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

Tuesday, December 31, 2019

Corruption: we can grow it at home

We can sit among our snow drifts in northern South Dakota and cluck our tongues at the news coming out of Ukraine, which has seeped into the White House.  It is a tangled story of greed for power and money that  has our  culture in its coils like a python constricting a rabbit before ingesting it.  We can utter our disapproval of those remote tales of corruption as we pass through our little main street.  On our way to where?

We feel removed from those tales of venality.   The streets on which we conduct our mundane business of life seem quiet and calm.  But as we move through the streets of Aberdeen during this holiday season, there is a notable emptiness.  Three of the town's largest retailers are missing: Kmart, Shopko, and Herberger's. The mall has a few occupants and a few customers, but a forlorn atmosphere. It seems destined to join the trend of mall closings throughout the country.   The old Main Street downtown has consignment shops, spas, and vacant buildings.  Not much else.  When a restaurant closed recently, it gave as a reason that it was difficult to find employees.  The town is languishing.

As for the closing of the major retailers, internet commerce is given the blame.  The claim is that people are shopping online rather than patronizing their local merchants.  But Kmart, Shopko, and Herberger's were stores managed by large corporations.    When their closings were announced, they were all part of a series of store closings by the corporations which owned them.  In such cases, the implication is that the local stores are closed because they aren't doing well.  But the corporations never make the books of the local operation public.   In the closings of the past few years, some employees of the stores claimed that their local stores were making money, but the parent companies were not.  The decision to close the stores is made in corporate headquarters, and that's how business works.  If the company is not doing well, a successful store or two in its chain doesn't matter.  The company will do what headquarters wants.

The communities where large stores are closed are often left not knowing whether they can support a retail business.  The information is carefully guarded.  One source of information that can shed light on whether or not a store was doing well is sales tax records.  However, most states make the individual individual sales tax reports confidential.  Business tax returns are considered private in the way that individual income tax returns are.  City finance officers know what stores are doing well and which are not, but are constrained by privacy rules from divulging that information.  Some states publish quarterly reports on revenues from sales tax.  By comparing tax collections from when a store is open and then closed, it is possible to calculate an accurate estimate of its sales tax contributions to a community and, therefore, how much its sales were.  Below is a sample of a quarterly report from Illinois. 

Standard Industrial Classification (SIC) Code Reporting

Report Period: 
Municipal or County Government Name:
County Name: Note: Inquiry here for entire county data
Tax Type(s):
   
MolineRock Island CountyNumber of Taxpayers: 855
2019 3rd quarter - Sales made during July, August, and September 2019
Categories
1
2
3
4
5
6
7
8
9
10
General Merchandise
Food
Drinking and Eating Places
Apparel
Furniture & H.H. & Radio
Lumber, Bldg, Hardware
Automotive & Filling Stations
Drugs & Misc. Retail
Agriculture & All Others
Manufacturers
         Totals
Tax Types   
ST
1,417,324.42
694,798.51
1,435,523.65
391,443.66
207,293.92
1,184,323.86
3,274,394.27
758,789.52
990,054.07
143,994.10
10,497,939.98
   
MT
386,129.59
329,291.14
297,120.02
78,466.62
41,458.63
239,629.06
658,422.95
279,010.88
219,779.74
29,847.72
2,559,156.35
   
HMR
354,330.73
173,697.89
358,260.65
97,861.59
51,815.74
295,438.83
136,694.96
180,940.61
246,870.62
35,982.73
1,931,894.35
   
CST
70,866.09
34,739.94
71,777.17
19,572.21
10,364.59
59,216.05
163,717.11
37,939.20
49,502.54
7,199.61
524,894.51
MolineRock Island CountyNumber of Taxpayers: 855
2019 3rd quarter - Sales made during July, August, and September 2019 Continued ...
Categories
1
2
3
4
5
6
7
8
9
10
General Merchandise
Food
Drinking and Eating Places
Apparel
Furniture & H.H. & Radio
Lumber, Bldg, Hardware
Automotive & Filling Stations
Drugs & Misc. Retail
Agriculture & All Others
Manufacturers
         Totals
Tax Types   
CTSF
283,464.73
138,959.42
286,049.54
78,292.39
41,244.43
235,753.81
107,061.74
144,560.25
197,416.68
28,710.70
1,541,513.69
Note: Blank categories have less than 4 taxpayers, therefore no data is shown to protect the confidentiality of individual taxpayers, totals include censored data.



