Monthly Archives: December 2014

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Scam alert! Want to win an award? Buy one.

You know how kids today get awards for just showing up?

awardsforeveryone

Now everybody can get an award for their business or non-profit, too…for a price.

The congratulatory e-mail received by the Hillsboro non-profit where I work was completely unexpected. “You’ve been selected for the 2014 Best of Hillsboro Awards,” it said. “For details and more information please view our website…”

The website said the non-profit could celebrate its success by choosing an award plaque, an aluminum plaque for $149.99, a crystal award for $199.99, or, if the non-profit really wanted to go all out, both for $229.98.

The e-mail even came with a pre-written press release we could use to announce the award.

But the award notices are little more than extortion. They’re from an awards mill that blankets the country with similar pitches.

It’s hard to figure out exactly who’s profiting from the scam. In the message from the company there’s reference to the “Hillsboro Award Program”, which is defined as “an annual awards program honoring the achievements and accomplishments of local businesses throughout the Hillsboro area…(that) exemplify the best of small business…”

But the “Hillsboro Award Program” is a fiction.

I tried their Contact Us link, which offered me an e-mail form. I sent an e-mail asking for more information on the parent company, but got no response.

What is clear is that an awful lot of folks who crave praise have been duped into participating in the “Best of” awards program, or have promoted their award to dupe their customers.

Companies across the U.S. trumpet their “Best of” awards, including: Generations Family Practice in Reston, VA; Newman IT Solutions of Kalamazoo, Mich.; Christopher Styles Barber Spa of Los Angeles; Karma Dog Training of Austin, TX; and Scotty’s Transmissions of Sparks, NV.

 

PlaqueBlue_png_lg_cc_DDY-7Q92-MWDD (2)

A quick Google search found almost 10,000 announcements by companies that they had won one of these self congratulatory “Best of” awards, each company likely picked at random from a phone book or business directory. In each case, the notification came from the “ (name of town) Award Program”. No parent company that runs the national program is identified.

The company’s website says it is “D&B Rated”, but doesn’t give any information that would allow a curious person to secure a Dun & Bradstreet report on it, such as its business name and location. The website also says the company is an active member of the U.S. Chamber of Commerce, but without a business name that can’t be verified. Repeated inquiries to the company asking for information that would allow verification of its D&B and Chamber connections were not answered.

This particular award scam is similar to ones carried out by the U.S. Commerce Association, US Local Business Association, the United States Trade and Commerce Institute (USTCI), and US Institute for Excellence in Commerce. In fact, the suggested press release, website content and other elements of the “Best of” awards are just about identical with what these organizations have put out.

So if your business or non-profit gets one of these award scams, chuck it in the trash. All that glitters is not gold.

 

 

 

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Stuck: running in place in Oregon

I work in Hillsboro, OR where evidence of a strong economy is everywhere. It’s tempting to assume that family income must be growing by leaps and bounds in Washington County, too, and to extrapolate and assume all is well statewide.

Not so much.

In fact, even Washington County isn’t doing that great, despite the presence of Intel, which has been growing like kudzu, feverishly sprouting buildings and good jobs.

Way back, growth in the U.S. economy was accompanied by income increases across the board, improving the lot of the poor and expanding the middle class. Everybody shared in the rising tide.

middle_class_family

But that hasn’t been happening for a long time. Now a lot of people find themselves working harder, but just treading water.

“Over the past 25 years, the (U.S.) economy has grown 83 percent, after adjusting for inflation — and the typical family’s income hasn’t budged,” according to a recent analysis by the Washington Post. “In that time, corporate profits doubled as a share of the economy. Workers today produce nearly twice as many goods and services per hour on the job as they did in 1989, but as a group, they get less of the nation’s economic pie.”

The result? In 81 percent of America’s counties, median family income is lower today than it was 15 years ago, the Post analysis revealed.

What about in Oregon? I decided to look deeper. The data shows that in 25 Oregon counties, the inflation-adjusted median family income is lower today than it was 15 years ago.

That’s true even in Washington County where median household income, adjusted for inflation, actually peaked in 1999 at $72,787. That year was also the peak for such wildly dispersed counties as Clackamas, Deschutes and Malheur.

The situation is even worse in counties such as Baker and Lake where median family income, adjusted for inflation, hit its peak 35 years ago.

