Golf for Fun and Profit(eering)

Before reading too far along into this post, take note: this is NOT a post by Marcy or bmaz and it’s speculative.

It’s also the closest thing I may come to Trash Talk on a sunny Saturday afternoon here in the great white north where outdoor temperatures hover in the single digits. Going outside one risks frostbite and snowblindness.

In other words it’s a perfect day to indulge in flights of fancy, imagining a stroll over the velvety greens and fairways of a lush, high-end golf course, pondering the moola one might rake in from an imaginary money laundering operation at the same time.

I spent some time with a friend who works in the golf industry talking about all the ways one might profiteer from running a golf resort. Neither of us are criminals so our ideas might not make the most sense to seasoned professional crooks. But after looking at the myriad ways in which one could make an unreported (read: illicit) profit and clear money out the door, I don’t know why I don’t buy a golf course because DAMN. There’s a lotta’ gold in them thar sand traps.

We asked ourselves this simple question: if one owned a luxury private golf course club or resort, how could they launder money or make unreported income?

Membership fees

  • Charge member fees only certain people can afford to pay, the kind of people who expect to pay a lot for golf, who can afford it, and who may desire a certain amount of privacy and service incumbent with such fees.
  • Social membership fees for non-golfers who want to participate in club events, high enough to keep out all but the class of people who fit with the golf and corporate members.
  • Corporate member fees assessed to businesses who want to treat their management class employees. Assess them at a slightly higher level because the business benefits from access to members.
  • Overseas member fees, again at a higher level for a different class of service (ex. foreign language staff).
  • Phantom fees assessed to false identities.

That last one is pure gravy. Who’s going to check on whether these memberships are attached to real people or fronts?

Member minimum purchases
Membership-based clubs charge a monthly minimum purchase fee in order to support operations like their cafe and restaurants when course business is slow. If a member doesn’t buy minimum of $200 worth of meals or drinks in a month, for example, they will be charged that amount. It encourages buying more than the minimum for value-sensitive members.

But it’s also a means to keep out certain people while offering an opportunity to make easy money. Think about that phantom member — let’s say they paid $50,000 to join the club. They also have to pay $200 per month in minimums. Different and higher level of membership? Different, higher level of minimum monthly purchases fees.

Premium services
Come on, think about it. Certain classes of members can ask for almost anything, especially if they wave some cash around. Who’s going to monitor whether any of these services are legal or otherwise?

Club or Course Events
First you must be a member. Then you have to pick from a menu of services you want provided for your Acme Corporation Annual Golf Outing. Of course you can only choose from the club’s or course’s list of pre-approved vendors, from hospitality tents to extra waitstaff. There are set-up and breakdown fees.

And it’s all made so very easy for a member to pay with one check, wire transfer, or crypto-currency transaction.

Again, who’s going to check this for legitimacy? To a bank it looks like a pretty typical event charge, no need to submit a Suspicious Activity Report (even easier if you do business with ‘friendly’ banks).

Oh, it’s a pity, too, when your event fees are non-refundable in case of rain.

Operating Expenses
Every product or service a course needs from sprinkler maintenance to grass fertilizer, golf cart repair to staffing, janitorial services to kitchen equipment, can be purchased from a (shell) company which manages all the contracts — so to speak — and then invoices the course.

Naturally the convenience of working with a single third-party might cost anywhere from 10 to 100% more but who’s counting?

Golf Course Adjacent Real Estate
A luxury course helps retain property value; who doesn’t want to wake up every morning and look out onto a fabulously maintained expanse of greenery, assured of quiet, likely within a secure, gated community? Buyers will pay a premium for this, especially for just the right house, and they’re the kind of people who pay in cash.

Insurance
Sh-tuff happens all the time in a business where clients engage in sports and where alcohol is served. A business needs insurance. What a coincidence there are many ways to benefit from having ‘good’ insurance.

These are the obvious ways one might use to make a little something extra through golf course and club ownership. But a special kind of owner might also have a few more opportunities.

What if some of the members’ personal information could be collected and sold? What if those same members could be induced, shall we say, to part with some cash to keep personal information private?

What if access to certain members and their businesses could yield a finder’s fee, for lack of a better term? Or maybe a percentage off the top of every transaction once new business partners paired up and began transactions?

We never call it kickbacks or inflated invoicing, of course.

This is all we came up one snowy afternoon, daydreaming about golf.

But the one most important factor about owning a high-end golf course and club for profit? There’s very little regulation.

Not like hotels — you can see the amount of regulation on room rentals on the back of most hotel room doors.

The course might have to adhere to state and federal regulations regarding chemicals applied to the greenery but if a course owner has sufficient pull those regulatory inconveniences won’t be a problem.

Same with undocumented staff or contractors.

Can’t get too carried away with insurance matters but again, clout will help.

And the average rich dude has a minimum expectation from food and beverage service well above the minimum a state or local agency might expect.

But who’s going to insist on looking at the books if the business pays some taxes based on its reported income and the income doesn’t look out of line with other businesses in its class?

Even when the total number of golfers has plummeted by 20-25% over the last 10 years?

Now imagine what one could rake in if they could afford to buy multiple golf courses.

All I can say is FORE!

 

Treat this as an open thread.

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156 replies
  1. P J Evans says:

    FWIW, the city where I lived in west Texas has a country club. Their membership fees are online – a lot of locals can’t afford it, but the doctors and lawyers can, if they want. (It’s a mile or so from the local airport, but I don’t know if the airport has rental cars; it’s not a scheduled-aviation place.)

    • Rayne says:

      That place is a bargain. Dirt cheap.

      One of my in-laws belonged to a chichi course-club in Naples, FL; the membership was $50K nearly 25 years ago. Made a profit selling the membership which was transferable. The locker rooms had cherry wood lockers. ~smh~

      • Rayne says:

        Here’s a current course membership plan in Naples FL, just as an example:

        Initiation Fee: $40,000 non-refundable
        Annual Dues: $11,500 + tax
        F&B Min: N/A for FY2019
        Capital Fee: $2,400/year

        I’m guessing they haven’t calculated the food and beverage monthly minimum purchase fee yet for this year.

        No idea what that capital fee is, guess I need to do some more homework and figure out how that might benefit the course owner who isn’t above board.

        Should point out there’s a difference between a membership, which is like joining a condominium, and the annual membership fees. The former is supposed be a form of ownership stake like stock and the latter goes to operating expenses.

        Edit — And in case it wasn’t clear, I used the link and prices above as an example only of a course in a part of the country where there are quite a few luxury golf courses. I know nothing else about the course except what’s on their website.

  2. JD12 says:

    I worked at a private club for years and I never looked at it that way but you’re right on with this. Along with luxury real estate it’s probably the easiest way to launder money that I can think of.

    Even just a foursome at a decent club can cost in the thousands: greens fees, range balls, carts and caddies (which are required at peak times), food and drink minimums. Then you have clothing sales, lessons, things like grip changes and custom club-making. Even places that aren’t advertised as resorts usually have some rooms you can rent overnight.

    Golf is slow to evolve so a lot of it is still done in cash without documenting names. With country-club amenities the possibilities are just about endless. I’d be curious to see how Trump’s courses are run. At a lot of places the members are involved in oversight. They have meetings and votes like condo associations, but Trump almost certainly handles all that himself (or via Trump Org). Someone could easily keep multiple sets of books and it’s private so it’d be hard to audit—you can’t stand at the first tee and count how many people tee off.

    • JD12 says:

      That’s basically on the receiving end or accounts receivable if you will. On accounts payable it would probably be very easy to do the same exact tax fraud NYT reported Fred Trump came up with. You could mark up all kinds of things from tree planting or removal, hedge work, mulching, sod, all kinds of chemicals and fertilizers. That’s just of the top of my head.

    • Eureka says:

      These folks need to be on the news all week, so it’s clear that our national emergency is at the border of Westchester, not Mexico.  A single mom of two, fired without notice, after eight years?  And any of the other folks who have been willing to go on the record in this new reporting.

      I think it would be most effective covered as part of the continued suffering stories of federal workers and contractors at the hands of Trump/McConnell mania.  <—- And I hope all that coverage happens, by the way, because we’ve only got three weeks and memories are short.

      • Eureka says:

        Plus institutional stuff like this:
        Jeff Stein: “Sources: Government watchdog estimates IRS needs 12-18 months to recover from shutdown IRS faces: — 5 million unopened pieces of mail — Massive (precise #s unknown) flight of IT personnel to private sector — Need to hire 8K workers, train 2K more” (twitter short url to WaPo removed)

        And of course I have to include the imprisoned, separated families.

