on local development ordinances. Take that, you sorry little taxpaying troublemakers. If the Revel deal is such a good thing for Atlantic City, why not trust the good voters there?
The Asbury Park Press also strongly editorialized against the Morgan Stanley tax rebate, calling it “beyond the pale.” They wrote that “Gov. Chris Christie should reject the giveaway to Morgan Stanley, which recently paid off $10 billion in federal bailout money and had enough left over to award $14.4 billion in bonuses and compensation to its employees.”
The backers of the tax break for Morgan Stanley’s casino in AC have a brand new strategy to gain public support for their bailout: pretend that Morgan Stanley isn’t involved. Kevin DeSanctis, the CEO of Morgan Stanley’s casino investment vehicle (called Revel Entertainment), told the Press of Atlantic City that “Revel made the application, not Morgan Stanley. There’s just too much confusion out there. The point is being lost.” And according to the Associated Press, “Revel officials said they, not Morgan Stanley, are in line for the state tax incentives.”
Hearing this, we thought of the famous saying by the poet James Whitcomb Riley: “When I see a bird that walks like a duck and swims like a duck and quacks like a duck, I call that bird a duck.” And boy does Morgan Stanley sure quack like a duck. Consider the following:
Morgan Stanley disclosed that it had an ownership stake in the casino in a 2007 public filing required under the NJ Municipal Land Use Law (see chart). The document clearly shows Morgan Stanley as owning a significant stake in Revel Entertainment through a chain of limited liability companies and corporations. Morgan Stanley even lists their Revel investment (called Ventura Holdings) in their list of subsidiaries filed with the Securities and Exchange Commission in 2009.
The application for the $300 million tax break was filed by Revel Atlantic City LLC (a wholly owned subsidiary of Revel Entertainment). According to this LLC’s last filing with the State of New Jersey, the President of Revel Atlantic City LLC is Edgar Sabounghi. If you use this nifty little thing called Google, you find that Mr. Sabounghi is apparently employed by Morgan Stanley (according to numerous SEC filings, the last one dated 8/17/2009). Mr. Sabounghi also shows up on other Revel related entities, with his address listed as 1585 Broadway, New York, NY. Guess which global financial firm is located at 1585 Broadway?
Morgan Stanley not only appears to own a major stake in Revel, property records disclose they have been financing the project. According to these records, Morgan Stanley Senior Funding, Inc has the first, second, and third mortgage on the casino.
According to the Associated Press, Revel “won’t disclose the size of [Morgan Stanley’s] stake” in the casino project. Why are Revel officials so reticent to publicly disclose the owners of the casino? And more importantly, why aren’t NJ officials and politicians demanding this information before they dole out $300 million in tax rebates?
A new report from the State of New Jersey shows that property taxes for New Jersey homeowners have risen by 70% since 1999. In 2009, the average property tax bill was $7,281 compared to $4,329 in 1999. Property taxes rose 3.3% compared to last year.
Given that property taxes just continue to go up, wouldn’t it be great if you could get 75% of future property tax increases returned to you? You can! It’s called the NJ Economic Stimulus Act. See below if you qualify:
What’s the difference between the United States and China? In America, we have democracy and respect for basic human rights. China does not. Well, not so fast.
The New Jersey Legislature is furiously working away to take away the voter’s right of referendum. They don’t want citizens voting on the taxpayer bailout that politicians have arranged for a casino owned by Morgan Stanley. Perhaps it is just a wild coincidence, but the Peoples Republic of China has reached a tentative agreement to help finance and build the casino. Is it starting to make sense?
If not, you’ll probably agree with John McLaughlin. John is a New Jersey voter who went to the legislature to testify against their efforts to take away our vote. Listen to John: mclaughlin.mp3
According to a new report issued by the New York State Comptroller, compensation at Morgan Stanley and two other banks rose 31% in 2009. Average compensation at these banks now averages at the barely sustainable level of $340,000 a year. Meanwhile, wages and benefits for the average worker increased only 1.5% in 2009, the lowest increase tracked by the Department of Labor since 1979.
Now, there are those who continue to whine about the soaring compensation for banks like Morgan Stanley that have received taxpayer bailouts. But if you can get the State of New Jersey to provide you with a $300 million tax subsidy for a half-completed casino in Atlantic City that may be built and financed by the Peoples Republic of China, then we say that those clever bankers at Morgan Stanley deserve every penny.
