Cohen Fundraising Letter for DSCC Fundraiser with Obama

President Obama will speak at a DSCC fundraiser at the home of Comcast EVP David L. Cohen and his wife Rhonda on Thursday night. Richard Vague is the co-chairman. He made a fortune in fossil fuels, then credit cards. He then founded venture capital firm, Gabriel Partners. Senator Robert Casey will be there.

Here is Cohen's solicitation email.

Some of you were at the DSCC finance committee meeting yesterday, but for those who were not, Anne Caprara, Political Director at the DSCC gave a great update on the major Democratic Senate races.  We announced that we are currently at $600K in pledges and money in the door.  The DSCC has set a goal of $750K for this event, but we all agreed that we should be able to raise $1M as this finance committee has countless times in the past for the DSCC.

Just as a refresher, here are the details of the event Rhonda’s and my home: Address blocked out.

Event co-chairs: $32,400 - 5PM Cocktails and hors d'oeurvres, followed by a very small clutch, photos and dinner/Q&A with the President (At this level you are welcome to bring a guest for the photo and dinner portions of the event).

Event sponsor: $10,000 - Per person 5PM Cocktails and hors d'oeurvres, followed by photos and dinner/ Q&A with the President

If everyone on this email would either write or raise $10,000, we would easily be able to meet our goal of $1M and have a true impact on the programs that the DSCC works every day to implement in each of the targeted Senate races which obviously proved to be a winning strategy in the 2012 cycle (and in previous cycles).

DSCC Obama Dinner Invite 11.14.13.pdf

VA Marks Veterans' Graves "UNKNOWN" Rather Than Identify Heroes

Mount Moriah Cemetery, located in Southwest Philadelphia and Yeadon, Pennsylvania was the largest private cemetery in Pennsylvania. The cemetery has been largely abandoned since the owner died and his wife disavowed ownership in 2011. 

The cemetery has two National Cemetery plots, which Congress mandated to be maintained by the US Department of Veterans Affairs. The plots contain 2300 veteran’s graves, including 21 Medal of Honor recipients. One of these plots, called the Naval Asylum Plot, is in dire need of help.

Sam Ricks, who is on the board of Friends of Mount Moriah Cemetery, said, "Both plots lacks something basic found in all other National Cemeteries: a flagpole with a US Flag flying over veterans' graves.The Naval Plot contains numerous grave markers that are now illegible after years of inattention and lack of maintenance. The VA replaces them with their ubiquitous white marble "UNKNOWN" marker despite the availability of a volunteer conducted transcription survey identifying many of the now blank Navy and Marine markers."

Ricks is worried the grave markers that will ultimately be "Lost to History" if the VA continues to replace them with their ubiquitous white marble "UNKNOWN" markers." 

Ricks added.  These are the graves of our Nation's earliest heroes, who actually fought "from the Halls of Montezuma to the shores of Tripoli." 

The VA has also been to slow to place special gold leaf Medal of Honor designation on the stones. 

Paulette Rhone, chairman of the board of the friends, had a chance encounter with the VA grounds supervisor of Washington Crossing Cemetery, who is responsible for the military cemeteries in the area, the day before the government shutdown, September 30, to discuss the issue. The staff promised to start taking care of the grounds, but have yet to do anything. 

Philadelphia School Reform Commission Chairman Brags About His Accomplishments

Philadelphia School Reform Commission Chairman Pedro Ramos was given the 2013 William J. Clothier II Memorial Award by the Pan American Association of Philadelphia.While most of us see dilapidated schools in Philadelphia, Ramos, a partner at the law firm of Trujillo, Rodriguez, and Richards, boasted about the School Reform Commission accomplishments during his tenure. Too busy bragging, he did not find the time to include Laporshia Massey, the young student who died from asthma complications, in his thoughts.

Here is a tape of Ramos's speech

He touted the recruitment of  the "exceptionally talented leader" Dr. Hite as superintendent of Philadelphia public schools, reduced the number of school buildings, labor agreements with the blue collar SEIU, and reinvigorate private philanthropy that had started to wane. He glossed over the reduced financial contribution from the state.

"Over the last two years, spending has been reduced to actual revenues level," he said. "The school district has instituted a 5 year financial plan."

Ramos, who conceded public service and responsibility can be "messy," continued, "All adults must insist on a safe, high quality education."

