The Alliance for Economic Development

[Mr. Blue Sky]

I know these are murky waters and uncharted territory with the pandemic, but some basic questions must be asked about OKC's disbursal of CARES Act funds to Oklahoma City businesses.

First, to get this out of the way, yes, The Museum of the Bible/Hobby Lobby receiving the maximum allotment of funding from the city CARES funds prompted my own research into how the city made disbursal decisions.

Not surprisingly, the shadowy non-governmental agency , The Alliance for Economic Development of Oklahoma City, has been involved in the disbursal of these funds. How? Why? What exactly is the extent of their involvement? Who are they accountable to? If they are accountable to the City Council, how? What is recourse for citizens who question the allocation of these funds? Why is a private group, outside city governance, involved in how these funds are distributed?

According to The State of Oklahoma, The Alliance is a non-governmental domestic non-profit organization:




Many of us have known and followed The Alliance and Cathy O'Connor for years. We've all known how murky the waters get when they assume duties related to city government and economic development that, many of us believe, they actually do not have. The backroom dealings in city after city using these tactics, without the restraints and transparency required if it was the government itself, have not been tested at the level of SCOTUS, at least that I am aware of. In the end, I believe we could discover that these private groups have used power, vested to the states and municipalities, in ways that violate our constitution by making a mockery of sunshine and transparency laws across the country, including here in our own fair city.

Which brings me to the KFOR story about how The Museum of the Bible received part of the very limited funds intended for small business under the CARES Act. There are several quotes reported in the KFOR story from Cathy O'Connor, President and CEO of The Alliance, that stood out to me and I am curious about...

"We try to treat everybody fairly and in the same manner,” said Cathy O’Connor, the president of the alliance."

"The way the program is structured is we looked at basic financial information,” O’Connor said. “Most of the ones that did not get funded were because we exhausted the funding that the council allocated, and the second round was handled on a first come first serve basis."

“The office and the employees and their headquarters was documented as being in Oklahoma City, that’s how they were eligible to participate in our program,” O’Connor said.

“Which left around $1.6 million that was eligible for reimbursement through the CARES Act funding that the city received,” O’Connor said.

The emphasis used above is mine, of course, to show what I believe to be a certain arrogance and entitlement that Ms. O'Connor seems to assume for her private, non-governmental, non-profit organization. The quotes, at least, show The Alliance for Economic Development of Oklahoma City is not your everyday non-profit.

Yes, Ms. O'Connor, that last quote I listed from the story you got right -- that the CITY received.

Remember, this non-profit organization has no official ties to the City of Oklahoma City. Cathy O'Connor was elected by nobody. Yet, as shown above, she is armed with an incredible amount of power, implied and subjective as it is, though undeniably with clear approval from the city and certain powers that be.




This isn't about politics. I couldn't even tell you the party affiliation of the people involved. No, this is public policy in civic affairs about accountability, implied official governance by a private, non-profit organization, and why Oklahoma City has thrown its lot in with those cities who have chosen to outsource their responsibilities to an outside independent group without any official capacity. I have my feelings about why this is done, and I'm sure many of you would agree with my thoughts, while others will defend using private non-profits (with powerful directors) to act as middle-man when it comes to making crucial decisions about our city. As often as President/CEO O'Connor uses the word, "we," when discussing the public work of our city, we should remember that the "we" that matters is you and me, as in, "We The People."

[BoulderSooner]

the shadowy non-governmental agency

good to see you don't have preconceived notions

[shawnw]

I see this relationship as very similar as the city's relationship with many other non-profits that act on behalf of the city, and suspect it actually saves the city some money to operate this way (at times). Examples include the Myriad Gardens and Scissortail Park foundations, the boathouse foundation (obvs no money saving here at this time), OKC Beautiful (maintains some medians on the city's behalf), Neighborhood Alliance (interfaces with neighborhood associations on city's behalf), heck even Mesta Park Neighborhood Assoc (operates the park on behalf of the city), I'm sure there are others. In each of these cases I'd bet there's a contract or guiding document/policy or council ruling somewhere. Can't say I know where these are, but probably if you ask someone (maybe your councilor) they can tell you or find out.

Don't get me wrong, I absolutely want more transparency into certain things being done, but I don't think the mere fact that we have a non-profit doing work on behalf of the city is in itself purely nefarious.