Apparently, taking away the right of voters is a state emergency. Yesterday, the New Jersey State Senate approved an emergency resolution to push through a bill that takes away the right of referendum for voters in the state. What’s the big emergency? The Democrats and Republicans are extremely concerned that Morgan Stanley gets a $300 million taxpayer bailout for their casino in Atlantic City, and they don’t want the voters to have a say on the project. Why? According to Senator Whelan, the casino is a “spectacular beacon of hope.” New Jersey voters can’t be trusted to vote on the project because the “beacon of hope” is so blindingly bright. It’s simply not safe.
The vote was 36-0 in favor of the “emergency” resolution, which kind of reminds us of those “elections” they held in the old Soviet Union or Communist China. Oh wait, the Peoples Republic of China has reached a tentative agreement to build and finance Morgan Stanley’s casino, so it kinda makes sense. We don’t want any democracy to inconvenience the Peoples Republic of China.
Meanwhile, Paul Mulshine of the Newark Star Ledger has a scathing editorial against the project. Mulshine wrote that “[t]his deal is great for the developers, but there’s nothing in it for the taxpayers.”
On February 1 2010, the New Jersey Senate held a hearing on Senate Bill 920. This bill, along with the companion bill in the Assembly, seeks to strip the existing right of voters to put proposals like the taxpayer bailout of Morgan Stanley to a vote of the people. Why do New Jersey politicians want to silence voters? Senator Jim Whelan (D) said it quite plainly at the February hearing on the bill:
“What this bill does is it ensures to the developer, it ensures to the financial community, that the deal that they make, is the deal that they make.” Got it? Well, one pesky citizen at the hearing by the name of Seth Grossman of the group Liberty and Prosperity innocently asked what deal had been made. The impertinence! Grossman was promptly ejected from the hearing by Senator Lesniak, the Chair of the committee, for having the gall to ask the question. Boy, those politicians sure get testy when voters start asking questions. Listen to the exchange between Senator Lesniak and Grossman — Grossman vs Lesniak
Our friends at Americans for Prosperity have launched a new radio ad condemning the special tax breaks for Morgan Stanley’s casino. Click here to the hear the ad!
Apparently, Governor Christie is “skeptical” about the proposed $300 million Morgan Stanley tax break, according to the Asbury Park Press. The paper reports that the Governor had this to say about the proposed bailout:
“It’s interesting that they’re looking for a tax break. I don’t know that’s something that’s necessary. I would be skeptical about that. I don’t want to say no outright, but I’m going to be Missouri on that one — they’re going to have to show me why that’s absolutely necessary and convince me. So paint me skeptical on that.”
While Morgan Stanley works on their presentation for the Governor showing why they need a tax break, they are also spending alot of time explaining their bonus and compensation structure. According to the Wall Street Journal, Morgan Stanley is facing a barrage of criticism from shareholders over the company’s high compensation. The CEO acknowledged that compensation was at a “historic high,” but he promised it was at a level that “nobody on my management team…will ever see again.” Honestly.
When a group of citizens gathered 1,700 signatures on a referendum petition that would require a public vote on the Morgan Stanley casino bailout, politicians on both sides of the aisle quickly swung into action. In the New Jersey State Senate, two Democrats – Senate President Stephen Sweeney and Senator Raymond Lesniak – proposed legislation that would take away the people’s right to vote on the Morgan Stanley bailout. Then two Republicans — Assemblymen John Amodeo and Vince Polistina — proposed identical legislation in the State Assembly. Just like the federal bailout of banks in 2008, its great to see Republicans and Democrats working together again for bank bailouts! I mean it would be irresponsible to, gulp, allow voters to actually vote on whether the State of New Jersey should bailout Morgan Stanley, wouldn’t it?
Today, at 2:00 p.m, you can listen to Amodeo and Polistino justifying their attempt to take away the voters right to referendum. Go here to listen to their hearing on the legislation, and click on the Listen hyperlink for the Commerce and Economic Development committee.
In 2006, the Wall Street Journal reported on Morgan Stanley’s bright idea to “boost risk and profit” by getting into the casino business, including a casino in Atlantic City:
“There is an old joke that stockbrokers are just bookies with neckties. While Wall Street executives prefer to avoid overt comparisons between gambling and financial markets, some firms are putting more chips on casino-gambling investment as the number of states allowing such betting rises. Wall Street firm Morgan Stanley stands out, targeting casinos for investment as part of a year-old program to invest $2.5 billion of its own funds to boost risk and profit.”