If you really want to hit bottom, there are six counties, including Curry, Lane and Wheeler, where medium family income, adjusted for inflation, peaked 45 years ago. That’s right, almost half a century ago, when Richard Nixon was inaugurated President and the Apollo 11 astronauts, Neil Armstrong and Edwin E. Aldrin, Jr., took their first walk on the moon.

So what we have in Oregon is an economy in which few of us are really better off economically then we were years ago.

Here’s the county-by-county breakdown of when median household income, adjusted for inflation, peaked in each of Oregon’s 36 counties and the level at which it peaked.

Oregon-county-map

County Peak Year Amount
Hood River 2013 $56,725
Sherman 2009 $52,664
Washington 1999 $72,787
Clackamas 1999 $72,264
Columbia 1999 $63,555
Yamhill 1999 $62,070
Polk 1999 $59,218
Benton 1999 $58,558
Deschutes 1999 $58,159
Multnomah 1999 $57,733
Marian 1999 $56,673
Linn 1999 $52,326
Crook 1999 $50,759
Jackson 1999 $50,734
Clatsop 1999 $50,289
Jefferson 1999 $49,678
Tillamook 1999 $48,026
Wallowa 1999 $44,726
Josephine 1999 $43,406
Malheur 1999 $42,525
Morrow 1979 $57,126
Wasco 1979 $54,645
Harney 1979 $54,318
Umatilla 1979 $50,513
Lake 1979 $49,714
Grant 1979 $48,786
Union 1979 $48,006
Lincoln 1979 $47,053
Baker 1979 $42,760
Lane 1969 $52,736
Coos 1969 $52,171
Gilliam 1969 $49,892
Klamath 1969 $49,511
Curry 1969 $49,042
Wheeler 1969 $40,675

SOURCES: U.S. Census and American Community Survey. Amounts in 2013 dollars.

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Who owns Chuck Riley?

Democrat Chuck Riley’s defeat of Republican Bruce Starr on Nov. 4 for Oregon’s 15th District Senate seat cost a ton of money. Now, like a company that’s gone public, his key supporters are going to expect a return on their investments.

rileySenate

As of Dec. 8, 2014, Riley’s campaign committee, Friends of Chuck Riley, had raised $913,372.33 and spent $889,757.01, according to records on file with the Oregon Secretary of State. The onslaught of campaign cash was so great that the contest ended up being the most expensive state Senate race in Oregon history.

But it was also a very tight race, with Riley finally coming in ahead by just 287 votes out of 39,734 cast. Likely costing Starr the race was the Libertarian candidate, Caitlin Mitchel-Markley, who captured 3,593 votes.

That suggests the next race will be hard fought as well, particularly if no 3rd party candidate runs, and that it will again require a substantial war chest. To create that war chest Riley will have to placate some big givers. After all, it was the big givers who filled his coffers, not the little people.
So who does Chuck Riley owe for his victory?

The biggest cash/in-kind contributors to Friends of Chuck Riley were Riley’s own Democratic Party, unions, a climate change activist, trial lawyers, and two national gun control groups.

The money from the Democratic Party came from two groups, the Senate Democratic Leadership Fund ($174,585.50)
and the Democratic Party of Oregon ($107,577.56), which received significant contributions from some of the same characters as Riley’s committee.

For example, former New York City Mayor Michael Bloomberg’s gun control group, Everytown for Gun Safety, donated $75,000 directly to Friends of Chuck Riley and $50,000 to the Senate Democratic Leadership Fund.

Michael Bloomberg

Michael Bloomberg

Riley’s committee also pulled in $10,000 from the Brady Campaign to Prevent Gun Violence.

Other big contributors to Riley’s Committee included:

• Service Employees International Union (SEIU) $204,460.39

This includes: $193,661.96 from Citizen Action for Political Education of SEIU Local 503; $10,798.43 from Committee on Political Education of SEIU Local 49.

seiu

• Oregon League of Conservation Voters PAC $191,120.02

OLCV made an in-kind contribution of $127,498.50 in the form of a TV ad. The balance was in the form of: cash; in-kind field work, postage, preparation and production of advertising and a phone program. The TV ad money came out of a $130,000.00 contribution to OLCV from NextGen Climate Action Committee, established by billionaire Tom Steyer to help candidates who support the need to deal with climate change.