[TheTravellers]

C'mon Pete, you have to give us your input on this.

[AP]

I see this relationship as very similar as the city's relationship with many other non-profits that act on behalf of the city, and suspect it actually saves the city some money to operate this way (at times). Examples include the Myriad Gardens and Scissortail Park foundations, the boathouse foundation (obvs no money saving here at this time), OKC Beautiful (maintains some medians on the city's behalf), Neighborhood Alliance (interfaces with neighborhood associations on city's behalf), heck even Mesta Park Neighborhood Assoc (operates the park on behalf of the city), I'm sure there are others. In each of these cases I'd bet there's a contract or guiding document/policy or council ruling somewhere. Can't say I know where these are, but probably if you ask someone (maybe your councilor) they can tell you or find out.

Don't get me wrong, I absolutely want more transparency into certain things being done, but I don't think the mere fact that we have a non-profit doing work on behalf of the city is in itself purely nefarious.

It'd be interesting to see how many of those non-profits have a board that looks like this:

J. Larry Nichols - Founding Chairman
Clayton I. Bennett
Craig Freeman
David Greenwell
Debby Hampton
Rhonda Hooper
Michael Brooks-Jimenez
Ronald J. Norick​
James Tolbert
Christopher Turner
Tony Tyler
Roy Williams

[Plutonic Panda]

https://kfor.com/news/local/museum-o...r-application/

[Mr. Blue Sky]

https://kfor.com/news/local/museum-o...r-application/

Hey Panda, I linked to that in the OP. That's what my post is based on. But it doesn't hurt to have it here again -- thanks!

[Mr. Blue Sky]

C'mon Pete, you have to give us your input on this.

I hope?

[TheTravellers]

I hope?

I'm guessing Pete would've answered by now, so he's probably not going to. You should do a search (probably through google using site:okctalk.com since the site's search function is somewhat lacking) and you'll get some historical posts back, I'm pretty sure.

[Midtowner]

OKC Alliance is just a rebirth of the old Oklahoma Industry Authority which was shut down by the AG's office. It is nothing more than a billionaires' club designed to funnel public money to themselves without being subject to open meetings and open records laws.

[Pete]

As many know, I've followed the Alliance since the idea was first discussed.

The creation of a separate non-profit that would dispense billions in tax money was controversial from the start and was the brainchild of Larry Nichols, who is still the board chair.

The FOR arguments centered around the need for secrecy when pitching incentives for economic development. Anything directly involving city employees is public record, as are their meetings. Nichols thought economic development could be improved by consolidating all types of incentives-based programs under a group that was free from public scrutiny. Their dealings only become open 1 year after they are finished dealing.

The AGAINST crowd pointed out that we are talking about hundreds of millions and even billions of tax dollars. And even though city council ultimately had to approve, that they had never once turned down such a request therefore it was effectively not an oversight mechanism.


Beyond all that, you have the Alliance performing tasks that were not envisioned. One notable example is that Cathy O'Connor and her group performed a completely secret evaluation of the Boathouse Foundation at the behest of Jim Couch. Ultimately, those findings were shared and voted on by public bodies but the entire process was hidden from view and when I asked for all the background materials (special projects commissioned by the city are not exempt from open records per their charter) I was stalled for a couple of months then given a high-level Powerpoint presentation by an outside consulting firm that was dated just before I received it, even though the findings had been offered by O'Connor when seeking approval from formal city bodies (specifically asking for millions to prop them up). When I asked how conducting such a project even remotely fit into the Alliance's charter, I was told that it was because the Boathouse District was a big economic development driver, an excuse that could be used to conceal any city activity, which seemed to be the motivation here. And I had the strong feeling this whole thing started with desired answers and then they scrambled to come up with an independent study after they had already presented the findings.

I also asked if there had been prior incidences where open records were used and then an economic development deal died because of it. No one was able to provide an example which led me to ask, "What is the problem we are trying to solve?"

The bottom line is the Alliance can be used for all types of purposes completely outside the public eye. And the argument is quickly raised that money can only be dispensed on final approval of the council, to which my reply is always "They only know what they are being told by people with all the information and a huge motivation to present it in a way that will get a favorable vote." And also the fact they have never rejected anything that has been put to them for formal vote by the Alliance.

