Business friendly vs. fraud friendly: Protecting the balance

By Max Maxfield, Wyoming Secretary of State

There has been much talk lately about business fraud in Wyoming. A recent article seemed to neglect the fact that Wyoming is the state that stepped up to take on business fraud in the first place.

It was Wyoming who acknowledged some misuses of businesses. It was Wyoming who had a white-collar crime team and wanted to help law enforcement agencies obtain information about who these lawbreakers were. It was Wyoming who worked to pass legislation to require companies to make information about their key players available to law enforcement. And it was Wyoming who said that is not enough; you must also have a “face of the company”, a human being, in Wyoming who can be contacted to obtain the required information. If you don’t do these things you can be sanctioned and if you intentionally file false information it’s a felony.

That new law which passed in 2009 through the work of the Wyoming Secretary of State’s Office and the Legislative Joint Corporations Committee, and supported by key individuals who knew about federal law enforcement, put the squeeze on thousands of “paper only” companies.

During the first year the law went into effect, over 4,000 companies were dissolved or revoked.

Were all of those unscrupulous? Probably not.

Some may have just let their company go because the new requirements made it not worth holding on to their company.

We have to be cautious because more government regulation can take out some potentially good businesses with the bad.

Far from being lax, Wyoming’s law is one of the first to address this issue. And, as an aside, might I say that Wyoming was such a leader in this move against business fraud that Wyoming was invited to present to the U.S. Department of Treasury and the U.S. Department of Justice; and then was invited to present at a training session for federal agents.

So why is Wyoming in the spotlight? I believe there are two reasons.

First of all, Wyoming is a great place for business. We have progressive business laws. Our taxes are very low. The fees to form a company are very low and the bureaucracy is less; it takes less time to form a company here than in many states.

The same good customer service that is incredibly attractive to good companies is also attractive to those who intend to use their company for bad. Crooks are not necessarily unintelligent; they know it is cheaper and quicker to form companies here. So Wyoming is attractive to riff raff as well as to good businesses. However, in America, the law must be equally applied to everyone. So if we make business law more costly, strict and cumbersome for crooks, that means more costly, strict and cumbersome for everyone.

When the laws were changed in 2009 there was great debate during the legislative process about the need to keep a balance between fighting fraud and not being too regulatory and oppressive to good businesses. That’s an immensely tough one.

There seems to be a misunderstanding about what is required of businesses in the United States and in Wyoming specifically. Each company is required to have a Registered Agent; someone who can be served with legal documents about a company. Registered Agents often work for many companies perhaps hundreds, just like a private accounting firm or a private attorney likely has hundreds of clients.

Many companies all using one Registered Agent is not at all strange in and of itself. There are reputable Registered Agent Service companies in the United States and in Wyoming that serve thousands of companies.

What makes the “little house on the prairie” odd is that immense research done by the reporting firm has turned up the “fact” that this particular Registered Agent seems to represent some companies that have incredibly unusual connections and problems.

There also seems to be misunderstanding about the type of physical business structure.

Is the fact that it was a single family house a violation? No, it is not any more unusual than a law firm which might buy an old house in a commercially zoned area and make law offices out of it.

All that being said, do we think all the happenings by the companies represented by the Registered Agent at the “little house on the prairie” are okay and am I defending them? Definitely not.

I’m furious that businesses are using Wyoming’s good name for bad. It’s the same anger and concern that prompted me to direct my office to assist in obtaining legislative changes in 2008 when the business fraud issue first came to my attention. I will work with the 2012 legislature to further strengthen Wyoming’s business laws. We want fraudulent businesses out of the Cowboy State.

I believe the second reason that Wyoming is coming under attack about its business laws has to do with timing. There is a move underway by some members of Congress, not the Wyoming delegation, to place more regulation on business. The Washington approach calls for a one size fits all, additional layer of bureaucracy.

Filing more papers is not the answer. People “hell-bent” on business fraud will file false information. Those who think bad guys will fess up by filing a piece of paper listing the truth, are not living in reality.

Wyoming has been outspoken about this proposed legislation. Heavy paperwork burdens are tough for small-family and mom-and-pop businesses of which there are many in Wyoming. Somebody has to speak up for legitimate Wyoming businesses.

There are some interests nationally who have not liked Wyoming speaking up.

Further, in this economy, is now the time for more, and costly, regulation? I think not.

Although, there are some bad actors in the business world, and indeed there are, the solution is not to hit good businesses with a regulatory sledge hammer.

Wyoming has many wonderful business men and women, and my job as Secretary of State is just as much to protect them as to make it hard for fraudulent companies.

It is a challenging regulatory balance. Besides, legitimate businesses will provide legitimate information but does anyone think crooks will provide accurate information?

