Justin Elliott, ProPublica - Economic Opportunity Zones

Justin Elliott, ProPublica
Economic Opportunity Zones

 

Here are two particularly heinous examples of “Stupid Congressional Tricks:” One: federal programs that promise both private enrichment and public benefit, but include no mechanisms for public assessment and oversight over the real-world balance of benefits and enrichments.

A fine example of that would be the Opportunity Zones program tucked into President Trump’s signature 2017 tax law.

As sold, opportunity zones were supposed to be for poor and underdeveloped neighborhoods in need of new investors for new projects to make things better; for the benefit of the city and ideally for present residents of the affected neighborhood. The opportunity was to take advantage of three big tax breaks for investors.

But, our guest, investigative reporter Justin Elliott of ProPublica has shown, some of the biggest opportunities were in zones that didn’t qualify and that weren’t poor neighborhoods at all.  What they sometimes were was neighborhoods where politically-connected billionaires had placed big bets, buying up property for years, mapping out big changes for the area, and now, mopping up millions in tax benefits for their investments and projects that also shouldn’t qualify because they weren’t new.

But, down the road, will this have turned out to be a good deal?  Will the tax abatements and forgiveness have produce a commensurate neighborhood renovation and how will it have affected longtime residents?

The law Congress passed in 2017 will make it hard to answer those questions because it requires no public reporting on the tax breaks, who got how much? Nor any assessment of what the investment we taxpayers subsidized actually produced.

The law itself seems to tell the mega-rich for whom it was designed: “Take this public money, but don’t tell the public anything more about it.”  Stupid Congressional Trick #1.

But I promised you two, and here’s the second: laws that set down big rules and leave the little regulations for later.  A notorious example of that is the bigtime Obama-era financial services reform act known as Dodd-Frank that got nibbled considerably down to size as the details of reformed regulations were spelled out.

Another notable case … oh, you guessed it … the exception-filled rulebook for Opportunity Zones has existed for two years, but the regulations that will define how the rules are followed are still a work in slow, halting progress.

In Detroit and Baltimore, exceptions to the rules qualifying zones and dysfunctional regulation helped make old investments by billionaires Dennis Gilbert and Kevin Plank more valuable to them and less productive for the federal budget. Obscuring the sordid details from public examination is another opportunity offered to investors.

 

READING ROOM

Justin Elliott has been a reporter since 2012 with ProPublica, where he has covered money and influence in the Obama and Trump administrations, the American Red Cross and TurboTax maker Intuit. He has produced stories for outlets including The New York Times and National Public Radio, and his work has spurred congressional investigations and changes to federal legislation.

Among other honors, his work has been awarded an Investigative Reporters and Editors award and, with the Trump Inc. podcast team, a duPont-Columbia award. He earned a bachelor’s degree from Brown University in history and classics.

https://www.propublica.org/article/trump-inc-podcast-one-trump-tax-cut-meant-to-help-the-poor-a-billionaire-ended-up-winning-big

https://www.propublica.org/article/how-a-tax-break-to-help-the-poor-went-to-nba-owner-dan-gilbert

https://davemarash.com/2017/04/11/tuesday-411-justin-elliott-pro-publica-ethical-conflicts-trump-white-house/

https://davemarash.com/2017/02/15/wednesday-215-justin-elliot-pro-publica-president-trump-seems-like-proposed-bayer-monsanto-merger-maybe-little-much/

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