The news media and other organizations dealing with the economy use these reports to track business trends and use the data to analyze the state of the local economy and are able to see how various segments of the economy are faring.  Local government fiscals officers in some cases "leak" data from specific businesses.  They know how business closings affect the revenues collected for operation of the local governments, and some of them think it is important for taxpayers to be informed.
 

Such reports are not available in South Dakota, although there are records of sales tax collections at the various levels of government.  South Dakota government operates on the principle of keeping the dumb clucks ignorant and gullible.   The press in the state is only sporadically engaged in tracking financial affairs.  When the press does not keep track of public finances, it creates the conditions favorable for corruption.  Those who steal and defraud know that no one is watching, and they feel free to do what they will.    Those who are incompetent feel secure that the public will never know their blunders and ineptitude.   They are protected because personnel records are considered private. 

Criminal records are not protected.   A few days before Christmas, the Aberdeen newspaper published a story that a local business man had pleaded not guilty to felony charges of forgery, burglary, aiding abetting burglary, aiding abetting grand theft and grand theft.  The man is the owner of the building that houses the federal court and the Citizens Building, which is one of the main downtown office buildings.  The same story reported that he is also being sued in civil court by a business which contracted him for a renovation project, which the business claims was not being completed on time and on which the workmanship was defective.  

Then a few days after Christmas, the paper reported that a woman was paying back $16,000 that she filched from the Boys and Girls Club when volunteering to work for its fundraising activity of selling beer at the Brown County Fair. She pled guilty to a misdemeanor petty theft charge as part of a plea deal.  She was originally charged with a felony.  The statute makes the theft of $16,000 a class 4 felony:  22-30A-17 (4)  Grand theft is a Class 4 felony if the value of the property is more than five thousand dollars but less than or equal to one hundred thousand dollars.

The sentence prescribed is:   22-6-1. (7)      Class 4 felony: ten years imprisonment in the state penitentiary. In addition, a fine of twenty thousand dollars may be imposed.

In contrast, this is what she appears to have pled guilty to:     22-30A-17.2.   Petty theft in the first degree--Misdemeanor. Theft is petty theft in the first degree, if the value of the property stolen exceeds four hundred dollars but does not exceed one thousand dollars. Petty theft in the first degree is a Class 1 misdemeanor.

The penalty is:  22-6-2.  (1)      Class 1 misdemeanor: one year imprisonment in a county jail or two thousand dollars fine, or both.

The woman has not been sentenced, but the state's attorney explained that the immediate restitution of $16,000 to the Boys and Girls Club justified the reduced charges.  Supporting the Club in its mission to provide a healthy and safe place for children to gather while their parents and guardians work seems like a wise decision.  But the fact remains that corruption is not confined to the upper echelons of our society.  

The fact also remains that we are provided daily illustrations of how a depraved individual in the White House corrupts the nation with the approval of almost half the voters in the country.  He gets away with it in plain sight and is celebrated by many as their savior.  It makes it seem as if those local people being brought before the courts are merely guilty of reaching for their version of the American dream in the way demonstrated by the occupants of the White House.

In South Dakota, we do not have the information that details how our local economy is functioning, but we get the occasional story about people trying to exploit it.  

Our retailers are closing down.  But the followers of Trump seem to be flourishing.  Except when they get caught.  We may complain about our diminished opportunities to do business in our town, but we have little knowledge about why the town is languishing other than the blame placed on the big, bad internet.  

It all boils down to whether our communities want to deal with hard, verified facts and the principles of honest work, decency, and respect.  Or whether they will tacitly accept  the values of Donald Trump and his minions.  If the latter case, we should be proud to note that we can grow corruption right here at home.


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Aberdeen, South Dakota, United States

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