Do I, or anyone else, have the perfect solution to stopping all business fraud? Are you kidding me? If I did, we would be applying that theory to all crime in America.

Can state government regulate to the point that businesses won’t ever be used for bad; or that every company will provide all the services they advertised; or that the quality of work every company does will be satisfactory? Of course not!

But we can tenaciously keep chipping away at serious business fraud. And the way we do so is to require businesses to have a person onsite to provide information about key players. That gives law enforcement something to go on.

Could we do other things to drive out fraudulent companies? Sure, the unpalatable choice is to make it not profitable by increasing business taxes and fees, but that approach hurts legitimate Wyoming businesses.

We are also trying to find ways to strengthen statutes even further without oppressing good businesses. Right now, we are letting law enforcement take these bad actors on one at a time, case by case.

Yes, it is tedious like all law enforcement work. This issue is greater than one “little house on the prairie”; this is an enormous issue for the whole United States to grapple with; fraud and money laundering in an ever dangerous world versus businesses operating well to provide a solid economic basis for our country. Wyoming is just one player in this very, very complex design.

I want Wyomingites to know that I remain firmly against federal intrusion. This is a state issue. This is a difficult matter but I’m committed to eliminating fraud while remaining business friendly to legitimate businesses. I will continue to work against fraud. We will seek additional law changes if viable.

After seeing the recent news media, I just thought Wyomingites would like to know, as it’s been said – “the rest of the story.”

‘Hot Coffee’: The truth about lawsuits

By Diana Rhodes
President of the Wyoming Trial Lawyers Association

Did you see Hot Coffee – did your friends? The documentary aired on HBO Monday. If you missed it, here’s a little social experiment. Ask a random family member, friend or colleague to name the most famous lawsuit in this country. You can bet that several, if not all of them, will respond with some version of the McDonald’s coffee lawsuit. Now go ask them to provide you with the details of that case. The answers you get will probably vary wildly, only sharing one thing in common: they are usually incorrect.

The HBO documentary sets the record straight about this infamous case and sheds some interesting light on a corporate campaign aimed at closing the courthouse doors to American consumers.

Hot Coffee is the story of 79-year-old Stella Liebeck who sustained severe burns when a cup of coffee spilled in her lap. Her injury led to a lawsuit against McDonald’s, which ultimately led to the infamous $2.7 million verdict everyone remembers. The details of the story, however, have been grossly exaggerated over the years to make Ms. Liebeck appear as someone who just wanted to get rich from her own mistake. Through interviews with Ms. Liebeck, her family, attorney and others, the truth comes to light, and we get to see Americans react to hearing the real story they thought they knew so much about.

The documentary touches on such common misunderstandings as Ms. Liebeck’s burn severity (third-degree burns on her legs and groin that required an eight-day hospital stay), her supposed irresponsibility in spilling the coffee (she wasn’t driving the vehicle when the cup collapsed in her lap), and her supposed desire to “get rich” from her injury (she originally asked McDonald’s to simply pay her medical expenses and lost wages – around $20,000 – which McDonald’s refused). The film also explains the jury verdict and why they awarded Ms. Liebeck what they did.

As trial attorneys, we applaud this film for finally putting to rest some of the more outrageous exaggerations associated with this case. Regularly, we find ourselves engaged with the public on the McDonald’s case because the details have so long been lost. The information in the documentary is followed by the more sinister message of the film – that the exaggerations were not simply a product of misinformed individuals, but instead were part of a calculated effort by corporate America to give the civil justice system a bad image, and consequently curb the money they had to pay in lawsuits.

Ms. Saladoff’s film examines the amount of money spent by the U.S. Chamber of Commerce and other corporate interests to form political front groups aimed at enacting so-called “tort reform” around the country. It also shows how political candidates from state lawmakers all the way up to presidential and judicial candidates are targeted based on how anti-civil justice or anti-lawsuit they are. The film does an excellent job of showing just how much money is spent to prevent individuals from holding the wealthy and powerful accountable. And trust us, the numbers are staggering.

Of course, the most interesting part of the film is watching people’s opinions change once they have seen and heard the truth about not only the McDonald’s case, but also about how much effort has been invested into closing the courthouse doors to everyday Americans. The civil justice system is the one true way in which everyday Americans can take on the large and powerful interests in this country on a level playing field. Unfortunately, the deck is being stacked against those who have been harmed through someone else’s actions. Their methods range from placing limits on what injured victims can recover to granting themselves complete immunity for their actions. Regardless of the manner by which they do it, the end result is that justice becomes harder and harder to come by. Our hope is that by shedding light on the truth about the McDonald’s case and the calculated effort being made to take our rights away, this film will begin to change attitudes.

