News, notes, and observations from the James River Valley in northern South Dakota with special attention to reviewing the performance of the media--old and new. E-Mail to MinneKota@gmail.com

Friday, April 11, 2014

New Angus and old bullshit



White Oak Financial Advisers, the major lender to the bankrupt Northern Beef Packers that is attempting to redeem its financial loss by buying back the plant for pennies on the dollar, paid Brown County the back taxes owed on the plant, $1,090,859.   County officials say that the money will be used to make  payments, due in December, on Tax Increment Finance bonds approved by the county.  

White Oak also announced that it has changed the name of the company to New Angus.  In the current fad of meat marketing, it has become essential to have the breed Angus somewhere in the product name.  One of the successful branding ploys has been the promotion by the Angus breed association of its cattle.  In most supermarkets, their beef brand will have Angus somewhere in its name.   That prevalent use has more to do with the way the American public has been conditioned into a state of gullibility than with the quality of beef or what kind of animal it actually comes from.  So White Oak adopts New Angus, which leaves one to ponder what is, in fact, new. 

The status of the TIF bonds has never received mention in the bankruptcy proceedings or the news reports on the demise of Northern Beef Packers.  They are part of the devious tangle of finance that has beleaguered the beef plant from its first musterings in Huron, to its fleecing of investors and supporters in Flandreau, through its brief but agonizing flourish and eventual death in Aberdeen.  When the enterprise was ended in Huron, there were rumors that the plan was quashed because the original promoters, Ridgefield Farms,  ran afoul of the good will of the governor.  But it has been impossible to separate rumor from fact because of the clandestine circumstances under which the government and businesses are allowed to scheme and collude under the protection of South Dakota Codified Law.  South Dakota has a tradition of collusion and corruption between government and business that rivals post-Soviet Russia.  The prevailing attitude in South Dakota  regarding business is that if someone is making money from some arrangement, it is smart and good business—no matter how many people are oppressed and damaged. 

The announcement of the payment of back taxes was made with the incoherence and verbal confusion that has been typical of any information put out about the beef plant scheme. On one hand, the payment of back taxes was announced with statement that they would go toward making payments on the TIF bonds.   On the other hand, at the same time, the chair of the Brown County Commision is quoted as saying, “The county has not been and never will be liable to make TIF payments to bondholders…That money has to come from extra money collected as a result of TIF.”  (Aberdeen American News," The New Angus angle," April 5, 2014.)

Which leaves the reader asking, so why are the back taxes being used for payments on the TIF bonds?  And how does TIF generate extra money to pay bondholders?  Especially when the plant is bankrupt and closed?

And the financial incoherence goes on.  And on.  And on. 

Generally, when the news media reports the details of a corporate bankruptcy, it assembles a list showing:
  1. All the money owed by the company;
  2. All the money paid out by the company;
  3. All the money received by the company.

Lists of money received will categorize and list the sources of all money invested in an earned by the company.  But the records of the financing schemes for Northern Beef Packers are incomplete, missing or otherwise unavailable, and totally incoherent.  They follow the South Dakota Golden Rule of doing business:  if you are a business in South Dakota, you don’t have to be open or honest.  The only thing you have to give a shit about is gold and schemes for getting it. 

The news story covering the New Angus plans substantiates how government officials endorse and obey that Golden Rule.  White Oak has not announced what it plans to do with the plant, leaving local officials to speculate that it will eventually process beef.  But officials are quoted as saying, “It probably doesn’t serve White Oak’s interest to divulge its plans right now.”

Of course the public and the taxpayers’ interest in all of this is not even mentioned.  Their role is to be quiet and eat the bullshit. 
                                                                                      

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