        MSM needs to tell the story of how this admin not only has no clue how to deal with immigration issues, but that their solutions are disastrously cruel, exploitative, and damaging to everyone.  If Trump wants to say his shutdown was (and threatened emergency declaration will be) all about immigration, then let him- and let him & Mitch continue to be pilloried for it.  All the facets- many not even mentioned here- and stay on it!  Maybe we’ll get some real solutions that way.

        • Veronica says:

          Plus there is a horror story happening in every branch of Government, simply because Trump has appointed idiots who love him as the heads of everything. They not only know nothing about what they are supposed to be ‘running’, they have zero interest in learning anything, and appear to be destroying everything bit by bit !  I have just read ‘The Fifth Risk’ by Michael Lewis – an amazing story of how the changeover from Obama to Trump happened, and the supreme danger we now face from their ignorance !

          • Rayne says:

            I suspect the naming of people who are not merely incompetent but malignantly opposed to the mission of their cabinet-level job and department serves more than one purposes. Sowing chaos is one, allowing profiteering is another, creating long-term damage yet another. But I suspect one key function is to prevent a majority of “principal officers of the executive departments” — the cabinet members — from ever working together cooperatively to remove Trump under the 25th Amendment.

      • Trip says:

        True. But part of the reason I included them is that if you are running something outside of the law, you want compromised or frightened people. With a wink and a nod, the management allowed them to work there, knowing of their status. That’s something to hold over one’s head, if they were to divulge anything not on the up and up. And we see that that is exactly what happened (but in this case the criminality was Trump hiring cheap undocumented labor, not the deeper shenanigans). But compromised people plus lower wages, how much was declared in payroll, etc? Another way to pad expenses maybe.

  3. Rayne says:

    Ack! I feel so stupid! We were so busy thinking about the business of golf and profiteering that I completely forgot about the golf!

    Book a tee time and prepay greens fees for a foursome which no-shows. Pure gravy if a little incremental compared to a phantom membership but still gravy.

    This thinking like a crook is giving me a headache.

      • Avattoir says:

        1. Take your “phantom foursome” idea to the private tournament level.

        One or more times a year, the course gets half-booked, or one course full-booked if the club has more than one – for a private tournament, maybe over 2 days (3 days is not at unusual for some industries, like exploration and recovery products suppliers to the fossil fuel energy industry; I’ve been told of one in the Houston area that goes for a full monty – 5 days).

        Now try and figure out which 4somes out there are in the tournament, which are made up of regular or some other category of members, and which are ‘special bookings’: all duffers go OB.

        It’d be safest to overbook the living beejeebus of the event, like, you expect 120 but book 600 while confirming 80. That way your management team has room to steer thru a spot audit, just in case.

        2. This is one I can’t actually confirm, but makes too much sense not to be true.

        There are a number of spectacularly real-estate rich clubs in my area, topped by one of them which has been neutron-bomb-exploding ‘fortunate’ in how the metropolitan area planning authorities have been permitting development and have it planned into the future (In what must surely be just one of the strangle and remarkably fortuitous coincidences, some of that club’s leading members have full time agents, attorneys and reps who pretty much have permanently bivouac’d in offices contiguous with the meeting rooms of the various metro development and planning authorities.)

        There’s only ever been a few hundred ‘True Member’ shares issued, like a kajillion years ago, so now each a one of those is worth in the many millions – with those members having voted themselves lifetime relief from annual fees and special assessments. Nonetheless, the ‘special’ membership categories of the now multi-location multi-course club runs into the thousands, a significant portion of which are in holding companies, at least some of which track to offshore virtual entities. SOME of those theoretically ‘lesser’ categories of membership have what’s described as ‘equity accounts’, implying if not stating entitlement to a division of “profits” from real estate sales over certain thresholds, while OTOH clearly and explicitly stating financial obligations for “special” assessments, annual fees and usage charges.

        The set-up works like Guthian expansion: there’s no end to it, and it keeps on expanding. One of the actual human members who actually plays, told me two decades back that she believed the club’s book value THEN to have been several multiples of the what would cost of to purchase a controlling interest in all the real estate in the entire metropolitan area.

        So when an anonymous holding concern commits X dollars to the club for nothing more than a place in a decades-long line towards eventually achieving some form of special member status, it’s not getting ‘nothing’ for that, it’s getting the ability to lever if not hypothecate, with one of the many banking and other financial concerns connected to the club, some amount that at minimum is somewhat above the face amount of the initiation fee.

        Pretty sure that, on paper at least, by now that club owns not just this entire heliosphere, but the local galaxy, with an enforceable option on Andromeda and several more suburban galaxies.

        • CroFandango says:

          “The set-up works like Guthian expansion: there’s no end to it”

          Trivia note, Guthian cosmic expansion lasted only the tiniest fraction of a second, actually, although the rate was quite high.

  4. Dr. Pablito says:

    The prices in the pro shop and deals with only certain vendors for clothing and sports equipment. The write-offs on “damaged” or out-of-style inventory. People at the club to provide various personal services like health, fitness, training, instruction. Nobody is gonna check on all that stuff. And maybe you can push your luck and bill health insurance companies for physical therapy and massage and the like, but that might invite some unwanted attention, but on the other hand, it could connect you up to some pretty lucrative grift. And “massage” and “body work”. Say no more. We know what can go on in those cabanas.

  5. BobCon says:

    I’m thinking events are the biggest opportunity. A high end country club event can easily run to $100K or more. If a bogus company has a bogus event and pays bogus vendors, you can move a decent sum of money in a day, minus whatever overhead you might pay to keep up appearances.

    • Rayne says:

      I don’t know. If a course sold phantom memberships, let’s say the price is $250K, it’d be pretty sweet. Little bookkeeping required and the membership could be sold and resold for profit.

      • BobCon says:

        I think it depends on how fast the money needs to be turned around.  Memberships are a good way to get the money in, which works for some people, but getting the money back out probably needs to be carefully planned to avoid suspicions, and it puts the club at some risk for fake reporting.

        Fake events are going to be good for people wanting to get their money turned around fast. The club owner can also keep an official distance — picking up a rental fee while the shell company host pays a bogus PR and event planning company to manage the fake event.

        • Rayne says:

          Can’t do too many offshore shell company payments too quickly, that’s for sure.

          On the other hand, look at Paul Manafort’s Oriental rugs and pricey mens’ wear and home improvement purchases — why didn’t any of those transactions trigger a flag of some sort?

            • Rayne says:

              Well, not ‘toops’
              1) a man with a full head of hair like Manafort might plausibly buy,
              2) using money from an offshore LLC,
              3) that cost tens to hundreds of thousands of dollars at a pop.

              Vats of premium hair color, however…

          • P J Evans says:

            Oriental rug businesses are, at least in L.A., notorious for “going out of business” sales where a new one opens up in the same spot soon after the old one closes. It sounds like a great way to launder money….

    • arbusto says:

      An engineer I worked with in 2001 was a scratch golfer whose dad belonged to several Carmel/Monterey golf clubs.  He said members didn’t pay for goods received (pro line golf sets, etc.) during the year.  The Club would divvy account receivable evenly between members.  Whole different level of existence.

    • JD12 says:

      That’s right, we’ve already seen Trump do similar things like the astronomical fee to rent his own ballroom for the inauguration. It seems as if getting the donor class to hold events at his properties was at least partly what motivated him to run.

      The Eric Trump Foundation holds an annual event at one of Trump’s clubs. While he said publicly that “We get to use our assets 100% free of charge” (effectively saying they donated that money to charity instead), Forbes found that $100K went to Trump’s club. (Good guess on the amount btw.)

      And, of course, The View From LL2 found those payments from the Trump campaign to his hotels that appeared to match reimbursement for the Stormy Daniels hush money. Ostensibly the payments were for lodging and catering, but the statistical analysis showed that there was only a 0.00054% chance of those numbers matching randomly.

      Since the Trumps never got caught for the invoicing fraud NYT wrote about, human nature suggests they still do a ton of it.

      • JD12 says:

        There’s a link inside that Forbes article that goes to a different one with more detail, I don’t want to look like I’m spamming the comments so I won’t post it.

        It says the Eric Trump Foundation, which does deserve credit for raising millions to fight cancer, did use the club for free for a few years until his father found out and “had a cow.” He said “I don’t care if it’s my son or not—everybody gets billed.”