[Mr. Blue Sky]

Excellent reply, Pete. You pointed out something I should have included in my OP and that’s the old, “Well, the council has to approve...” excuse. In the context of this situation (CARES act), what approval can the city give that isn’t based on information given to them from The Alliance? For example, the second round “first come, first served” funding. Determined by...??? This is a perfect example of how there can be abuse without transparency. Thanks Pete for bringing additional thoughts to this with your own work, for years, on watching the work of The Alliance.

@Midtowner - You are right about the old OIA scandals. Whenever there is something that brings my focus to The Alliance, I think about those days. Jan Eric Cartwright was nothing short of the ultimate people’s advocate. One of my first political heroes.

[Pete]

^

I do not believe council had to approve how the CARES act money was distributed.

[shawnw]

I will say this, many non-profit boards have terms. It would be nice to see this board have that so it could be shaken up every now and then.

[Pete]

A couple other things about the secrecy in which the Alliance operates...

They control all the TIF money, as in hundreds of millions. There is no record kept or shared that reports who come to them, who formally applies, etc. All we see (or the council sees) is the final, full application that has been blessed and packaged by the Alliance.

I've been told by several developers it all starts with a meeting with Cathy O'Connor and if she says 'no' that's the end of things. They can only go forward with the blessing of the Alliance and their support and ultimately their pitch to city council. And as a reminder, the main pitch is usually made in secret 'small group' meetings and then the public council vote is just a formality, which is why there is always approval.

That is a ton of power to wield outside the public eye. A good example of this, ironically, is the Wheeler District. They were told 'nope' many times over for years. Blair Humphreys basically pulled an end-around, first courting individual council members then ultimately bringing the matter directly to them, which was passed.

The Alliance also decides when, where and how TIF districts are established. They had no interest when Uptown merchants were trying to create a parking structure. Yet, when it came to funds for other pet downtown projects, they moved heaven and earth, shifting money from one district to another and coming up with all types of creative financing.


Another thing that really rubbed me the wrong way concerned the Omni Hotel subsidies. This was all done completely in the dark but due to the timing, I knew the final package had to be revealed in a specific OCURA agenda.

They always wait until the very limit of the 48 hours required by open meetings law and so 2 days before, I was refreshing my browser waiting for the details to be posted.

When it finally came, I immediately downloaded the proposal, quickly read through it and placed a call to Cathy O'Connor because the nature of the deal required the city to borrow the money needed and there was a big finance cost that was not included.

All of this happened in about 15 minutes and then I saw the Oklahoman post a full story with all the details including interviews with Cathy and others and I knew the proposal had been leaked to them days before it was made public. Their story was basically a PR release with pretty renderings and only mentioning the $85 million (which was a ton) the city would have to provide. No real mention of the required financing cost.

So by the the time Cathy called me back, I was hot. I told her what she had done was highly unethical. When asked if she would provide the same access to advanced information to me or other journalists, she said "I don't know." I lost my temper and told her that was a ridiculous answer and repeated that what she had done was wrong.

I also asked directly about the substantial financing cost. She said they weren't sure and would not give me a direct answer. I knew that the city finance dept would have to handle this also knew there is no way they wouldn't have already run the numbers, so I gave them a call and they quickly told me the cost would be very close to $53 million.

$53 million!! And it was because the Omni wanted all the city money upfront. Yet, whenever this is reported by the Oklahoman, they always use the $85 million number as public subsidy when it is really costing the taxpayers a total of $138 million, plus another $40 million for an Omni-required parking garage.

The Alliance had already given the Oklahoman $1.5 million for their new downtown offices, which are now about half vacant.


I fully understand the Alliance is trying to do what they think is right in order to better the city, but I say if you want to use your own money, great. But when you use tax money you have to be accountable and open and that's where this group's work becomes controversial.

[Pete]

As a disclaimer, my business did receive a good chunk of money from CARES act and for that I am very grateful.

[Midtowner]

Excellent reply, Pete. You pointed out something I should have included in my OP and that’s the old, “Well, the council has to approve...” excuse. In the context of this situation (CARES act), what approval can the city give that isn’t based on information given to them from The Alliance? For example, the second round “first come, first served” funding. Determined by...??? This is a perfect example of how there can be abuse without transparency. Thanks Pete for bringing additional thoughts to this with your own work, for years, on watching the work of The Alliance.