Hot Coffee airs again on HBO July 2, 5, 10 and 12 and on HBO2 on July 25 and 28.

Building the Wyoming we want or keeping the Wyoming we have?

By Cheri Steinmetz

The very name, Building the Wyoming We Want, implies that we do not HAVE the Wyoming we want, and suggests we are unable to “build” it on our own.

I disagree.

We cherish our family, friends, freedom, and our independent rural way of life.

BW3 was started by Governor Freudenthal under the guise of “protecting” the things we hold dear.

Last time I checked, we were perfectly able to do that on our own.

It is the overreaching regulation and spending of government that threatens the American way of life.

Here in Goshen County BW3 is called the High Plains Initiative or HPI.

HPI/BW3 is a threat to freedom and an assault on our individual rights, especially regarding private property and the ability to choose how we use our land.

The document, which has already been created for Goshen and Platte Counties, invites SMART Growth, Sustainable Development and United Nations Agenda 21 into our county by creating a false statement of public support for these principles.

Sustainability invokes government power to enforce activists’ views of environmentalism. It seeks to replace farmers’, ranchers’ and other landowners’ concept of stewardship with government-centric control. It merges environmentalism and socialism by government control of land use, food production, housing, transportation, manufacturing, energy rationing and even health care.

As a member of the HPI Steering Committee, I witnessed firsthand that this is a marketing ploy called the Delphi technique, designed to manipulate the public and bring them to a predetermined “consensus.” It is not a “grass roots” process; rather it has been driven from the top down using the local HPI steering committee as a formality and our good reputations as a front to give credibility to an illegitimate non-profit organization and their undemocratic process.

This is a cookie cutter model that is being used by SMART Growth catalysts, such as Envision Utah, nationwide.

This is not our plan, it never has been!

If you are in agreement, contact your elected officials and “Just say NO” to BW3’s hidden agenda.

Tell them we want BW3 STOPPED, defunded and removed from our Counties and State without a trace left to haunt us.

BW3 asked, so let’s tell them We are Keeping the Wyoming We Have!

To learn about SMART Growth, Sustainable Development, UN Agenda 21 see: www.epa.gov/smartgrowth/, www.un.org/esa/dsd/agenda21/, www.freedom21.org , www.democratsagainstagenda21.com.

For Wyoming information see www.wyomingwatchdogs.com.

Cheri Steinmetz is a resident of Goshen County.

Libertarian Party: 40 years is enough – end the Drug War

Editor’s note: June 17, 2011, is the 40th anniversary of America’s War on Drugs, and the Libertarian Party leader issued a point of view on drug prohibition that differs from those of either major party.

By Libertarian Party Chair Mark Hinkle

On June 17, 1971, President Richard Nixon declared a ‘War on Drugs,’ which has become a relentless violation of the lives and property of Americans, including many who have never taken illegal drugs. These violations continue under President Barack Obama, an admitted former cocaine user who has shown no hesitation in throwing people into prison — a punishment he might have suffered had he been caught. Moreover, although promising to respect medical marijuana use in states where voters have approved it, the Obama administration has already conducted close to 100 raids on patients, growers, and compassion centers in those states.

America’s first experiment in prohibition involved alcohol, and is widely recognized as a failure. Approved in 1919, Prohibition I led to a steady rise in both alcohol usage and violent crime. The murder rate rose 50% between 1919 and 1933, peaking at 9.7 murders per 100,000 population in 1933, when the country finally decided enough was enough. Immediately after the repeal of Prohibition I, gangsterism went into a swift decline, with all of the major gangs disappearing within 18 months, and the murder rate dropping every single year for more than a decade.

Prohibition II – the War on Drugs – has been another tragedy. We applaud the efforts of Law Enforcement Against Prohibition (LEAP), an organization of current and former police, prosecutors, judges, DEA agents, and others, which issued a 20-page report this month detailing the tragic results of this misguided crusade, entitled ‘Ending the Drug War: a Dream Deferred.’

In their report, LEAP documented some of the measurable costs: over a million people arrested each year, a trillion dollars spent, and drug gangsterism at a level that dwarfs its alcohol equivalent and which has led to a bloodbath in Mexico that is spilling over into the United States. Not because of drugs, but because of drug laws. And over 120 million Americans have used illicit drugs: only the most deluded observer believes the laws have curbed drug abuse, and only the cruelest believes that 40% of the American population belongs in prison. No wonder 67% of police chiefs say the War on Drugs is a failure.

Ultimately, of course, this tragedy is the result of our government’s refusal to allow people to engage in peaceful choices as to what they consume. Even if drug use were to rise upon a return to the American tradition of tolerance that existed before the 1914 Harrison Narcotics Act, our streets would be safer, innocent people would not have their homes raided and pets killed by narcotics agents entering the wrong house, victims of asset forfeiture laws wouldn’t have their houses and other assets seized without due process, and resources would be freed to spend on improving peoples’ lives instead of destroying them.