        • Rayne says:

          Telling, huh? I sure hope one of the states in which these Trump family foundations use Trump org facilities subpoenas the facilities’ records.

          • JD12 says:

            The charity thing is one of the biggest issues I have with Trump. I mean, the guy lives in Manhattan and according to The Smoking Gun he couldn’t part with a single penny after 9/11? And you basically have to be an animal to do what he was doing with the Trump Foundation, which is probably why he did it because it’s hard to question someone’s charity without looking like an asshole.

            Before The Roast of Donald Trump, he announced that his appearance fee would go to charity, the check from Comedy Central would go straight to the Trump Foundation. So when he gives his rebuttal he gets up and says it was worth it to take the abuse because all the money was going to charity, but as he said it he pointed to himself as a “joke.” In hindsight, it’s pretty clear that it was no joke.

            You’ll never convince me someone like that wants to be POTUS for anything other than selfish motivations.

            • P J Evans says:

              Or the other day when he announced he was giving $100K of his salary to alcoholism research. (I wonder whose money it really is.)

  6. Mister Sterling says:

    If one ran a criminal enterprise, this would be one of the least risky, least violent ways to do it. Trump is not an alcohol or tobacco smuggler. He’s not a casino owner (not anymore). He doesn’t offer wise guys protection, or pay off cops and judges to ignore small front businesses. He just runs various types of social clubs, golf clubs, and sells his name to condo towers. He takes in foreign money and launders it for a cut. He’s gone under the radar for decades, despite being The Donald and not being liked by actual elites. I think you nailed it. And it’s unfortunate that like his father Fred, we won’t know the true extent of his crimes until after he is dead. Trump is a role model in how to get away with white collar crime.

  7. Ewan says:

    There is another aspect — it must depend on the state, but I would think it could occur in many places. Connected to the real estate near the golf, there is small print regarding zoning. In scenic places, where one is not allowed to build, there is often an exception for Golf courses. They need a club house, but otherwise, they create this large green space the zoning wanted at no cost to the public, argue the lobbyist. After a few years, however, the club house becomes a normal building, which “dezones” a certain perimeter around itself. And land not open for development, therefore dirt cheap when it is bought, becomes built.

    • Rayne says:

      Yup. Grease the right palms and the zoning regulations can change, too.

      I can think of a course which was built on once-public property, was required to be open to public for first 25 years and then it could go private. In the meantime, adjoining property was sold and developed as a gated community, creating its closed captive market which may take the course private after 25 years.

      Too bad the golf market crashed along with local industry or it might have closed off the land to the public for good.

  8. Savage Librarian says:

    Any thoughts or ideas on what % are owned by the mob or by Russia or China or the Saudis?

    OT – Another scary question: what might happen if DT runs as a Dem or Independent next time?

    • Rayne says:

      1) No idea what percent of golf courses are part or wholly-owned by foreign entities.

      2) He can’t run as a Democrat under new DNC rules because he’s not a party member.

      Edit — Your question is a perfect example of the kind of speculation in which party outsiders indulge. If you were active with the local Democratic Party you wouldn’t ask about ferret head running as a Democrat.

  9. Drew says:

    Of course, a big part of a money laundering operation is returning the cleaned up money to the sources of the dirty money (less the lucrative laundering fees, of course). These phantom vendors & phantom events create lots of opportunity to return money as “earned” to the guys who paid it in thru “memberships”, etc.  And with on the books receipts reported properly to taxing authorities, it provides cover for off the books cash to also flow in & around–much as we saw with Paulie Rugs. It could even look very legit–phantom event for XYZ corp.–(i.e. cancelled non-refundable) $250K fees paid. Personnel charges $85K (phantom employees or phantom temp.employment agency) Food $100K (phantom caterer) $50 Equip Rental(phantom rental company) $15K revenue reported, less overhead expenses for company.

    Of course, a big hunk of money stayed with the golf club for it’s trouble.

    • Rayne says:

      Yup. You described the scenario exactly. Membership fee/annual dues/event fees/green fees in (the bigger they are, the more likely they are paid by a shell corp) and expenses out (again, the bigger and more complex, the more likely a different shell company receives the payment).

  10. AitchD says:

    Two things trashy: (1) Many such club membership costs are business write-offs, many paid by the member’s employer.

    (2) In January 1980 I drove north to West Palm Beach to visit with a friend, who was staying with her sister and her sister’s boyfriend in a monthly rental apartment. Late in the evening the sister and boyfriend came back from a most-famous player’s home farther east. The Tour was at Miami’s Doral that week, the famous player was hosting a bunch of players for the evening. The boyfriend was counting a fat wad of $20 bills, he asked his girlfriend, “Was that guy with the glasses _______?” He doesn’t wear glasses when he plays, he was also very famous: already two U.S. Opens, an Open Championship, one or two PGA Championships, hated racist Augusta National.

    (Last I checked, after Bush’s tax cut, only Duval and Calcavecchia were Democrats.)

    • Rayne says:

      Not certain about the write-off for club membership; expense has to be ‘ordinary and necessary’, IIRC, and unless one is a professional golfer it’s hard to argue a membership is ‘ordinary and necessary’.

      The minimum monthly purchase fees might be if clients are entertained at the course regularly, just as food and beverage expense for same purpose would be a write-off.

      I’d love for a CPA to weigh in on this.

      • AitchD says:

        IANACPA but I have direct knowledge of membership costs being in lieu or whatever of the equivalent in salary, like having a company car. Very Important Persons need such amenities to conduct business amidst their ether. In Mamet’s “American Buffalo”, Teach says, “Guys like that, I like to fuck their wives”.

        • Rayne says:

          Value of membership fees being taxed as income makes sense to me if a company pays for the membership for its employee. But I’d love an actual CPA to affirm how they’re handled.

  11. P J Evans says:

    @Rayne January 26, 2019 at 4:04 pm
    City of about 25K, fifty miles from an airport with scheduled flights, in northwest Texas – and the highest paid people are the doctors and lawyers (it’s a county seat), and the city manager and school superintendent. Most people would find it a stretch – I suspect the average annual income is 35k or less. (The country club does get used for local wingdings, though, along with the hall at the local Elks’ club.)

    • Rayne says:

      Yeah, that’s probably about right for that kind of locale. My dad belonged to several courses like that over the years in Michigan and Indiana. Our favorite was little better than a cow track in BFE Indiana, but on the day they ran the Indy 500 we would have the course all to ourselves. We’d take a radio and listen to the race while my dad, my brothers and I played 18-holes. Didn’t like how that shot took off into the pond? Drop a couple more — there was nobody behind us pressing us to play.

      God, I miss those days. The sun was hot, the beer was cold, and life was good — not a care in the world about democracy and the planet going up in flames. ~sigh~

  12. OldTulsaDude says:

    Wouldn’t an all-cash purchase of a golf resort be an even better way to launder a lot of money?

    • Rayne says:

      *wide-eyed stare* *jaw gaping*

      Wow. WOW. Why didn’t I think of that?!?

      Who would have the kind of cash to do that? Maybe enough enough cash to do it over and over for almost a decade??

      /snark

      • OldTulsaDude says:

        And it would create no suspicion at all to suddenly abandon a lifetime business plan of using other peoples’ money because the cash is suddenly rolling in from all your “side” businesses.

    • Gnome de Plume says:

      I was waiting to see if someone would bring up the big problem with cash.  That is a huge problem in laundering which is why banks have to report cash deposits over $10K. Some Las Vegas businesses have that problem.  Casinos are allowed to deposit their cash, but other lines of work have to figure out ways of turning totally legitimate cash into mobile currency.  This is an obstacle in the legal cannabis industry because of federal banking laws.  I know of several ingenious ways of getting your cash legally into a bank, but it can only happen in Vegas or other places where huge amount of cash are not unusual, “your winnings, sir.”

  13. Pete says:

    Well, if there’s going to be a golf course with an – ahem – laundromat then it might very well be in Florida. Southeast Forida in particular where Trump has several.

    But other than perhaps high end members only clubs the fate of many if not most public and even mid tier members only is to close them and develop the land for housing. To the credit – I guess –  of many city/county planners require when that happens that some land be set aside for parks.

    As with a lot of things either unregulated or regulated by bribe too many courses were built and the traditional baby boomer golfer is getting too old to chase the old ball – and outrun/out drive the alligators.

