"The truth will set you free. But first it will piss you off."

Gloria Steinem

Thursday, June 19, 2014

Whose "Gaming The System" Costs You More?

Let’s talk about those cheaters that cause your taxes to rise while the environment around you goes downhill.  I’ll bet you know who they are, or at least think you do.

As a historian, I offer to this subject that fact that “gaming the system” is only slightly younger than the system itself, any system.  Those who can, do, and they use what the system has given them to work with.  The poor always have, do now and always will; this too shall always be with us.  So have the rich, of course; that’s how a great many of their ancestors earned fortunes in the first place.  Several of our Founding Fathers were smugglers who deeply resented the British Crown’s efforts to curtail their law-breaking, and this grand tradition has continued.

Today’s America witnesses the constant volleying back and forth of “truth” about who is doing the cheating, who is to blame, etc., ad nauseum.  Mind you, I’m not talking about the system itself, so whether you approve or disapprove of Section 8, or any “welfare” program on principle should not enter into it at this point, nor should your opinion of how tilted toward property owners our legal system is.  We’ll have that discussion at another time, trust me.  We are limiting this particular discussion to CHEATING, which I hope we can all agree is bad.

So I invite you to ignore the national discourse for the purposes of this conversation, and make your own personal comparison: whose gaming the system costs YOU, the taxpayer more?  Whose degrades your neighborhood more?  For those of you who would argue that the malfeasance of the poor puts the greater financial burden on you, I’ll offer a classic example for our comparison.  Or, if you prefer, pick your own example to use.  It can be a true incident, to which you can testify or under which you may have suffered, or you can even assemble a collection of stereotypes to use, if you are so inclined.  You pick your weapon.

My examples of gaming from the top and the bottom both come from the same town, which is only fair.  I said "town" because the two examples don’t come from Detroit, Baltimore or any of the well-known examples of urban decay, but from the Borough of Pottstown in Southeastern Pennsylvania, a community of some 22,000 people.

Remember, this is all about the Benjamins, so try to total up how much you think each example is costing you by cheating, lying, ignoring the law and general antisocial behavior.  Figure in the cost of the police having to pay attention, the courts, the decline in property values, EVERYTHING, for both examples.  Read, and decide.

Is there any more stereotypical example today of gaming from the bottom than this headline from the Channel 69 website last May?  “Drug Ring Operated from Government-Subsidized Housing, Police Say.”  The leader of this alleged drug ring was identified as one Edward Tillman.   The operation utilized more than one location, but had been headquartered for over a year at the Bright Hope Village, in the 400 block of West King Street, Pottstown, which is, in fact, a subsidized housing complex.  That’s all the information I can pass on about this specific crime, unfortunately.  This is a criminal case, still to be decided, and the law is not free with information about such cases.  That's one reason I invited you to substitute your own example.

I can do a lot better with my example of gaming the system from the top, because it involves a civil case.  It is thus on the public record, in most of its painful detail.  It also took place over a much longer time.  The police knew about it, but it was a matter for the civil courts, so the violator was allowed to continue what he was doing.  I gratefully acknowledge the assistance of Golden Cockroach (.com or Facebook) in providing me with the facts:

In 2004, one Mr. Andrew Soule purchased a property at 440 King Street Pottstown, for $75,000, using a mortgage from Fannie Mae.  By 2007, Andrew Soule was falling behind on his property taxes.  The Borough filed tax liens on the property from 2007 through 2010, when it finally took action to collect on the liens.  The exact amount of taxes owed is uncertain, but a knowledgeable estimate puts it at about $15,000.

During the period from 2007 to 2010 Andrew Soule rented the property at 440 King Street; the tenant forced to leave by foreclosure had been paying $1,200 per month to live there.  Soule performed no maintenance during this period (a photo exists of the house at the time of foreclosure to back this up), and with not paying any taxes, he was pretty much pocketing the entire amount. 

In 2010 the bank foreclosed on the property (in other words, Soule wasn’t making his mortgage payments either), and ended up owning the property.  Andrew Soule’s total default was $99,425.10, and some potential creditors did not participate in the legal actions, so the actual amount is unknown, but greater for sure.

In 2011 the bank sold the property through a Fannie Mae auction for $19,425.00 to one Luigi Fischer.  Luigi Fischer is Andrew Soule’s cousin, and has not been seen since shortly after the auction.  Gee, do you think he might have been a front?  The house sits empty to this date and is accumulating another set of tax loans.  Did I mention that Andrew Soule owns the property next door at #444 King Street—which sits empty—and a number of other properties in Pottstown, on which he has also defaulted?  No matter; we are comparing only single examples, after all.

Try to run the math on just this one property of one slumlord's complete refusal to live up to his legal and contractual obligations—pay no taxes, do no maintenance—while collecting up to $1,200 a month, for four years.  That doesn’t take into account the time and money spent by the Borough going through the legal motions they knew were pointless.  That’s where I get to add the expenses of police and municipal administration to my example; he made them jump through hoops, and laughed all the way to the bank.  THEN HE RECYCLED THE PROPERTY TO EXPLOIT IT ALL OVER AGAIN.  My friends at Golden Cockroach have exposed this travesty, and may have put a crimp in this slumlord’s plans.  I certainly hope so, and if I can add to his Internet Walk of Shame I am proud to do so. 

So, how do my examples compare, or how does mine from the top compare to mine (or yours) from the bottom?  Whose flaunting of the law do you think cost the taxpayers more money?  Which example brings down a neighborhood more?  I said I would let you decide.

I’m sure you have a multitude of other versions of your example, but so do I.  Mine was just one building of just one slumlord (who owns several), in a not very big town, who is by no means finished stealing from you, the taxpayer.  Those like him often own the rancid buildings from which you see drug dealing; it’s but one way they rip off the people at the bottom, whose cleverness may equal theirs, but whose resources certainly do not. 

I don’t expect that this one comparison will cause you to let go of your closely held viewpoint about what’s wrong with our country, but all I ask is that you absorb the lesson and multiply it by the countless number of people who do pretty much the same thing.  As always, I ask you to make your decision based on “the Benjamins,” not some comforting collection of myths.  We should all be angry at EVERY attempt to cheat and steal from ourselves and our communities; we should seek out and vigorously prosecute ALL examples from wherever we find them.  But shouldn’t we be angrier at those who cost us more, who do our towns and cities more damage?  Should we not focus on them more, and allocate more resources to their prosecution and conviction?  You would think so, particularly when the comparison isn’t even close.  But I don’t see that being the case.

I would submit to you that gaming the system from the top is much more effective than from the bottom, and that it costs you, the taxpayer, a great deal more.  There two fundamental reasons for this: first, because the gamers at the top have a lot more money to play with, and second, because their ancestors wrote the rules of the system in the first place.  We still live within a legal system that was created to give primacy to the rights of property over the rights of man.  That was the "original intent"of our Constitution and our inheritance from the English common law.  It was also a subject on which our founding fathers waxed eloquently and at length.  All those misguided liberals from Theodore Roosevelt on have added laws aimed at reducing that imbalance, and the resulting laws have offered new ways to game the system from the bottom, but money still talks.  Of course, as Bob Dylan reminds us, "money doesn't talk, it swears."