@Midtowner - You are right about the old OIA scandals. Whenever there is something that brings my focus to The Alliance, I think about those days. Jan Eric Cartwright was nothing short of the ultimate people’s advocate. One of my first political heroes.

I happen to know Cartwright's First Assistant very well. I think the Alliance looks to be the OIA with a different name. It's an amalgamation of OKC old money families who are taking public money and getting goodies for themselves.

Cartwright's second term was going to be focused on criminally prosecuting the members of the OIA. Of course the Oklahoman ran near daily front page editorials about how awful Cartwright was and he got primaried by Mike Turpen who made it all go away.

[Mr. Blue Sky]

Pete again nails it and does so with integrity. It would have been easy to simply not weigh in on this due to receiving CARES money for his business. He proves he truly is a people’s advocate in the public square and we are lucky to have him in Oklahoma City. (Don’t go California Dreamin’ on us, Pete!)

[Mr. Blue Sky]

I happen to know Cartwright's First Assistant very well. I think the Alliance looks to be the OIA with a different name. It's an amalgamation of OKC old money families who are taking public money and getting goodies for themselves.

Cartwright's second term was going to be focused on criminally prosecuting the members of the OIA. Of course the Oklahoman ran near daily front page editorials about how awful Cartwright was and he got primaried by Mike Turpen who made it all go away.

The suits he had already brought were harbingers of things to come. I have NO doubt, whatsoever, that the OIA saw Jan Eric as standing in their way of their private big-money-exchange club and was the fist that came down and provided the $$$ and the massive assault on him in that primary. Nobody had ever seen anything like it. The Daily Oklahoman and their front page editorials were downright hateful and full of lies. Jan Eric Cartwright would have been a great Governor In a few more years. Too bad that big money and then, cancer, took him down at the age of only 47.

I tried to PM you Mid, but your box is full.

[Midtowner]

I just fixed my PMs.

But yes. I think Jan was really the last Oklahoma politician who operated independently of what the billionaire's club wanted, and whether the Dems or GOP have been in power, it has always been the money that's really run things since. But as Podie Poe used to say, the big bank roll always swallows the small bank roll.

[TheSteveHunt]

OKC Alliance is just a rebirth of the old Oklahoma Industry Authority which was shut down by the AG's office. It is nothing more than a billionaires' club designed to funnel public money to themselves without being subject to open meetings and open records laws.

yup.

[shawnw]

Didn't the Industry Authority just get the green light to do a CARES program for the county? Did I misunderstand that?

[Pete]

The Oklahoman reported this morning that Cathy O'Connor is resigning as the head of the Alliance, a position she's held since the organization was created: https://www.oklahoman.com/story/news...ce/9123256002/


This is very strange. O'Connor was making $294,000 a year with a staff of only 10 or so. For comparison, as city manager of OKC and overseeing almost 5,000 employees, Craig Freeman makes $257,000.

I'm sure this is much more to this story and will see what I can find out.

[fortpatches]

I think I found the IRS docs, but it is a different name (Oklahoma City Economic Development Foundation, EIN:73-1123147). It has a lot of the same board members, but more recent docs aren't available yet.
https://apps.irs.gov/app/eos/details...=COPYOFRETURNS

Since bylaws are required for filing for 501(c)3, you should be able to get a copy of them with IRS Form 4506-A, I think?

I don't think they can block their minutes either though.... The Oklahoma Open Meetings Act. The Oklahoma Open Meeting Act (25 O.S. Sections 301–314) is an Oklahoma state law that requires that all meetings of public bodies must be open to the public and that the public must be given advance public notice of such meetings. Together with the Oklahoma Open Records Act, the Act serves to encourage the public to participate in and understand the governmental processes and governmental problems throughout the State. Many nonprofits must follow the Open Meetings and Open Records Acts because of their contractual or other partnerships with local municipal, state and federal agencies that provide public dollars to their organization.

They get nearly all their funding from a governmental body.

[Pete]

^

The Alliance was established specifically so they could conduct negotiations outside the open meetings and records laws.

They are not registered as a public body, but rather as a private nonprofit organization.

This setup was created specifically to keep matters private and was the brainchild of the Alliance board chairman, Larry Nichols.