    • P J Evans says:

      Some golf courses won’t be built over – they’re off the ends of airport runways or in areas that are subject to floods.  I’m thinking of the Van Nuys golf course, south of the airport, of the course in Sunnyvale, off the south end of Moffett Field, and the one in Tujunga Wash, east of I-210, where the “rough” tends to be flood channels full of gravel and rocks – if your ball goes in there, fuggeddaboudit.

  14. Eureka says:

    Thanks, Rayne- I was waiting for this one, and appreciate that you spelled it all out clearly for us non-golfers.
    Your reference to non-refundable rain-cancelled events made me recall something from a few years back about weather prediction. Some start-up-type company said it had figured out how to predict the weather quite awhile in advance- like more than weeks and months- for the purposes of vacation planning. The were going to partner with AAA (Am Auto Club). The number sticking in my head is minimum 81% accuracy months-out.
    How that works with escalating climate change and cloud-seeding in Siberia, who knows. But more granular prediction may not matter anyway in those locales like Isles etc. or with long blocks of predictable rainy seasons. Thinking face…lol.

    • Rayne says:

      Listened to that Gladwell podcast. It’s a fair indictment of high-end courses but it also comes from a guy who actively hates golf.

      I think there’s a place for sustainable golf courses which also offer multipurpose green space for the public. I don’t know that enough money has been invested in studying such developments which can provide buffers between sensitive environmental spaces and more developed areas, homes for wildlife, parkland and running trails/walking paths/winter cross-country skiing, so on. I know of a city park in a nearby municipality featuring baseball diamonds, children’s play areas, walking paths, and a golf course — the golf course lies in a flood zone undesirable for any other purpose as it’s under water 6-8 weeks a year.

      Perhaps I see golfing differently because I have golfed regularly as an adult, and because my son worked summers at a local public course. He’d come home every evening and tell me about the animals he’d seen that day on the course, from foxes to herons and bitterns, to white-tail deer. Just don’t bother to retrieve your ball from the biggest pond on the back nine — there’s a massive snapping turtle in it.

  15. JD12 says:

    Glenn Simpson actually spoke about this in his interview with the House Intelligence Committee. He was able to get financial statements for Trump’s overseas golf courses because in the EU they have to file statements even if they’re owned privately. Apparently Trump’s courses constantly lose money and have to have capital pumped in periodically. Simpson told the committee that if he had subpoena power he’d want to see where that money was coming from. Ostensibly it was the Trump Org but he was skeptical.

    I’d heard that after Trump convinced his siblings to sell off Fred’s real estate empire he began buying golf courses with cash. Strategically it was an odd decision because it was during the financial crisis when golf courses were closing daily. In commercial real estate “cash” doesn’t usually mean cash, it means you personally give an interest-free loan to your golf course which is technically a business. So by pumping more and more money into it, he’s really just adding to the loan. Either way it’s the type of deal you should cut bait on unless you have something else going on.
    https://www.theguardian.com/us-news/2018/jan/20/trump-golf-courses-scotland-ireland-enormous-amounts-capital-from-unknown-sources

    • Rayne says:

      I really need to dig out Simpson’s Congressional testimony again to look at his remarks about real estate financing. Something in his testimony to the Senate still niggles at me.

      I’d give my eye teeth to look at the public financials on the Scotland and Ireland courses. They might serve as a benchmark for anticipated performance though the traffic through them might not be at the same volume as Trump’s Bedminster NJ or Trump International in West Palm Beach FL. What I don’t understand is why it’s taking so long for the lawsuits filed against Trump org on Emoluments Clause to wrap up — it’s been two years since the first suit was filed.

      • Avattoir says:

        “don’t understand … why it’s taking so long … it’s been two years”

        Well, law’s delay.

        Trump U. started in 2004. First few years, complaints back to Trump U itself were put off by stuff like saying ‘you just got starte’ ‘it takes time’, further promises, fake sweeteners& supplements, etc.

        Then, September 2008 and KA-THUD. That had a felicitous byproduct of buying the Fightin’ Toads of Trump U. grift several more years, or else official action might have started in, say, 2010, rather than when it did in 2013.

        The earliest “institutional” complaints were, as such tend to be with folks attracted from the pool of the naive & willful of willing naifs, who can be relied upon to be particularly reluctant to admit to themselves leave aside others that they’ve been conned (especially when they’ve paid for the thing with money borrowed from family &/or friends), out on the ‘quasi-institutional’ edges of our legal system, to wit, the likes of municipal, state & educational program officials, Chambers of Commerce, Better Business Bureaus, radio phone-in shows, for the most after attorneys had spent months telling folks, Look, it’s not worth it to either of us you hiring me on a individual basis, go complain to the folks in this list of government offices, meanwhile I’ll start beating the trades bushes to see if some braveheart is working to certify class action, meanwhile keep calling your fellow vics cuz any and all your power potential here lies in joining rings, i.e. numbers and organization).

        When the first state A.G. action was filed in 2013, there’d already been months, maybe years of institutional efforts to ‘settle’ the claims. It’s worth considering that one entire side of this battle was occupied by fully armed Trumpenkorps grifters, Trump Org’s pack of legal beagles, a herd of Trump henchman pretty much all with the same ethical standards as Mickey Medallions, and an array of commission-hungry insurers behind which was  small room of large underwriters all of whom were JUST TOADILY PISSED that Trump had managed once again a way to fleece them ore at least put them at a risk they never saw coming, in relation to which now shared in common with their insured an incentive to discourage, settle, prevent, delay, just make the friggin’ claims disappear.

        And all the time, Trump is making bullshit noises the run the gamut from ‘fake claims’ to ‘we’ll settle all legit complaints’. What’s surprising, IMO, is that it got from formal complaint thru the Trump litigation minefield and onto a trial docket in San Diego in just over 3 years. That’s actually kind of tribute to the system.

        FWIW, where this emoluments thing is right now is certainly no further ahead, relatively speaking, than the Trump U. legal battle was in 2014-15.

  16. Howlnaround74 says:

    A point was made about the crashing of the golf economy. And I will make two points. The first here in northern Michigan it was said in the 00’s boom more forests were lost to golf courses than clear cutting. But since then several high end courses have closed and turned into hop farms for the brewing industry or our now returning to their natural state.
    But yes as a life long golfer who has played bad golf at many of the areas best courses this industry is a boon diggle for the richy rich. Thanks Rayne for the topic, cu at the next Meet-up. Lol

    • Rayne says:

      FRANK!! How the hell are you, buddy? Long time no see!

      I recall there were close to 900 golf courses in Michigan at the height of the boom pre-2008. At least 10% cratered within a year or two after the crash and I think another 10% floundered over the decade since. We still have at least five courses in the top 100 of the country but I don’t think we’ll ever see as many as we had.

      And hops as a replacement — yeah, I love the idea, have thought of growing hops myself downstate. A delicious alternative although not as beneficial as forests. I’ve wondered how much that asshole Aubrey McClendon and his manipulation of real estate values for fracking had a role in the way land use changed after the crash.

      Hope you’re staying warm! See you at a Meetup!

  17. DWoolly says:

    Golf cart repairs would probably be a small but handy way of moving some $$ around too.  “Fixing” unbroken carts.

    Seeing as how this is called an open thread, something that I’ve been wondering about in regards to nicknames in the political world.  If trump called Speaker Pelosi, “Nancy”, what’s stopping her from calling him Donny instead of Mr President?  Is it just her sense of decency or are there rules in place that say you can’t call the prez by his first name?

    For that matter, what about the Pocahontas nickname?  Why doesn’t Senator Warren call him something like Don The Con or whatever?

    Curious if there’s any legal reasons for this and also people’s opinions.

    • Rayne says:

      I need to think about the golf cart repair bit because I know a guy who does what looks like really stupid stuff with his course’s carts. Now I wonder if he’s got a racket down. Hmm.

      As for the nicknames: there are two big reasons (though they aren’t the only reasons) why Speaker Pelosi and Senator Warren don’t use nicknames in the way Trump does. First, women are trashed for doing anything derogatory which is seen to belittle men, especially older white men. Second, Democrats are also hammered by corporate-owned media for doing anything negative.

      It’s not worth setting themselves up to spend all their time swatting away troll/bots attacks and corporate media’s reports while they are trying to break out of Trump’s lock on the news cycle.

      I also don’t think the negative nicknaming will work with a volatile malignant narcissist. He’s likely to go overboard in response, again locking up the news cycle.

      Legal reasons? Perhaps somebody else will have a reason but I think they can rely on the First Amendment if they wanted to go negative on him — it’s just not worth it.

    • Arj says:

      This is simple dignity.  Name-calling is for those (children especially) who don’t yet know any better.  These women are light-years ahead of that.  I loved the Speaker’s comment that, as a mother of five & grandmother of (I think) nine, she knew a tantrum when she saw one.

      • Rayne says:

        She took a tack women and parents understand readily, even made Trump look like a bad parent at the same time because he was doing what no sane parent would do in front of kids. It’s hard to push back at her approach without looking like one is throwing another tantrum.

  18. Howlnaround says:

    A point was made about the crashing of the golf economy. And I will make two points. The first here in northern Michigan it was said in the 00’s boom more forests were lost to golf courses than clear cutting. But since then several high end courses have closed and turned into hop farms for the brewing industry or our now returning to their natural state.
    But yes as a life long golfer who has played bad golf at many of the areas best courses this industry is a boon diggle for the richy rich. Thanks Rayne for the topic, cu at the next Meet-up. Lol

  19. Stew says:

    really off topic

    Does anyone recall a book about the Nixon campaign where subliminal text was inserted in the campaign ads?

    The word was
    Chappaquiddick

  20. Flachbau says:

    how about something more subtle … play the Donald and simply let him win. Maybe we should ask Xi and Abe if this works?

  21. Stew says:

    Wasn’t it nyt that recently ran an article about the precipitous decline of golf, and it’s adverse impact on golf retirement properties?

  22. punaise says:

    Maybe the NRA could “sponsor” shotgun starts at tournaments….
    _
    The bit of (wildly mediocre) golf I play tends to feature me zig-zagging around the course, thrashing through the bushes to find errant drives and approach shots. Fortunately I’m generally resistant to the poison oak one encounters in the barrancas, gullies, and canyons of course in the Bay Area. Watch out for rattlesnakes, however.

    The course my surgeon brother was a member at for a few years (Fountaingrove)was ravaged by the Tubbs Fire on 2017 that swept down from the mountains. Clubhouse, outbuildings, nearly everything was incinerated. As were many of the custom homes lining the circuit. Driving through there later one had the eerie contrast of green fairways and sparkling white bunkers set against charred remains.

  23. Howlnaround says:

    Rayne,
    M72 just east of Acme, on the south side of the road 18 holes turned into the prettiest hop farm. A southern exposure with good drainage and put up 12 frames to hold the plants and we are in.
    I saw mt wheel on MSNBC and it brought be back into the rabbit hole. MT and I went to Iowa in 04′ for Howard but you knew that. They I see your byline hook. Wishing you and yours the best. Still on the right side of the grass (13 years stage 4), two grandsons, and managed to keep our house.

    • Rayne says:

      Thanks for that link. I haven’t read much about that SDNY suit so far (I can’t keep with the rest of the crew here!) — what’s interesting is the Virginia state laws applied in addition to federal laws.

      Roger might be rogered. LOL

  24. JD12 says:

    re DWoolly @ 8:26pm

    You could do that but you really don’t have to, carts are a racket anyway. Remember the report a few months ago that the Secret Service had spent $300K on cart fees?

  25. e.a.f. says:

    Loved it! Too bad you weren’t’ in Palm Springs back in 2009. You could purchase a golf course for a little over $500K. So, such is life, but all you need is a piece of land and really start at the base. When you go to purchase the land, you offer $10M over the asking, then have them give you back the $10M minus the fee for having done so. Hey it works in Greater Vancouver, British Columbia, where they launder more than a billion a year via real estate. So keeping that in mind and the golf course community, you can help your corporate friends out. They purchase a “retreat” for their executives. You take care of it for your company and send them a bill for substantially over the real price and the golf company gives you back the overage, after they take their cut for their “fee”.

    You don’t even need to do the monthly min. fee thing. You’ll have ‘friends’ who have memberships as part of their pay package or they buy it themselves and write it off. Now that expense which is written off on the taxes, could be increased substantially so you could get a larger deduction. there could be cases where you send your “entertainment” bill to the company, they pay the golf course and the golf course gives you half back, both parties are happy.

    Add a casino. In British Columbia they launder a billion a year via casinos. A hockey bag holds approx. $700K in $20 bills. So with the casino you can have all sort of fun laundering money. They come in with their cash, get the chips, play for awhile, bring the chips back to the cashier, who gives them a cheque for the amount of the chips. It is now clean money from a “reputable” corporation.

    If you’re a nice golf club you could also lease out safe deposit boxes. People would pay all sorts of money to keep their money, ill gotten gains close by. fees on that could be substantial, but make sure they can’t get into it via the ceiling.

    For those houses, have a gardening service, set the fees higher and all that money just comes in.

    Have a cheque cashing service or permit people to purchase items and put the item on their credit card along with a “cash advance”. You can move a lot of money that way. If no real record is kept of the shop’s inventory, you can have a lot of fun.

    Used to be better at money laundering ideas, but this has been fun. thank you. my inner crook just got out for a walk around my new golf course. Oh, one more thing, a private, secret poker game is a great way to exchange a great deal of money without any one knowing. You loose $50K……but that is what you owed the other person.

    • Gnome de Plume says:

      Bingo.  I worked for a developer back in the late 70’s in Houston.  He was laundering his own money by getting the appraisal on a new property to come over in however much money he needed to put down on his next property.  The bank supplied the loan for the current project, plus the equity needed for the next project.  It worked until the Reagan crash of the early 80’s.

    • Rayne says:

      Spot on with the real estate sold at premium. That palatial place on the water Trump sold to a Russian is a perfect example, just wasn’t located in a golf course development.

      Going the casino+course route in the U.S. could be difficult if the owner had a series of casino failures already combined with scrutiny from law enforcement.

      But the leased deposit boxes? Nice touch — and it’d also provide an opportunity for kompromat collection.

    • Avattoir says:

      Every time I read about this or that supposed wave of crime or sin in the Land of the Eskimos, I think of Coen bros-level of tall tales of that region, Paul Bunyan and Blue, Al Capone’s supposed gigantic steel cauldrons storing vast volumes of whiskey said located dead under the mean main streets of Moose Jaw Saskatchewan, and that Burl Ives song:

      • Avattoir says:

        AFAIK, not only is there nothing Wild West at all about Saskatoon, now or in its brief history, there isn’t really even any “hill” there for Dan and Sam and the woman named Lil to be buried in the side of, unless they built one of those fake mini-mountains for a bunny-level ski hill.

        • Lydian says:

          I agree. It’s a vast flatness amid Saskatchewan; even the river running thru it has shallow banks. I lived there during my formative years and even now it still strikes me as being more of a college town.

  26. Gnome de Plume says:

    I am still focused on how to get the money out of a sanctioned country into the “free” world in order for the cash to find a good home.  That is where the nice folks over at Danske and Deutsche Bank come in handy.

    • Rayne says:

      I can’t rule out other ‘friendly’ banks. I’ve wondered which local banks come in handiest — is that why Federal Savings Bank’s Steve Calk ended up on the president’s council of economic advisers, for example? or was his appointment a chit for Manafort?

  27. Carolyn Z Lawrence says:

    There are other benefits to owning golf courses, including tax benefits for “conservation easements”. This article discusses this in relation to Trump’s properties:
    https://www.cnbc.com/2018/01/12/this-tax-move-trump-used-could-get-wealthy-investors-in-hot-water-with-the-irs.html

    Fun fact: On his DC area course, Trump built a “river of blood” memorial claiming that during a civil war battle on that spot the potomac turned red from all of the blood. Historians have confirmed that a battle never occurred there.

  28. Eureka says:

    Schooley: “Working on a truly bone chilling horror story about a third party candidate running as “the true progressive” in 2020.”
    https://twitter.com/Rschooley/status/1089211563477594113
    “It involves a million people who have lost all memory and post endless tweets about voting their conscience.”/…/ “Someone beat me to it…”

    BOLDFACE this:
    David Neiwert: “This is where Seattle Sonics fans will save America.… ”
    https://twitter.com/DavidNeiwert/status/1089218679110160384

  29. burnt says:

    I look at what you’ve done with this post and can’t help but think this is some weird, wonderful combination of Bmaz’s trash talk and Empywheel’s close reading that I just can’t believe. Send out the forensic accountants straight away.

  30. I Never Lie and am Always Right says:

    No one has ever accused me of playing golf while on the golf course. Part of my problem is that  I keep refusing to see my  Puttiatrist.

    Most interesting golf course that I’ve seen is the public course in Death Valley. There’s less sand in the sand traps than on the fairway.

  31. Jeanne D says:

    I want to thank you from the bottom my heart for giving me another tangible reason to dislike the THREE gold courses I have in my 6,000 person town. Also as a nurse my unscientific study of golf players is they tend to view me as hired help and not the licensed professional that is going to keep them alive and get them out of the hospital. (Sorry, went off topic, really hate golf.) Seriously, brilliant supposition, not sure if anyone from NJ or FL is going to look into it, however.

  32. Fran of the North says:

    My final two years in high school I worked 25-35 hrs per week at a private men’s only country club in suburban Chicago. I was a bar-back, ostensibly there to stock the bar, cut the fruit and wash the glasses. On occasion I poured beer and mixed drinks, particularly in the men’s locker room.

    There were 3 bars, the main one served the formal (tie required) dining room and banquet room where the big member parties hosted by the club, and member hosted (think weddings etc) were held. There was a bar in the locker-room which was back to back with the bar in the casual dining room – aka ‘the 19th Green’.

    At that club, no cash (other than tips, which many of the cheap or entitled didn’t pay). Everything was on your chit, and bills were tallied and paid monthly. So there might have been some padding added, how would you know?

    Also, there were regular BIG stakes card games both in the locker room and in the 19th Green.

    • Rayne says:

      Ooooh…I forgot about poker games and other forms of gambling. There are more regulations on how these are run depending on the state but an unofficial, off-the-books poker game?

      And thanks for the reminder about the cashless nature of these courses/clubs. Something both my friend and I forgot about, took for granted — which is EXACTLY the expectation of wealthy who belong to luxury courses/clubs. It’s second nature, like breathing; once you’re a member you only have to remember your number and use it when asked. If you’re there often enough the staff will remember your number once they recognize you, especially if you’re a better (or lousy) tipper. A regular member will take note of a new staff member when they bumble and ask for a membership number instead of saying, “Thank you, Mr. So-and-So. Would you like another Macallan, sir?”

      When the monthly course/club bill shows up, their accountant pays it without asking questions. Who’s going to ask the boss if they had 3 or 6 Macallans one Saturday night?

  33. orionATL says:

    rayne innovates:

    crowd-sourcing investigation of money laundering possibilities and activities in high hindend golf courses, say like trump’s turnberry and aberdeen courses ( around the world, with purchases beginning in 1999, trump is said now to own 17 courses in all).

    at least on his scottish golf courses trump has apparently lost a lot of money for years,nonetheless loaning those businesses additional of his personal monies.

    and then there is this set of questions:

    https://www.newyorker.com/news/swamp-chronicles/where-did-donald-trump-get-200-million-dollars-to-buy-his-money-losing-scottish-golf-club

  34. earlofhuntingdon says:

    Liquor and tobacco distribution are known conduits for organized crime. I imagine you could push a lot of both through golf and other private clubs. You’d need a good accountant to balance the books and to keep Inland Revenue and Customs and Excise off your back, but that’s true for all money laundering.

  35. skua says:

    Buy say half of consumables (raw produce, fertilizer, pool chemicals, cleaning products, light globes, linen, tableware, machinery parts and fuel) privately with proceeds of crime money. Burn the receipts.

  36. earlofhuntingdon says:

    I’ve read, think it was a British publication on money laundering a few years back, about laundering in the scores of resorts set up in remote locations – Pacific, SE Asia, Caribbean, former satellites on the Adriatic coast.  Remoteness was key because the entire resort was a Potemkin Village. That is, the resort was real, with building, facilities, a few caretaker staff, and what not, but all the business it did was fake: hotel, restaurant, golf course, casino, houses and condos, the lot. 

    Apart from the usual corrupt accountants, auditors and lawyers, you need to buy a few corrupt officials, and to keep the locals and other unwanted visitors away, happy or scared, no matter as long as they remain ignorant.  Helps if there are legit resorts in the general area so that you have legit tourist numbers, traffic patterns, airport arrivals and departures, etc.

    Operate for several years at high profit via fake books and an equally fake audit trail, then sell to a real business or another launderer at grossly inflated value.  The next launderer does the same.  If the real business fails, launderer buys it back for a song.  Wash, rinse, repeat. The last guy in the chain can overpay, then raze the place when it fails to turn a legit profit and take a yuge tax write-off.

  37. CCM says:

    Sorry, but I have to go there. DT is the reverse Walter White from “Breaking Bad.” Walter was uber competent at many things, chemistry, plumbing, manipulating people; but had a peculiar inability to launder money. DT’s core competency seems to be money laundering, but little else. Runs businesses into the ground, shuts down the gov’t over a moronic wall, useless children, failed marriages, but seems to actually be good at laundering money. There is competition, Panama, City of London, Cypress, any number of Caribbean islands, but the autocrats and criminals due come to him. Walter White could only come up with a lousy car wash. Again sorry but I had to get this off my chest.

    • Rayne says:

      Excellent observation. There’s something about Trump’s family background as well as his personality which make him well suited to businesses in which money laundering is common.

      Something about a shell of a human grasping readily the shells of legitimate business.

    • BobCon says:

      Of course, like Trump, Walter White seems to have made life much worse for pretty much everyone in his orbit — Skyler and Walt Jr., Jesse, Hank, Saul…

  38. Jeff B says:

    The legal wealth transfer tools to a avoid estate and gift tax have far more effect in preventing the super wealthy from paying their fair share.

  39. Fran of the North says:

    Banged Him Like a Gong!

    On the way home yesterday from the 30 below zero north, I heard this song and while perhaps not exactly how Marc Bolan and mates intended (Dirty Sweet), I send this one out in praise of Madam Speaker.

    Individual 1 certainly does have “The teeth of the Hydra upon you.” And that Hydra is the afore mentioned SotH.

    Enjoy!

  40. cfost says:

    A few other possible launderables:

    Interior design, custom furniture, custom lighting systems. And keep in mind, these people don’t just have one or two properties. What about the expensive car at each property?

    In the late 80s/early 90s, Most of my working life was spent working at Palm Springs-area clubs like El Dorado (big money, older), Vintage (big money, newer), Morningside (Sinatra, Hope, Ford), and the Sunnylands ghetto (Jews weren’t allowed for many years, so folks like Annenberg built their own). A typical multi-million dollar second or third home would have a $100,000 dimming system for lighting, $200,000+ for custom furniture, and $750,000+ for interior design. These clubs don’t bother with signs at the entrances, and their security is top notch. When one drives through those gates it really is like entering a different world. And membership, in addition to the financials, is typically by invitation only. Loyalty, they need loyalty.

    • P J Evans says:

      Custom furnishings I can see, definitely. Private dining rooms, private meeting rooms – those get the really nice furnishings, and the more public stuff you can bill the same on paper but get the second or third tier nice stuff, not the top grade. (When office chairs can run you a thousand dollars, legitimately, there’s room for padding.)

    • Rayne says:

      As I wrote in the post, “Every product or service a course needs” — all of these purchases at the inception of the course/club, during its normal lifetime operations, all of them can be used to rake in unreported income. All the product and service suppliers could be asked to kickback part of their receipts under the table; they could hand over a bribe to be considered as a vendor. Shell companies can be used as intermediaries which inflate the costs.

      I visited a house this past year with a million bucks in automated windows with hurricane shades. It’d be a piece of cake to tick up the price by a five-digit amount — the doormat probably cost that much. The owner wouldn’t miss it.

  41. OldTulsaDude says:

    The more I look at this the more it seems possible that the kompromat the Russkies hold over Individual-1 revolves around the cash purchases – including golf courses – made by the Trump organization since 2010 as reported by WaPo.  If that money was actually the “Russian loans” that Eric talked about, then, Houston, we have a problem.

    • Rayne says:

      That’s *my* theory. There was a carrot and stick used because Trump has been unreliable, shall we say? His entire family was roped into this C-and-S, too, so that none of them can become unreliable as well.

      Carrot: Trump’s ego project — tease him for years with the nearly-untainable Olympus, Trump Towers-Moscow

      Stick: Trump’s most pleasurable hobby with which he identifies personally and in which his entire family is now mired, Trump-owned golf courses.

      They had to use a different stick because defenestrating a high-profile American especially after election looks like an act of war.

  42. OldTulsaDude says:

    The humiliation of the exposure as fake of his carefully constructed “self-made billionaire businessman” facade would be more than a narcissist like Individual-1 would be able to tolerate.