Ten years ago, Portugal decriminalized all drug use, including substances classified as hard drugs. As a Cato Report entitled ‘Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Policies’ showed, drug use dropped over the next several years and the Portuguese now use marijuana at lower levels than Americans use cocaine.

It only took Americans 14 years to realize the insanity of Prohibition I. Both practical considerations and simple human decency demand that our government end Prohibition II now.”

The Libertarian Party platform includes the following:

1.0 Personal Liberty

Individuals should be free to make choices for themselves and to accept responsibility for the consequences of the choices they make. No individual, group, or government may initiate force against any other individual, group, or government. Our support of an individual’s right to make choices in life does not mean that we necessarily approve or disapprove of those choices.

1.2 Personal Privacy

Libertarians support the rights recognized by the Fourth Amendment to be secure in our persons, homes, and property. Protection from unreasonable search and seizure should include records held by third parties, such as email, medical, and library records. Only actions that infringe on the rights of others can properly be termed crimes. We favor the repeal of all laws creating “crimes” without victims, such as the use of drugs for medicinal or recreational purposes.

Correctional officers keeping Wyoming safe

By Robert O. “Bob” Lampert
Director, Wyoming Department of Corrections

May 2-6 will be observed in Wyoming as Correctional Professionals’ Week.

Corrections employees have provided for the safety of Wyoming families and individuals for 136 years under various agency names and, for the past 20 years, as the Wyoming Department of Corrections.

A system that began with the receipt of the first inmate in 1875 now has 2,138 inmates under its authority, including the 111 inmates currently housed in adult community corrections centers in Wyoming.   In addition to the inmates being managed within our institutions, there are an additional 5,622 offenders under varying forms of supervision by the corrections professionals assigned to work within your communities and mine.  In (insert name of county) alone there are (insert number) offenders on some form of probation or parole.

As this agency has evolved, so have its staff and the expectations of them.  Employees, once considered in the aggregate as “guards”, now do much more than guard prisoners and, as such, are truly deserving of recognition as corrections professionals.  Corrections staff, both full-time state employees and others who are delivering corrections-related services, are, today, well-trained, highly skilled corrections professionals.  They are effectively managing offenders and community risk, while giving each offender access to the opportunities necessary to become effective, law-abiding citizens upon their transition back into our communities.

These unsung heroes dedicate their lives to serving crime victims and to ensuring the safety of our communities through the incarceration and supervision process.  They do so by role-modeling socially acceptable behavior to the offenders they supervise, by reinforcing the positive pro-social behaviors displayed by those offenders seeking change, and by redirecting inappropriate behavior in continuously holding each offender accountable for his/her own actions as they occur.

Incarceration, or community supervision, is the punishment imposed on offenders for the wrongs they have committed against victims, families, friends, and our communities. “Corrections” is the process that occurs as a result of the supervision, professional concern, and unselfish commitment of our state’s corrections professionals.  I am happy to report that in Wyoming “correction” happens, more often than not, as a result of incarceration and community supervision, as was evidenced by a recent report showing that Wyoming had the second lowest rate of return to prison within three years of release in the nation.  That is largely due to the efforts and influences of our corrections professionals in providing offenders with opportunities to become law-abiding citizens during both incarceration and community supervision.

The challenges faced by correctional staff members are tremendous, yet these dedicated professionals continue to make a difference in the lives of others. They make a difference not by punishing, but rather through accountability, mentoring, interventions, rewards and sanctions, treatment, partnerships with other agencies and community groups, and by assisting offenders in their efforts towards leading a law-abiding lifestyle.  All of this is done in an effort to ensure the highest level of public safety.

Today’s correctional employees are highly trained professionals who constantly acquire knowledge of what motivates offenders and apply that knowledge in the most effective way possible. The work they do has become multifaceted – their work goes beyond supervision and surveillance of offenders – and is therefore deserving of the designation as a respected profession.

During their week of special recognition on May 2-6 and throughout the year, we should honor and respect the work these professionals do for us each and every day of the year.

Governor and attorney general promote drug take back

by Gov. Matt Mead and Attorney General Greg Phillips

This Saturday citizens in Wyoming have an opportunity to remove a serious hazard from their homes. April 30th is National Prescription Drug Take Back Day – a day that offers people the chance to turn in unused, expired or unwanted prescription drugs.

We hope everyone will use this designated day to go through medicine cabinets, dresser drawers, purses, pockets – wherever prescription drugs are kept, find these unneeded drugs, and get them out of harm’s way. Think of it as a really vital part of spring housecleaning.

