May 10, 2009 in Opinion

Smart bombs

Stay east, Forbes!

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Forbes magazine, located a couple of miles from Wall Street, hatched an idea for an article on the Scam Capital of the United States. That’s a fun angle and easy on the travel budget, since the magazine is situated in Scam Central. There’s Bernie Madoff, the investment banks that spun mortgage-backed securities into a worldwide financial meltdown and humongous government bailouts, the ratings agencies that stamped this mess with AAA seals of approval and the asleep-at-the-wheel Securities and Exchange Commission. To offer a sweep of recent history, there’s the cast of characters in such books as “Den of Thieves” and “Liar’s Poker.”

But, no.

Forbes writer William P. Barrett decided to train his sights on Spokane as the “Scam Capital of America.” So the article denotes the Spokane Stock Exchange, the River Park Square garage, the diploma mills and other assorted controversies. The premise, it seems, is that pound-for-pound Spokane is the shadiest place in the nation, and he isn’t talking about the trees.

Strangely absent from the litany is the Metropolitan Mortgage and Securities debacle, which is the heavyweight champion of local financial mayhem and a precursor to mortgage-related meltdowns that occurred on a much grander scale elsewhere (like, say, New York, which is home to Forbes. Have I mentioned that?). Metropolitan’s failure hit some 16,000 investors who held about $600 million in unsecured corporate bonds and preferred stock. One executive was convicted of felonies, and several others settled accusations of fraud.

I asked Barrett about the omission, noting that it would be like featuring Phoenix without mentioning S&L grifter Charles Keating. He said Met Mortgage didn’t strike him as “a historically seminal event or illuminating cultural root,” like Keating or the Spokane Stock Exchange. The whole article leverages fuzzy perceptions like that with Wild West clichés. When I asked what specific metrics he used to land on Spokane, all he offered was a general sense that he was onto something.

Well, my sense is that the Met Mortgage meltdown was too large, too traditional, too, um, New York-like to mention. Just your basic mishap where people lose their life savings or their jobs. Nothing for Easterners to laugh about there.

I also sense that when people think of scam capitals, they’ll continue to start with New York, even if it isn’t perceived as a place of “rugged individualism” populated with rubes ripe for the taking.

Fact-checked. In Wednesday’s column, I cited a factcheck.org item that claimed that President Barack Obama was wrong when he said 90 percent of recovered crime guns in Mexico come from the United States. The organization has downgraded its claim from “not true” to the president’s claims being unsupported by government statistics.

Bottom line: The influx of weapons is a big problem, but the actual figure is difficult to quantify.

Smart Bombs is written by Associate Editor Gary Crooks and appears Wednesdays and Sundays on the Opinion page. Crooks can be reached at garyc@spokesman.com or at (509) 459-5026.

Seven comments on this story so far. Add yours!

• 

  wmpb on May 10 at 8:27 a.m.

  To get a fuller view, read the Forbes article for yourself at this URL:

  http://www.forbes.com/forbes/2009/0525/106-investment-guide-09-scam-capital-of-america.html

  Previous Forbes coverage of Spokane:

  “The Spokane Hustle Continues,” April 17, 2006 (table at bottom, citing a Metropolitan Mortgage case):
  http://www.forbes.com/forbes/2006/0417/036.html

  “Probably Not Mentioned in Chamber of Commerce Promotional Literature,” December 9, 2002 (table at bottom):
  http://www.forbes.com/forbes/2002/1209/068.html

• 

  Ron_the_Cop on May 10 at 1:55 p.m.

  Gary others were not happy with Barrett’s column either. Folks might want to read the comment thread too at the link wmpb provided.

  Folks seeking more info might want to read my post:

  ‘Fraud: Scam Capital of America’ vs. an ‘Army of Davids’

  at:

  http://friendsofmarkfuhrman.org/blog/?p=138

• 

  liarsinnews on May 10 at 7:39 p.m.

  “Stay east, Forbes!” by Gary Crooks. I was amused by his mention (again) of Metropolitan Mortgage, criticizing the Forbes story of not pointing out to the author the Securities debacle he missed in his story. I`m sure everyone in the Lilac City remembers the Spokesman Review`s stories, for weeks picking at all the bones of the Met Mort story. Crooks, mentions the S&L scandal talking about Charles Keating. Crooks should have mentioned the Washington Mutual failure, and the shenanigans that went on there. You know, like the WAMU executives from Spokane attending a gala party in Seattle, a story the SR refused to tell its subscribers about the huge problem loans going down the tubes in our community. Or yours truly loosing money in a small checking I`d reported to Doug Floyd when WAMU lost all the records even though I furnished them my checking statement. My account numbers evaporated. But it is`nt`t the first time at least with me, Crooks tried to weasel out of the SR covering up stuff about Judge Cozza rendering a decision which proved he had not even read the documents furnished him, and ruled in favor of City in the River Park Square case. Crooks tried to BS me that the SR had covered the story but forgot to mention Judge Cozza not even reading documents that had been submitted to him but still rendered his decision against the citizens of Spokane. So much for “SMART BOMBS”.

• 

  Ron_the_Cop on May 11 at 5:04 a.m.

  Gary,

  A new post in the Forbe’s comment thread worth a read:

  Posted by spokelement | 05/11/09 02:58 AM EDT
  Spokane City government is a big part of the problem. Manipulated public works contracts and no bid contracts have been common for years. Poor or no fiscal oversight is common.

  The regional solid waste system seems to be run for the benefit of a few private sector companies, with competition selectively restricted through a flow-control ordinance. The cost for county-wide municipal collection and disposal costs are on a pace to be more than $4 billion over the next 20 years. One of the highest costing systems in the country and it is projected to lose $9 million this year alone.

  Questionable public/private sector deals, big dollar consultant contracts that are often poorly advertised with few bidders is typical in Spokane.

  The local newspaper has been a community embarrassment for years.

  This article only touches on a cesspool that has needed draining for years. A good journalist or two could make a career covering irregularities that have long been the norm in this city.