The bold move into casinos (and other risky investments) was led by John Mack, the former CEO of Morgan Stanley from 2005 to 2009 (Mack is still the Chairman of the company). According to the New York Times, Mack “pushed the firm into fashionable areas like subprime mortgages, commercial real estate and leveraged lending. To emulate other banks like Goldman, he advocated using the firm’s own capital to pursue bigger, hairier trades.”
Of course, we all know how this story ended. Morgan Stanley’s reckless investments required a $10 billion bailout from U.S. taxpayers in 2008, as the firm teetered towards bankruptcy. And the company is seeking a taxpayer bailout for its risky investment in a casino in Atlantic City, requesting over $300 million in sales and property tax rebates.
With taxpayers getting a little cranky about all of these bank bailouts, some in Washington have begun to pay attention to Paul Volcker, the legendary former Chairman of the Federal Reserve. Volcker has waged a lonely battle trying to get politicians to adopt a very wild and crazy idea for bank reform: regulators should prohibit banks from making speculative investments that leave taxpayers on the hook.
Now the banking industry isn’t really crazy about this idea, and Washington politicians are hemming and hawing. And we have to agree because, darn it, banking isn’t fun if you can’t make crazy real estate bets without a U.S. taxpayer safety net to catch you, is it?
In 2008, Morgan Stanley received “a $10 billion bailout from the federal government” as a result of the company’s “errant mortgage bets and commercial property gambles that cost it billions of dollars and almost destroyed it.” [New York Times, 1/16/2010]
While most Americans are still waiting for their bailout, Morgan Stanley appears to be doing just fine. In 2009, the company reported $1.3 billion in profits, and spent $14.4 billion for salaries and bonuses for its employees. Thanks Uncle Sam!
Although Morgan Stanley is racking up profits again, there are still a few “property gambles” that didn’t quite work out for the company. And if a taxpayer bailout worked for Morgan Stanley the first time, why not try it again?
Under the proposal, Morgan Stanley’s casino would be given back 75% of its property taxes, sales taxes, and other taxes for twenty years. Is this deal available to the millions of New Jersey citizens who pay their taxes everyday? Of course not! If everybody got that deal, who would pay off New Jersey’s $8.9 billion state budget deficit (certainly not global financial institutions like Morgan Stanley)?
According to an analysis submitted to the State of New Jersey, Morgan Stanley predicts that the Revel casino will throw off $1.5 billion in cash in the first five years of operation. If Morgan Stanley expects the casino to be so such a cash cow, why does it need New Jersey taxpayers to bail it out? Why aren’t private investors lining up to lend the project money?
These are the questions taxpayers across New Jersey are asking as they struggle to pay their own taxes and survive the economic recession. NoMorganStanleyBailout.org believes that if Morgan Stanley should get a 75% rebate of its taxes, so should everybody else.
UNITE HERE is sponsoring a referendum to allow taxpayers to vote on the Morgan Stanley casino bailout. But there are other actions you can take including telling New Jersey politicians that taxpayers shouldn’t have to bailout Morgan Stanley again. Subscribe to NoMorganStanleyBailout.org to get the latest info on Morgan Stanley’s audacious tax grab.
According to a recent study, New Jersey homeowners pay on average the highest amount of property taxes in the United States (and the second highest rate as a % of property value). What if we told you that for the next 20 years the State of New Jersey would give you back 75% of your property taxes under an exciting new government program? You’d say “Where can I sign up?,” right? Well, unfortunately this program is not available to hard working middle class homeowners in New Jersey, but it is available to global financial institutions like Morgan Stanley (and their casino investments in Atlantic City).
So what is a struggling homeowner to do? We suggest you start calling yourself “Bank of Jimmy” or “Goldman Jane” or “CitiFred” and apply for the program anyway. What can it hurt?
A poll released today by Fairleigh Dickinson University’s PublicMind shows that voters in New Jersey are strongly opposed to the $350 million bailout of Morgan Stanley’s casino in Atlantic City. According to the poll, 27% of voters approved of the proposed tax rebates, while 60% were opposed. While politicians of both parties are strongly pushing for the bailout of Morgan Stanley, the opposition of voters to the bailout is bipartisan, according to FDU:
