- Associated Press - Monday, October 12, 2015

The Des Moines Register. Oct. 8, 2015

Assisted living CEO hoodwinked Iowans, investors.

Six years ago, Laurie Bebo, the CEO of Assisted Living Concepts, stood before a group of Dubuque seniors and assured them they had nothing to worry about.

Her Wisconsin-based company had just engineered an end-run around the state inspection process that provides oversight of all assisted-living centers in Iowa. It was giving up its assisted-living license at five care centers - including one that was built with $7.2 million in taxpayer assistance - so that the facilities could operate as unregulated apartment complexes. The company would continue to serve the frail, elderly residents by having the staff nurses and aides provide care through an affiliate that was set up to operate like a home-health agency.

Having been hammered by health-facility inspectors for failing to meet minimum-care standards, Bebo had made a conscious decision not to improve the quality of care, but to simply shut her facilities’ doors to inspectors.

Now, however, Bebo faces $4.2 million in fines from the Securities and Exchange Commission, and is likely to be barred from ever again acting as an officer or director of a public company.

The penalties, which are expected to be appealed, are tied to evidence that Bebo misled investors and inflated the occupancy rates at ALC’s care facilities by secretly adding the names of dozens of employees, as well as her husband and her parents, to the company’s roster of residents. One of these “residents” was, in fact, an 8-year-old boy who had never even visited the facility where he supposedly lived.

The scam allegedly began in 2009, at the same time Bebo was in Iowa trying to placate anxious seniors who were concerned about ALC’s shameless efforts to skirt Iowa’s inspection requirements.

In deciding to impose the maximum penalty against Bebo on Friday, SEC Administrative Law Judge Cameron Elliot said Bebo “utterly failed to recognize the wrongfulness of her conduct” and had repeatedly provided sworn testimony that was “profoundly false.”

Over the course of her hearing testimony, Elliott said, Bebo “had the breathtaking audacity to tell, under oath, what largely amounted to a fairy tale. The simple truth is that Bebo concocted an elaborate fiction, started telling it over six years ago, and has never stopped.”

Members of Bebo’s board of directors say they had no idea she was cooking the books until a whistleblower alerted them in 2012, at which point they fired her.

But as far back as 2009, the board was aware of Bebo’s brazenly dishonest efforts to avoid inspections by playing a corporate shell-game with state licensing requirements. The board was also aware of her merciless campaign to evict the company’s long-time residents once their life savings were depleted and they were dependent on Medicaid.

Rather than fire Bebo for these unconscionable offenses, the board showered her with more than $1.1 million in bonuses. As a result, ALC lost not only its reputation, but $37 million in settlement fees and related expenses. In 2013, it was purchased by a private equity firm, and last year it entered the corporate equivalent of the witness protection program by changing its name to Enlivant. It now operates seven care facilities in Iowa, all of which are fully licensed and inspected.

The ALC scandal should serve as a lesson for corporate boards that demand ever-increasing shareholder returns without considering just how the top executives are working their magic: A CEO who is willing to betray customers, investors and employees won’t hesitate to deceive the board members who control their salaries and bonuses.


The Waterloo-Cedar Falls Courier. Oct. 9, 2015

Tipping point may be near for TIF usage.

Tax increment financing districts have become popular across the nation as a way to lure development to a community.

A TIF district allows a city to invest in infrastructure and tax rebates within the district boundaries. All of the additional property taxes collected from the development within the TIF district can then be used to pay off those improvements.

In Waterloo, we believe the use of those districts have been an important and necessary tool for bringing needed development. However, criticisms of the use of TIF districts ramp up each year. One point that critics will often point out is that TIF districts siphon off tax revenue from schools, libraries, community colleges and other local governments to pay off the incentives.

Meanwhile, those entities continue to ask property taxpayers for more money.

Earlier this week, Waterloo officials defended the city’s use of TIF districts during a work session amid increased pressure from the public to begin releasing tax revenues tied up in the city’s eight TIF districts to help reduce property taxes.

Chief Financial Officer Michelle Weidner said doing so could leave the city in default on debt obligations.

Community Planning and Development Director Noel Anderson said it would also damage efforts to compete for new jobs and development.

“When we’re competing for projects such as Ferguson, such as ConAgra, (surrounding states and cities) are all using TIF as well to provide incentive packages,” Anderson said.

True enough.

However, many believe the growth does little for existing taxpayers if those new taxes don’t help cover the costs of local government and school operations.

Waterloo Mayor Buck Clark suggested there wouldn’t be taxes to release without the TIF incentive.