    And how could Ratfucker Roger resist this temptation: Fore! More years!

  43. posaune says:

    Avattoir @ 12:37

    Excellent comment! You’ve really got the real-estate pass-off right! (I loved the bit about developers camping in the local planning office — so true it gave me shivers!)
    I’ve seen developers jump through the approval hoops, flipping the land after each approval — with a sequentially inflated value at each juncture, after which nothing is built! Land @ 20x its actual value, just sitting there with dozens of varied approvals: zoning, subdivision, renewal, site plan, etc.

  44. cfost says:

    Upon reflection, it seems to me that many of Trump’s business ventures were undertaken in a way that allowed him to extract wealth for his personal benefit at the expense of the business itself. The airline, the casinos, the country clubs, the online “university,” etc. And then there is the jet, and the licensing deals. If he was conning America by running for President, and his primary intent was to make money off the scam, regardless of the outcome of the election, then it would fit his m.o. But there is a question still hanging out there: how did Trump get from June 2015 to June 2016, how did he get through the primaries? Blind luck? I think not.
    A man named William (“Bill”) Bone developed many of the Palm Springs country clubs, and if anyone knows the ins and outs of country club finanace, it is him. He’s made many millions doing that. It would be interesting to compare his model and methods with Trump’s.

    • P J Evans says:

      I think in the primaries, it was that the votes were split so many ways that a majority wasn’t attainable, so whoever got the most pluralities won  – and the GOP-T had spent years training its base that “experienced politician” was a bad thing, as well as pushing, however subtly, “reality TV” , so voters saw familiar-from-TV name and lack of political experience and went with him.

    • Rayne says:

      I really don’t care how the legitimate developers build courses+clubs. They do it like any other legitimate real estate development and business. That’s textbook. Business plans abound across the internet for them.

  45. viget says:

    All of this talk of the various money laundering schemes begs the question that’s been floating around my brain for several months now: How much of the money supply is actually untainted by criminal proceeds?

    What percentage of world wide economic activity is actually purely “legit” commerce?  It’s a sobering thought if that number is pretty low…..

  46. P J Evans says:

    @posaune
    Get the approvals for building one kind of project, let it sit unbuilt for a couple of years, sell the land to someone else who builds a much denser/less acceptable project: “hey, the permits were still valid!” to everyone who complains. (Happened in my area. I think they changed the process so that permits now expire after a year.)

    • posaune says:

      Yep.  Around here it’s 37 month approval for subdivision; infinite time approval for site plan, LOL.

  47. Lopsotronic says:

    Marcy Wheeler’s thinking about golf courses but missing the eight hundred pound gorilla of American money laundering: 26 U.S. Code § 7611. Napkin math on religious pol funding versus church tithing equals a ginormous pile of phantom money from places like frickin’ Mississippi.

    • bmaz says:

      Well, to quote the late great Strother Martin in Cool Hand Luke, I think what we have here is a failure to communicate. First off, this post is by Rayne, not Marcy. Second it is a weekend semi tongue in cheek post available for open discussion. Lastly, we kind of understand law and laws here. Thanks, and welcome to Emptywheel.

    • Rayne says:

      Dude. Did you not read the very first line of this post? If you can’t even bother to read the first line, why should anyone take the time to read your comment?

      FOR THE REST OF OUR READERS WHO ASK WHY I POINT TO THE BYLINE AT THE BEGINNING OF MY POSTS: ^^^ This is why. ^^^

  48. BobCon says:

    Since his is an open thread, I thought I would throw out a link to this tweet which links to a 1992 Spy Magazine article – prominently including Roger Stone and Paul Manafort — about DC lobbyists championing murderous dictators (article starts p. 52):

    https://mobile.twitter.com/kbandersen/status/1088801527874113536

    It’s no surprise that outlets like NPR and the NY Times will run pieces condemning dictators, but in their coverage of Stone and Manafort glide over their deep involvement in their vicious human rights abuses.

    In large part I think it is due to their almost pathological commitment to both sides narratives, which forces them to reduce Stone’s evil record to “dirty tricks” lest they let anyone think they were taking sides.

    But I also think a piece of it is the reliance of these outlets on the PR industry that now employs a legion of GOP hacks (and yes, some Democrats such as Tony Podesta). They feed off of the pitches from the PR firms, nuzzle up to them for narratives, and use them for sound bites because they lack the ability to make stories in any other way. They know better than to condemn Stone in any serious way, because if they tick off their PR industry “friends” who else can they turn to for a talking head to justify tax cuts or reducing the minimum wage to provide the balance they crave?

  49. Lopsotronic says:

    Apologies to Bmaz and Rayne for my phrasing, this is a good thread, and EW is more or less my point of reference for all things 45 and Legal. Golf courses a solid gold avenue for ML, like real estate but bigger. Onetime bunkmate of mine, Italianish guy, had a typical drugs/pimp setup same time as his “house flipping” business was rolling, can’t convince me it was unrelated. Didn’t even do anything to the houses, just bought em and sold em for three times as much.

  50. Cathy says:

    Pulling in yet another direction…

    IANAL and curious about the role Friday’s hearing plays in Manafort’s DC case.

    WaPo points out “Manafort had asked not to have to be present in court Friday, but Jackson declined and said she wanted him there because of the significance of the issues being heard and to be certain he and his defense team were on the same page.”

    https://www.washingtonpost.com/local/legal-issues/paul-manafort-due-in-court-to-face-mueller-probe-allegations-he-lied-after-pleading-guilty/2019/01/24/6e92b6f0-2001-11e9-8b59-0a28f2191131_story.html

    If the detailed discussion needed to determine whether Manafort breached his plea agreement requires a closed-door hearing, and ABJ needs that determination for sentencing, what were the issues of significance that were heard Friday?

    Was Friday’s hearing meant to lay out all issues ABJ intends to use in determining sentence, postponing discussion of only those matters that needed to be shielded from the public?

    I’ve tried three different news sources and get the feeling I might be getting info from reporters who know about as much as I do about legal matters. Either that or they’re writing to an audience that has much better background understanding than I do.

    • Alan says:

      IMO, it’s best just to wait and see what shows up next on the docket, which will likely be something from the judge and give some indication what happened on Friday and where she wants to go with the case.

  51. Cathy says:

    @Alan – So maybe not immediately obvious? OK…thought I was just looking in the wrong direction. Cheers!

  52. MattyG says:

    When Stone said “I will not bear false witness against the president”, isn’t that a flouncy way of implying he’s prepared to testify *truthfully* against him?

    • NorskieFlamethrower says:

      I noticed that right away. Stone saying I will only tell the truth about Trump or Russia or hacking is just snake hissing code that means that if Trump doesn’t come through with a pardon he will bite him where it hurts. This guy has been involved in so much slimy stuff and been protected since the early ’70s by the corporate media because he’s “so colorful”. This guy is a lot smarter than G. Gordon Liddy and he will tell all if he can slither out from under hard time in federal prison.

  53. Pablo in the Gazebo says:

    I just read an interesting piece here that speculates Mueller’s arrest of Stone was secondary and that the three raids carried out on his properties were the goal.  Agents were said to have walked off with boxes of electronic devices.  It also recognized the uselessness of Stone as a witness.  This should not be a surprise to careful readers of these pages, but the author’s conclusion is that rather than Mueller’s investigation entering the stage where a report of some kind is imminent, it is just beginning to “heat up”.

    https://www.nytimes.com/2019/01/26/opinion/roger-stone-indictment-mueller-investigation.html

    • bmaz says:

      Julian’s piece has some very salient points as to data and document collection. That is all fair and good to acknowledge. But if that was the “only” goal, they could have just served crack of dawn search warrants. That is common, and they clearly had probable cause. But they did the arrest, presentment and coming arraignment this Tuesday too. There are clearly bifurcated bases here for the action you have seen. And the indictment reads different than it would if it was only about the search.

  54. e.a.f. says:

    Viget, how much is legit in our world’s commerce? We’d have to stop the presses for one day and count. It might be disturbing. The “dirty” money gets mixed in with the un dirty money and its hard to separate. In British Columbia, Canada, they now know a billion a year was laundered via the casinos. Now the casinos are all licensed by the British Columbia Lottery Corporation. (government corporation) The casinos must pay the BCLC. The BCLC in turn gives grants to charities and other public entities in the community the casino is located. Now that money could go to building a new fire hall, play grounds for kids, but originally that billion came from drug money, their drug profits. Now in other places, “crime organizations” purchase legitimate corporations. Some times crooks buy stock, so all of it becomes intertwined. It is rare that crooks still put money into safety deposits because once electronic banking was developed you didn’t have to travel to move your money around. If you consider that the top 28 billionaires in the world have as much money as the bottom 3 billion people in the world and some of those billionaires have acquired their money via illegal methods, then it gives you a fair idea of how much money is “illegal”.