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• Oregon Trial Lawyers Association PAC $38,477.87

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• Oregon American Federation of State, County
and Municipal Employees (AFSCME) Council 75
Political Soft $17,500.00

afscme

• Oregon Education Association – People for
Improvement of Education $8,342.00

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• Other unions $10,500.00

Joint Council of Teamsters No. 37 Political Fund
$1,750

United Food and Commercial Workers Union Local
555
$4,500

Oregon School Employees Association – Voice of
Involved Classified Employees
$1,000

International Union of Operating Engineers, Local
701 Misc PAC
$250

American Federation of Teachers-Oregon Candidate
PAC
$3,000

All of the above contributions totaled $752,563.34. That’s 85 percent of total expenditures by Riley’s committee.

Compare that with the amount that came in from contributors of $100 or less, about $8000. That’s less than 1 percent of total expenditures by Riley’s committee. Even if all the small contributors had bundled their money in an effort to enhance their potential influence, they would have been a small player. They might as well have spent their money on a nice dinner out.

So, how are we going to know the influence of the big donors on Riley? It’s not going to be easy.

First of all, it’s not clear that the size of Riley’s war chest was the key determinant in his victory. There’s no hard evidence of a constant linear linkage between campaign money and victory, although a candidate does need enough money to deliver key messages to critical audiences.

But now that Riley has been elected, the major donors are likely to influence positions Riley takes.Equally important, large donations to Riley are likely to give certain interests better access to him to influence public policy in general.

Big donors will also probably have an ability to influence the shape and specifics of legislation that’s before Riley much earlier in the legislative process, when it’s harder for the public to detect.

Large donations may also carry the day on critical votes where Riley’s one vote for or against can determine the fate of a bill. “These low salience critical votes present the most likely circumstances for members to repay groups for their financial support,” according to Lynda Powell at the University of Rochester in a paper on The Influence of Campaign Contributions on Legislative Policy.

One thing is clear – the big donors are going to be keeping an eye on Riley, just like big investors keep an eye on the stock market. All investments carry some risk, but the reward for risk can be a great return.

return-on-investment1

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United Streetcar and Earl Blumenauer’s misplaced boosterism

Only a politician would want to throw good money after bad, arguing that a failed company should get MORE federal dollars.

The Washington Post, in a Nov. 29 story picked up by both Willamette Week and the Portland Business Journal, told of how Portland’s United Streetcar, supposedly destined to reinvigorate the U.S. streetcar business, failed miserably.

unitedStreetcar

In 2005, Oregon’s own Rep. Peter DeFazio (D) secured $4 million for Portland to buy an American-made streetcar. The contract went to Clackamas-based United Streetcar, a company founded that year, “Leading the way for today’s urban transport needs,” the company’s website says.

United Streetcar was formed in December 2005. It is a subsidiary of Oregon Iron Works, Inc., which recently became a division of Vigor Industrial.

Despite White House cheerleading, United Streetcar became a symbol of ineptitude, with frequent missed deadlines and cost overruns. It ended up building just 18 streetcars for three customers, and still couldn’t deliver them on time. According to the Post, the company has no new orders and the facility built to produce up to 24 streetcars a year is dormant.

But Blumenauer, arguing that the U.S. needs to make streetcars and not give the business to foreigners, wants the government to double down. Specifically, he wants the Feds to order 500 or 1,000 streetcars and give some U.S. companies a shot at making 50 or 100 each.

“That would get production humming,” Blumenauer told the Post.

Does he even remember the United Streetcar fiasco, or care?

In a classic instance of the Peter Principle at work, in August 2010, President Obama appointed Chandra Brown, President of United Streetcar, to the Department of Commerce Manufacturing Council. “Throughout her career, Chandra Brown has demonstrated how good leadership can allow smart companies to do well on the bottom line, do right by their employees, and do good for the country,” said Senator Jeff Merkley (D-OR).

Chandra Brown

Chandra Brown

Then, in March 2013, President Obama again helped Brown fail upwards again by appointing her Deputy Assistant Secretary for Manufacturing at the U.S. Department of Commerce.

I guess Blumenauer figures that if Brown can mess up and move up, there’s no reason why he shouldn’t help United Streetcar do the same.