When I asked him after the speech if he had any comments about the death of Massey, he bristled with indignation. He offered no words of condolence to Massey's family.

He said, "I have no comment. Unlike everybody else, I don't offer my opinion without the facts. Call the School Board."

Philadelphia Building Collapse Victim's Art Shows Her Enormous Talent

I thought it would be a fitting memorial to post pictures drawn by Anne Bryan, one of the victims of the building collapse in Philadelphia. Her enormous talent is exemplified in these pictures. The world lost a great painter and will hereafter be a little less beautiful. Her memorial service is tomorrow at 5 pm at the Pennsylvania Academy of Fine Arts.

Heike Rass, executive vice president of marketing and communications for the school, said, "Anne's death has hit PAFA hard. We are a tiny school, only 300 students. The graduate students know the undergraduates.

A fund has been set up to defray the funeral costs of those killed in the building collapse. If you wish to donate, go here. 

Philly Celebrates Halloween Early

Philadelphians have already started celebrating Halloween. Rittenhouse sponsored a trick or treat today. Local bars are sponsoring a Halloween parties.

Why We Should Be Rooting for Blatstein's Casino

Developer Bart Blatstein is set to unveil his plans for a second casino Wednesday night. The local reaction has been muted when it should be excited. The dreams of developers are what transform a city. Until Willard Rouse fantasized about building a tower taller than William Penn, Philadelphia's skyline was rather stunted. Although it had financial troubles, Jack Blumenfeld's Abbot Square helped transform Society Hill.

The Inquirer' veteran business reporter Joe DiStefano asked in Philly Deals blog post if we really needed another casino when the Atlantic City and local casinos are floundering.

Blatstein is planning to spend $700 million to build a first class resort, which will target high end gamblers. The current casinos in Pennsylvania are not first class. The Valley Forge Casino Resort was advertising a room for $100 on Groupon this summer.

Blatstein can deliver a 5 star destination resort. He is the developer that turned Northern Liberties from a blighted area to the neighborhood that Esquire magazine named Night Life Capital of the US.  When my friends from Milan, Italy visited his Piazza at Schmidt's, they kept asking are you sure that he is not Italian. The recent security problems are a result of human nature not design flaws.

Some Atlantic City resorts, notably Revel, are top tier. The problem is that it is not easy to get to Atlantic City. Like many city dwellers, I do not have a car. My bus to the Tropicana this summer stopped 4 times before it reached its destination. There are few direct airplane flights to Atlantic City.

Once you get to Atlantic City, there is not much to do besides gambling. Visitors to Blatstein's resort will have all of Philadelphia, including the world class museums, theaters, restaurants, and stores, at their fingertips.

The Valley Forge Casino Resort thought that it would be successful because it is located in one of the richest counties in the country. The managers do not understand high rollers. Gamblers tend to be risk takers. The old money that dominates the Main Line is known for conserving their cash. Suburban family men are not usually sneaking out of their mansions to throw craps at the neighborhood casino. It is a guy's night out.

The $10 resort fee that the state mandates they charge is a turn off many gamblers. Gamblers often rationalize their losses by offsetting the perks that the casinos lavish on them.This rationalization falls apart when you have to pay $10 to enter the gambling hall.

A second casino in Philadelphia by a first class developer is a win for Philadelphia.

Stay tuned for my opinion of his plans.

76ers Owners Could Face Criminal Charges

The local media has eagerly touted the vast wealth, hard partying ways, and Republican politics of the new owners of the Philadelphia 76ers basketball team, Apollo Global Management senior management director Joshua Harris and Sun Capital co-founder Marc Leder. Yet, they have ignored the potentially explosive probe of New York Attorney General Eric T. Schneiderman into the NONPAYMENT of taxes on management fees by their private equity firms. Two of the most prominent private equity firms, Carlyle and Blackstone, do not use this strategy because they deemed it "improper".

While the debate over carried interest's taxes is too esoteric and for many to follow, this tax story is pretty simple. According to the New York Times,  Apollo has NOT paid ANY taxes on $133 million in fees by reinvesting the fees back into their funds. At the same time, the firm has the audacity to claim this money as income in SEC filings so that investors will see that the firm has substantial fee income.