    Some one recently wrote if you made $21K a year you were in the top 1% of those in the world, in financial terms. $21K is nothing in some parts of the world and others its a fortune. For many who live in G-20 countries, if you’re only making $21K a year, its a sub min. wage job and most likely not illegal.

    At one time they reported there was no paper money left in the U.S.A. which didn’t have a trace of cocaine on it. In British Columbia, 1970, 80s weed sustained the economy, allegedly. Our weed was traded for cocaine, from Americans, straight across.

    When we talk about illegal money there is the money which comes from the sex trade, drug trade, booze trade, illegal armaments, betting, extortion. Then there is the illegal/dirty money which comes from conflict diamonds, resource extraction which destroys environments and breaks laws along the way.
    My guess is only a small fraction of the world’s money is legally owned and obtained through legal means. How small a fraction? well if it was all taken out of the economy, we’d be back in the stone age because some “illegal” gotten gains become “family” money, etc.

  55. Trip says:

    Since this is an OT thread: 60 Minutes peddling Howard Schultz’s potential run for president was another crappy case of promoting the moneyed elite. Why did he deserve his own segment? He offered nothing of substance except touting his ‘rags to riches’ success as a CEO, and being “Centrist”. He criticized Dems for advocating healthcare for all, in that “the country can’t afford it”. He previously held hostage a professional team, for public tax funding toward an arena (to his personal benefit), and then sold the team. If you look at who benefits financially from arenas, it is the arenas. So why should corporate welfare be considered acceptable spending while healthcare is not, for one example?
    https://www.weeklystandard.com/james-thayer/build-it-or-else

    The piece was packaged fluff again, bowing to another billionaire with narcissistic ideations that he alone, sans party and no governmental experience, can solve all of the country’s problems (while potentially splitting votes to seat Trump again). 60 Minutes should be ashamed. End of rant.

    • earlofhuntingdon says:

      IMHO, Howard’s story bears less scrutiny than Kamala Harris’s.  He was a very successful salesman long before he moved into coffee.  He made his stake and found a passion in premium, high-priced coffee, more in the sense of a niche opportunity than as a culinary delight.

      Howard worked hard and made a fortune.  He lived the American dream.  His thousands of staff worked hard and did not.  Minimum wage and all that for those who rowed his coffee galley is one reason Howard’s the billionaire and they can’t get enough work in a week to live on.

      His staff were once evaluated by a simple metric – how many ounces poured.  Cleanliness, being on time, schmoozing well with frequent customers, making them feel like there’s no other place like home didn’t count without the ounces poured.  Unlike aluminum siding sales, there were no fancy commissions at the end of a successful day, just the ability to keep a minimum wage job with erratic hours.  His use of a single metric was so extreme that it contributed to the EU establishing labor rules that required in person evaluations of staff using more than a single arithmetic metric.

      Like big box stores, part of Howard’s success is being savvy about real estate.  It is also built on inventiveness – mobile coffee wagons, for example – and a willingness to sell coffee where no man had gone before.  Unlike them, it is also razzmatazz.  Fake names for small, medium, and large was just a start.  His company is also a famous user of global tax havens.  Through aggressive transfer pricing, a standard technique, and charging high fees for marketing, IP and other “services,” he has succeeded in shifting his tax burden to the lowest tax countries on the planet.

      Howard spent years learning about coffee and how to sell it to retail customers at premium rices from the then few craft makers of excellent coffee.  This was at a time when Americans had drilled into them that Chock full o’Nuts and Taster’s Choice were great coffees.  When he had the money, he tried to buy them out.  When they refused – because they loved the work and had succeeded against the odds in carving out successful niches – Howard tried to put them out of business.

      Howard is as ruthless and obsessive as Len Leo.  A guy who can sell billions of dollars a year in coffee-flavored sugar drinks to a population suffering from a plague of obesity, diabetes and metabolic syndrome might not be the person to set American priorities in the aftermath of Donald Trump.

      • P J Evans says:

        Overpriced, over-roasted coffee – which is why all those flavorings get added.

        (Schultz was getting roasted online by just about everyone. I think his candidacy is DOA, or should be.)

        • earlofhuntingdon says:

          As is true with real ice cream – where the key ingredient is expensive cream – the key ingredient in a coffee drink – coffee – is the most expensive.  As with ice cream, any additive, such as whipped air and sugared creams and flavorings, reduces cost and increases profits.

          Howard is a successful salesman, but he would be a lousy president.

  56. harpie says:

    WOW!

    https://twitter.com/realDonaldTrump/status/1089881244312178688

    5:41 AM – 28 Jan 2019 Howard Schultz doesn’t have the “guts” to run for President! Watched him on @60Minutes last night and I agree with him that he is not the “smartest person.” Besides, America already has that! I only hope that Starbucks is still paying me their rent in Trump Tower!

    • harpie says:

      Also, from NYT:

      Trump lifted sanctions on close Putin ally Oleg Deripaska yesterday — and one of Deripaska’s companies promptly responded to the news by hiring a member of Trump’s transition team. >>>

      NYT: […] After the sanctions were officially lifted, EN+ announced the appointment of seven new directors under the deal, including Christopher Bancroft Burnham, a banker who served on Mr. Trump’s State Department transition team and worked in George W. Bush’s State Department.

    • earlofhuntingdon says:

      That is usually how Trump signals that a guy like Howard is exactly who he wants to run against – one aluminum siding salesman vs. another.  Glengarry Glen Trump.

      It suggests that the last person Trump wants to run against is a successful woman – any of the current top Democratic hopefuls – who has forgotten more about power, life, work, community, and shared sacrifice than Donald Trump ever knew.

        • Rayne says:

          That bit REALLY infuriates me the most about that tweet. The dragging-on Emoluments Clause lawsuits is bad enough but these flagrant conflicts of interest shoved in our faces takes the cake.

          Edit — Although now that I’m a little less hot under the collar I should point out Trump fucked up here. He can’t separate himself from Trump Org businesses and claim to know nothing about the Trump Tower-Moscow project when he’s sweating out tiny details like rent paid by a coffee shop in Trump Tower-NYC.

          I don’t care for Starbuck’s huckster’s candidacy but if he can trip up Trump this easily, keep going, Howard.

          • earlofhuntingdon says:

            Yep.  Every time Trump opens his mouth, he digs his hole deeper.  It should not be hard for Mueller, SDNY, the NYAG, or any prosecutor or plaintiff to prove that the Trump “Organization” is really just Donald J. Trump in costume.

        • earlofhuntingdon says:

          The twt supports a more general argument:  Trump is a severe micro-manager.  The guy is president of the US and has time a) to obsess about staying out of jail, b) to track in detail how well his ne’er do well sons are managing his supposedly global empire, and c) to keep tabs on the rent paid by a single retail outlet at one building he owns in NYC.

          A guy that severe a micro-manager would not delegate to an aide even something as important as picking up of a bent dime on the sidewalk.  Trump’s repeated claim that he knows nussink about whatever Mr. Mueller is interested in is worth about as much as a Trump promise.

          • harpie says:

            …a really good point to keep in mind! [I hope someone is taking screenshots of every TrumpTweet…I have not been able to master that.]

          • P J Evans says:

            And that includes his time as “Mr Big” on his unreality TV shows, where the production people who did all the actual work would have to run around re-editing to make things support whatever he’d just done, even though it trashed the previously-filmed stuff.

    • Rayne says:

      Thanks for the link and your comment. Nice to see you again at emptywheel; please use the same username each time you comment so that community members get to know you. Thanks again.

    • Rayne says:

      This bit from that Trump Inc. podcast, I think it was Adam Davidson:

      13:13 I would say there is some piece of information we are missing, because none of the explanations make sense.

      The last time I heard someone say nearly the same thing, word for word, was in the summer of 2000. I spoke with a couple of traders who handled hedging for a Fortune 100 transnational corporation; management had tasked them with figuring out what Enron was doing, how they were so successful. They said almost exactly what Davidson said. They simply couldn’t figure out how Enron was doing it.

      If it’s too good to be true, it probably is.

      Thanks for the link.

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