These prescription drugs represent a new and growing threat to safety in Wyoming. The Partnership for a Drug Free America says that every day 2,500 teenagers get high for the first time by using prescription drugs.

In this state the Prevention Needs Assessment of 2010 found that 6 percent of sophomores and seniors said they had used prescription drugs to get high in the month preceding the assessment. The Drug Enforcement Administration reports that the source of most of these pharmaceuticals is prescriptions of family members or friends.

At a time when nationally the trend has been for teens to move away from using other drugs, these prescription drugs are now becoming the new gateway to other dangerous behaviors. Beyond that, though, they can literally be a dead end.

In 2007, 2008 and 2009 prescription drug overdoses exceeded the number of fatalities on Wyoming’s highways. Nationally, figures from 2007 show that 27,000 people died because of prescription drug overdoses.

In this state and across the country, we increasingly see a pattern of teens having “pharm” parties, where they take various pills. Parents can help by recognizing this new trend and talking to their children about the dangers that prescription drugs pose. But, all of us can keep our communities safer by keeping a close eye on prescription drugs and even over-the-counter items, like cold and cough medicines.

This Saturday is a time to take action. There will be at least 25 sites across the state set up to accept unwanted prescription drugs and anyone can find out how to take back their prescriptions by calling the local police department.

This Saturday will be the second National Prescription Drug Take Back Day. Last year, in Wyoming, law enforcement agencies collected almost 700 pounds of drugs. The DEA reports that nationally the public turned in over 121 tons of pills in 2010. We can make 2011 an even more successful year if everyone participates.

Taking drugs back on April 30th also provides a safe way to dispose of prescription drugs because flushing them down the drain is not safe and not good for our water supply.

Another way to safely dispose of medications is through the Department of Health’s Medication Donation Program.

This is an ongoing effort, which allows people to give some prescription drugs to those who cannot afford them. This is possible if pills are unopened and if they have not expired. Call the Office of Pharmacy Services at 1-855-257-5041 for more information on this donation program.

Please join us in making our communities safer and participate in the Prescription Drug Take Back effort or the Medication Donation Program.

UW students, parents should be aware of changes to grants

By Tammy Aagard
Registrar, University of Wyoming

At the University of Wyoming, we know it’s the time of year when students, prospective students and their parents are making plans for college.

We want to let you know about a couple of significant changes that may affect your college plans, particularly if they include seeking financial aid through the Pell grant program to attend classes this summer and in upcoming semesters. Pell grants are provided through a federal program that provides need-based grants to low-income undergraduate students to promote access to college education.

Budget proposals being considered by the U.S. Congress and the Obama administration include eliminating the year-round Pell grant, reducing the 2011-12 Pell grant awards perhaps by up to 15 percent and potentially eliminating both the Student Education Opportunity Grant and subsidies on graduate school loans, no matter where you attend college. We will know for certain only after the federal budget has been approved. Because awards for 2011-12 are subject to change – they could decrease by several hundred dollars per year – depending on the final federal budget approved we want to give as much advance notice so that alternate aid sources can be found.

Awards for this summer have been delayed because of the possible elimination of the year-round Pell grants. Students who were planning to use the year-round Pell grant to pay for summer sessions at UW or other higher education institutions may have to investigate other options.

Program changes could also affect students who are eligible for grants for the 2011-2012 academic year. Awards from UW Student Financial Aid are based on the availability of funds. When we know the outcome of the Pell grant program appropriations, we’ll make adjustments to awards if necessary. UW continues to use all the financial aid resources available to help students cover the cost of attending UW.

If you have questions about what potential changes to the Pell grant program mean for you, please don’t hesitate to contact the UW Student Financial Office. We will keep you updated as more information becomes available.

Turning 50, colonoscopy not so bad considering alternative

By Diana Enzi

Turning 50. Getting a colonoscopy. Neither are things people look forward to. To make matters worse, they are linked together: Age 50 is when most people should schedule their first colonoscopy.

Not your idea of a happy birthday? You’re not alone. But if you consider the facts, you may decide that a colonoscopy is one of the best gifts you can give yourself – and it is a gift to your family as well.

Found in both men and women, colon cancer is one of the leading causes of cancer related deaths in the United States. In 2010, an estimated 102,900 new cases of colorectal cancer were expected; 51,370 were expected to die from the disease. In Wyoming last year, an estimated 110 deaths were linked to the disease. But those statistics don’t reflect how treatable the disease is. When diagnosed early, colorectal cancer can be effectively treated and can often lead to a complete recovery.