Victor Fleisher, a professor of law at the University of Colorado, has campaigned to make private equity pay their fair share of taxes. He explained their tax avoidance strategy this way:

The basic scheme is to waive the management fees, which are then used to make a pre-tax investment in the fund.  The problem is that under current law, the receipt of the interest in the fund is probably taxable to the managers, and even if it isn't there's a code section that probably re-characterizes the eventual gain as ordinary income.  The private equity guys are just counting on the IRS looking the other way."

The chief financial correspondent of the Times, Floyd Norris, lambasted the current practice of private equity billionaires. He wrote, "It is hard for me to see the difference between that and an arrangement under which my employer invested, on my behalf, money that it would otherwise have to pay me for writing this column. Then I would tell the I.R.S. that I owed no taxes until I liquidated the investment and even then would pay only capital gains rates."

He continued, "If I tried that, I could not get away with it. If the law lets those who work in private equity do it, Congress should change the law."

In a follow up phone call, Norris, whose knowledge of accounting issues is so respected that he was asked to serve on the Public Company Accounting Oversight Board after Enron's collapse, told me that if he worked at the I.R.S that he would be seriously looking at this. He acknowledged that one of the tax agency's hesitations might be that the firms have plenty of money for a sustained fight. 

He did caution, "We will not know if the IRS actually did something unless they issue a ruling or one of the defendants fights back in tax court. 

Feisty New York Attorney General Eric T. Schneiderman, whom American Prospect magazine named "The Man the Banks Fear Most," may force the hand of the IRS. He has recently issued civil subpoenas to Bain, Apollo, Sun Capital, Kohlberg Kravis and other private equity firms to investigate their tax treatment of management income. 

Charles Zehren, the imperious spokesman for Apollo Management, confirmed to me the receipt of the subpoenas by Apollo. (Zehren now denies saying yes when I asked him to confirm the subpoenas. I stand by my reporting. Multiple news accounts have confirmed that Apollo have confirmed that Apollo did receive the subpoenas.)

He then said, "We are not supposed to talk about that. Who told you about it?"

When I asked Rebecca Timms, who works in public relations at Seventy Sixers about the investigation, she said, "You had better talk to Michael Preston about this." Michael Preston, director of 76ers public relations never returned my calls or emails. 

The New York Attorney General's critics dismiss this as partisan politics because Schneiderman, a Democrat, subpoenaed the records of Bain, Mitt Romney's old firm. Sources close to Schneiderman's office defend the probe. 

"This is not about politics. This is all about increasing the tax receipts of New York State during a time of fiscal crisis."

Multiple sources insisted that Schneiderman intends to pursue criminal action against the private equity firms if it is warranted.

One said, "While the office has only issued civil subpoenas at this time and the investigation is in the earlier stages, it looks like the firms devised an elaborate scheme to avoid paying taxes that they are legally obligated to pay. They either treated the management fees as a return of capital in which case they never paid taxes on the money or they received an interest free loan from New York State allowing then to invest the entire pre-tax sum. To be clear, the New York Attorney General would need to a referral from another law enforcement agency, such as the District Attorney's office, to secure a criminal indictment."

Maybe, the Sixers should change their uniform to black and white stripes.

Two Philadelphia Greats: Shanks Painting Lenfest

Shanks at easel, Lenfest looking patrician in coral chair, Thatcher  overseeing from  corner

I stopped by Freeman's auction house today to watch renowned painter Nelson Shanks, who has painted the portraits of former British Prime Minister Margaret Thatcher, President Ronald Reagan, and Princess Diana, at work. Taking a break from giving money away, philanthropist Gerry Lenfest was scheduled to sit for three hours while Shanks painted his portrait. The portrait painting was a program of Studio Incamminati, a Chinatown art school devoted to realism that was founded by Shanks. 

You could have heard a pin drop while the master was at work. I am guessing that the audience was afraid to make too much noise for fear that Shanks, known for his irascibility, would throw them out. Or it could have been because they were awed to be in the presence of two Philadelphia greats, Shanks and Lenfest. 

For sitting patiently, Shanks was giving the portrait to Lenfest for free. I am not sure where Lenfest is going to put it since he still in the same house that he originally bought 45 years ago for his growing family. 

BTW, it is no accident that I chose this particular picture. It was quite fitting to juxtapose Lenfest with Margaret Thatcher. The Iron Lady would have approved of him. 

I got a chance to take a picture of Shanks when he was taking a smoke break. A portrait of the portrait painter- totally Meta.