“The question begs to be asked: Would that growth have come without TIF?” Clark said. “I think all of our collective answer is: No, it wouldn’t. That is the standard bearer for why we use TIF.”

The same thing is happening in Cedar Falls. Two years ago, despite gaining $2.5 million in new revenue from the industrial park district, the city opted against tax cuts and large spending projects - instead deciding to save the overwhelming majority of that money for more upcoming projects in the TIF district.

There comes a point where this becomes unfair for people paying full taxes year after year.

At this point, we believe that TIF districts are still doing a lot of good here. However, as each year passes, we get closer to that tipping point.

A 2006 Iowa State University report on TIFs concluded: “There are virtually no effective state or local oversight mechanisms of TIF usage by cities, counties and other authorities in the state.”

We are getting closer to the point where that issue will need some serious discussion.


The Dubuque Telegraph-Herald. Oct. 8, 2015

Keep the focus, shed light on crime.

The phrase “having a cop on every street corner” carries different connotations for different people. For hard-line “law-and-order” advocates, it represents the ideal toward deterring crime or, failing that, capturing perpetrators. For civil libertarians, it is the ultimate over-reach, infringing on citizens’ various rights.

Instead of a cop on every corner, Dubuque is moving toward a camera on every corner.

The City Council on Monday voted, 6 to 1, to approve City Manager Mike Van Milligen’s proposal to spend more than a half-million dollars to install more security (surveillance) cameras and high-intensity street lights in designated neighborhoods - the areas where the most criminal activity, including gunfire and murder, have taken place.

These cameras will be in addition to the 500 or so already in place, and that equipment has already helped authorities sort out situations ranging from hit-and-run incidents to murder and crimes in between.

The lone “no” vote came from Lynn Sutton, who said the city should first dig deeper into the root causes of these incidents. Besides noting that it’s obvious - criminal activity by people toting guns - it was also pointed out that the council was about to set a work session on the root-causes question and other possible responses. Yet Sutton still voted no.

In an editorial two months ago, we called on local officials to go slow on purchasing license-plate-reading units. It’s one thing for the cameras to cross-check the license plates of passing vehicles against a database of outstanding warrants, but a concern is crossing the privacy line and creating a monstrous database for authorities to use in the future.

However, in that Aug. 5 editorial, we also noted how video clips from the cameras have already helped police. Since then, in just two short months, Dubuque has been the site of a handful of gunfire incidents and two homicides, the second occurring earlier this week.

A speedy arrest in an early-September murder case was made possible by security camera footage, Police Chief Mark Dalsing said. It is tougher to measure, certainly, but it’s possible that the cameras have helped deter some crime. Would-be perpetrators might think twice, knowing that cameras are operating all through a neighborhood (but then again, it is apparent that some don’t consider it).

This is not a great time for Dubuque government, which has implemented budget cuts and is wrestling with high debt, to spend a half-million dollars on what, from a strictly financial viewpoint, seems to offer little or no return on investment.

However, what price does one put on increased safety and security in important and challenged neighborhoods? What price does one put on potential evidence that might help secure a conviction and remove criminals from our streets? What price does one put on a community’s reputation and image - not so much over the existence of a problem but how it chooses to deal with it?

Cameras are an important tool for law enforcement, and, short of hiring a cop for every street corner in the city, this investment might prove to be the next best thing.


The Quad-City Times. Oct. 9, 2015.

Six years of certainty.

United Auto Workers’ Deere work force voted for six years of certainty by approving a new contract that covers 10,000 workers at 12 plants in Iowa, Illinois and Kansas.

Reporting in the Des Moines Register discloses pay raises of 37 cents to 56 cents per hour in the first year, with annual hourly pay increases “roughly the same” through 2021. Pay increases will average about 17 percent over the six years and are intended to narrow Deere’s two-tier wage gap agreed to in the 1990s.

Neither the company nor the union release vote totals. But the Waterloo Courier reports the largest Deere bargaining group, UAW Local 838 in Waterloo, rejected the agreement with 67 percent voting “no.”

The labor contract secures a measure of certainty for a company that has laid off 1,400 since 2014 and is adjusting to face declining demand. It also provides certainty against still-rising health care costs.

Health care costs and international product demand involve factors beyond the union workers’ and the company’s control. Those factors reflect economic and political forces that pressure most American companies.

We’re glad to see the company and its organized workforce chart a six-year course to assure futures for the folks who built Deere’s reputation for reliability and innovation, along with all of those combines, tractors and other products.

And we’re glad to see the contract also assures the company will not close any of the covered plants through 2021.


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