March is National Colorectal Cancer Awareness Month and a great opportunity to learn the screening guidelines, share them with your friends and family, and follow them by setting up a screening appointment. Most men and women at age 50 and older should be screened, and with certain types of screening, colon cancer can be prevented by removing polyps (grape-like growths on the wall of the intestine) before they become cancerous.

People with risk factors should talk to their health professional about getting screened at an earlier age. Risk factors include a personal or family history of colorectal cancer, polyps or inflammatory bowel disease. African-Americans are at higher risk. Other risk factors include a low-fiber/high fat diet, sedentary life style, obesity, diabetes, smoking or heavy alcohol use. Just as lifestyle choices can increase risk, research has shown that a healthy lifestyle can also be crucial in lowering risk of this disease. Maintain a healthy weight through a good diet. Exercise regularly. If you don’t smoke, don’t start, and if you do smoke, stop. If you use alcohol, do so in moderation.

Colon cancer is a terrible disease, but we have made great progress in beating it since the first National Colorectal Cancer Awareness Month 11 years ago. According to the American Cancer Society, incidents have declined in individuals age 50 and older each year in the period of 1998-2006 by 3 percent a year in men and 2.2 percent per year in women; the death rate has dropped by approximately 2.8 percent a year in men and by 2.6 percent a year in women in the same time period. This decline in incidents has largely been attributed to increases in colorectal cancer screening.

While these declines are a step in the right direction, there is still work to be done. Only about half of those who should be screened are doing it.

So spread the word – turning 50 isn’t so bad, and neither is having a colonoscopy. Especially when you consider the alternatives. If you are over 50 and have yet to be screened, don’t waste time regretting it. Make that appointment now. And keep it.

For more information about colorectal cancer prevention and early detection, visit the Prevent Cancer Foundation’s Web site at www.preventcancer.org. The Prevent Cancer Foundation is celebrating its 25th anniversary this year.

Diana Enzi is a member of the Congressional Families Cancer Prevention program of the Prevent Cancer Foundation, and the wife of Senator Mike Enzi, R-Wyo. March is Colorectal Cancer Awareness Month

Another charter school in Laramie? A concerned perspective

By Kari Cline, executive director, Wyoming Association of Public Charter Schools

The 2011 Legislative Session is in full swing and themes of accountability and student achievement are driving forces behind many of the conversations.

As we look to how our state spends money on education and what the end results that are coming out of that investment are, I think it is important remind ourselves why public charter schools have a place in the dialog and how they can help address the issues.

Charter schools are unique public schools that foster a partnership between parents, teachers and students. They create environments in which parents can be more involved, teachers are given freedom to innovate and students are provided the structure they need to learn.

This freedom to innovate comes with high levels of accountability and a public charter school can be closed if it is not meeting its performance outcomes. A high-quality public charter school operating within a traditional school district helps improve the education system and provides parents another public school option.

There is an opportunity for the community of Laramie to embrace another public school option for the parents and children there.

Superintendent Brian Recht addressed the parents, staff, and community on the Albany County School District 1 website in response to this opportunity for the community of Laramie.  He says, “State funding for the whole school district is dependent on the number of students in the district-minus the number of students at a charter school.”

Public charter school students ARE students of ACSD1 and therefore ARE counted in the funding model for ACSD1. In other words, those students are not subtracted out of the district generated funds. Those students ARE indeed generating the same state funding for the district per pupil funding AS WELL AS district level resources for the entire system.

He goes on to say the district will have to adjust by way of reducing staff, services, programs, and materials.  To say that when approximately $600,000.00 (roughly 1 percent) of the ACDS1 annual $47,657,631.00 money it receives from the state FOLLOWS the student WHO GENERATED THAT MONEY that the district will be forced to cut resources for other students seems a bit like a scare tactic. Remember, these students are still ACSD1 students whose parents have funded that education through tax dollars. That money is not going anywhere outside the district.

Later on in his statements, Superintendent Recht highlights some other anticipated impacts to his district. He says, “We believe in choice and options for parents and children, but in a district our size, this choice must come in multiple forms that fit within our current system, structures, and capacity.”

So parents of ACSD1 take note. You parents who want another quality public school option for your children – you do not deserve that option.  If your kids don’t fit the mold of what the traditional system is doing are you forced to sit by and do nothing but support that system?

I have not seen or heard anyone from the proposed Laramie Montessori Charter School saying that ACSD1 is a terrible school district doing a terrible job and that their goal is to steal away students and resources. What they are saying, and have every right to do so, is that for their children and the children in Laramie they want to provide an innovative, proven way of education that will meet the needs of those children who CHOOSE to attend.

Let us not forget who knows the student the best. It should be a parent’s decision where they want their child educated- at home, in a private school, a traditional public school, or a public charter school. And let us not forget that the process by which the state law outlines the opening of a charter school is rigorous. I urge you to ask any of the Laramie Montessori Charter School founders who have spent almost 3 years working on this how thoughtful and intentional they have been in putting the kids and their education first.

Perhaps I should be thanking Superintendent Recht for clearly articulating and adding merit to the direction the Wyoming charter law needs to move in the future.

We need to have applications and approval for public charter schools done in a statewide, qualified authorizing body that will look at the quality of the application based on how it will serve the needs of children attending it.

The state generously funds our public schools and ALL children in the state deserve access to those funds through either traditional public schools or through public charter schools.

No district should be allowed to let fear or misleading information intimidate the parents and community members who are seeking to open another high-quality public school to serve the needs of children in their community.

The focus should not be serving the needs of a “system” but in serving the needs of our children by expanding quality public school options that allow them to thrive in the educational environment that increases their success and gives them the tools they need to be a 21st century learner.

For more information on the Wyoming Association of Public Charter Schools see www.wyomingcharters.org. Kari Cline’s e-mail address is kari@wyomingcharters.org.

Anticompetitive practices accepted in livestock markets

by Max Thornsberry, president R-CALF United Stockgrowers of America

First, a little background…Until now, USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) made no effort to put forth regulations to implement provisions in 1921’s Packers and Stockyards Act (PSA) that prohibit packers from

engaging in unfair, unjustly discriminatory, or deceptive practices and granting undue preference or advantage. As a result, such anticompetitive practices are not only widespread in U.S. livestock markets, but those practices have also become institutionalized and are now viewed by many as normal business practices.

Many people erroneously believe the effects of these anticompetitive practices result from natural market forces.

What has happened to the U.S. hog industry, however, provides a blueprint for U.S. cattle producers to predict the future of their U.S. cattle industry if fundamental changes are not made. The hog industry’s experience shows that the 30-year exodus of 90 percent of U.S. hog producers was not the result of natural market forces. Instead, it resulted from a well-orchestrated plan carried out by dominant packers during a period when U.S. antitrust laws and the PSA were both unenforced and ignored.

Five-step plan to capture hog market

It is important to review the highly successful, five-step plan the packers used to capture control of the hog supply chain, which enabled the packers to control the entire hog/pork industry from birth-to-plate. This five-step plan is well underway in the U.S. cattle industry.

Step 1: Packers created an economic risk for feeders called “market access risk.” Market access risk is the risk that feeders will not have timely access to a market outlet when their livestock are ready for slaughter. Packers created market access risk through consolidations that put control over market outlets into the hands of only a few. In effect, packers have become gatekeepers, deciding who does and who does not have timely access to the market.

Step 2: Packers offered to solve the market access risk problem by guaranteeing timely market access in return for producers’ willingness to sign marketing contracts that promise delivery of livestock at some future point in time.

This would appear to be a win-win situation – producers secure timely market access and packers are better able to schedule their procurement needs. But, this is the beginning and end of the mutually beneficial aspect of the plan.

Step 3: When livestock volumes shift from the cash market to the contract market, packers continue using the cash market to discover the base price for all contracts. Thus, price discovery for the entire industry continues to take place in the market where market access risk abounds. As the price discovery market becomes thinner, less competitive, and more susceptible to manipulation, the packers’ pricing strategy lowers the aggregate price for all livestock, including the price for cattle involved in branded programs and other alternative marketing programs.

Step 4: Packers exploit the ever-thinning cash market, which they can do because they are so few in number, simply by shunning the cash market for extended periods of time, say a week or longer, which is sufficient to lower livestock prices. The effect of market access risk and the attendant pricing strategy is an eventual lowering of the price of all livestock below the feeders’ cost of production, resulting in the mass exodus of livestock producers.

Step 5: Packers lead the few remaining feeders to believe the cash market is an outdated, antiquated market and they actually convince feeders to berate the cash market in favor of alternative contracting methods. This effectively distracts attention from the packers’ anticompetitive pricing strategies and it encourage producers to seek a new so-called solution to the new problem associated with the mass exodus of feeders: Packers begin offering livestock producers not just a marketing contract, but a full-fledged production contract where the packer, and not the livestock producer, determines the terms of production and terms of marketing; and, because competition is severely reduced, the packer gains even more control over the pricing of all livestock.

This simple, five-step plan is not conjecture. This is the highly effective strategy packers used to reduce the number of hog producers from 667,000 in 1980 to fewer than 65,000 today. The cattle industry is now in the fourth-step of this five-step process. In just the past four years, the volume of cattle sold in the cash market was reduced 20 percent. Today, fewer than 40 percent of the cattle set the base price for all the cattle sold to packers, including the 60 percent sold under alternative marketing agreements. The warning sirens could not be sounding any louder!

Part II: How GIPSA’s competition rule disrupts packers’ plan to control the cattle supply chain

The cattle industry is caught in a classic, catch-22 situation. It would be disastrous to limit cattle producers’ access to alternative marketing arrangements while packers continue to control timely access to the market. This is why the GIPSA Competition Rule “does not restrict limit or prohibit marketing agreements, the use of premiums, or other value-added activities.” (See USDA letter at: http://archive.gipsa.usda.gov/psp/avalosstatements.pdf.)

It is, however, clearly obvious to critical thinkers why the packers and industry trade associations that have packers seated on their governing boards are doing everything in their power to mislead cattle producers into believing GIPSA’s competition rule will limit or prohibit such marketing methods.

Disrupting the strategy

The GIPSA rule disrupts the packers’ strategy by prohibiting them from exercising their power to limit producers’ access to the marketplace. It accomplishes this by:

1)      requiring packers to justify the offering of different prices and different terms (including the timing of market access) to feeders who sell similar quality cattle and market similar volumes of cattle;

2)      requiring packers to maintain documentation regarding the reasons premiums and/or discounts are granted to some feeders but not to others;

3)      requiring packers to provide justification for giving certain feeders price and/or market access preference or advantages while denying such treatment to others;

4)      requiring packers to submit sample contracts so feeders will know the specifications and pricing variations offered by the remaining packers; and,

5)      clarifying that packers cannot avoid the PSA’s prohibitions against engaging in anticompetitive practices by claiming their actions only harmed an individual producer and not the competitiveness of the entire industry. It accomplishes this by clarifying that a producer need not prove harm to the entire industry (harm to competition) in order to stop a packer from engaging in an anticompetitive practice that is targeted at him or her.

GIPSA’s rule also puts an end to practices known to reduce competition. It prohibits a packer that needs additional cattle to fill weekly supply needs from purchasing such residual cattle from a competing packer, which would enable the packer to avoid making bids in the competitive cash market. It accomplishes this by prohibiting packer-to-packer cattle sales. It also preserves competition by requiring that each packer use its own buyer to purchase cattle. This provision addresses the problem discovered in U.S. auction yards where three cow/bull packers joined together to hire a single cow/bull buyer. Though this was great for the three packers – their shared buyer was able to purchase all the cows and bulls the packers needed for the price the packers wanted to pay – it harmed cow/bull sellers because where once there were three bidders for their cattle, suddenly there was only one.

Therefore, GIPSA’s competition rule is indeed necessary to prevent packers from exploiting their dominant market positions that already enable them to create market access risk for cattle feeders, entice cattle feeders to abandon the competitive cash market to avoid market access risk, and establish pricing strategies that effectively lower the aggregate price for all cattle.

Four factors known to kill competition

The rule accomplishes this by addressing four factors that are known to reduce, if not eliminate, competition:

1)      It addresses the lack of packer accountability by clarifying that packers are prohibited from engaging in unfair, unjustly discriminatory, and deceptive practices against cattle feeders even if such practices are directed at a single cattle feeder;

2)      It addresses the lack of documentation needed to evaluate disparities in prices and terms offered for cattle of similar quality;

3)      It addresses the lack of transparency in the marketplace by requiring packers to submit sample contracts for cattle feeders to review; and,

4)      It prohibits known practices that, by their nature, are anticompetitive: packer-to-packer sales and multiple packers colluding to use a single cattle buyer.

In short, the GIPSA Competition Rule is the first comprehensive effort in nearly 90 years to both protect and preserve an open, fair, and transparent competitive marketplace for independent U.S. cattle producers.

Come to Fort Collins

We urge everyone who is concerned about the future of Rural America to be at the upcoming USDA/DoJ competition workshop at 8 a.m. MDT on Friday, Aug. 27, in the Main Ballroom of the Lory Student Center, located at 1101 Centre Avenue Mall on the campus of Colorado State University in Fort Collins, Colo.

Voice your opinion

Additionally, R-CALF USA does understand that some folks in the country just can’t make the trip, no matter how much they want to be there. If that’s the case with you and you would still like your voice to be heard, please visit this Web site, which will still be up after the Aug. 27 workshop: https://org2.democracyinaction.org/o/5924/p/salsa/event/common/public/?event_KEY=23746.

Max Thornsberry, D.V.M., is R-CALF USA’s President of the Board of Directors and Region VI Director. Dr. Thornsberry and his wife Brenda reside in Richland, Mo. Thornsberry is the owner and manager of TNT Cattle Co., a certified feeder calf preconditioning enterprise, as well as Avanco Feeds, a veterinary and nutrition firm that serves beef, dairy, swine and companion animal owners in central Missouri.

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