Mormons Frown on Cigs and Gambling - But They Made Romney Rich

A little more background:

PrisonPolicy.org has a good recap of the history (PDF):

CCA sought a way to extract even more investment capital from the stock market to pay for its ambitious expansion plans. The solution it hit on was the real estate investment trust. REITs are publicly-traded entities that own and manage real estate but do not pay corporate income taxes. However, these tax avoidance entities must distribute 95 percent of their operating income as dividends to shareholders. These characteristics are intended to boost the price of REIT shares and thereby help raise even more capital.

In July 1997, CCA Prison Realty Trust, a REIT registered in Maryland, made an initial public offering of 21.3 million shares, priced at $21, raising more than $400 million. Most of the proceeds of the offering were used to purchase nine facilities from CCA, which leased them back and continued operating them under government contracts. This process improved the look of CCA’s finances but amounted to the kind of off-balance-sheet transactions that would later become notorious in connection with the fall of Enron. Back in 1998 an investment banker told the financial magazine Investment Dealers’ Digest that REITs such as Prison Realty were “an off-balance-sheet financing vehicle if you want to pursue more acquisitions.” The fact that Prison Realty owned only properties connected to CCA made it a captive REIT.

The use of off-balance-sheet financing was also at the center of numerous deals in which construction of CCA’s prisons was financed through the issuance of tax-exempt lease-revenue bonds (or certificates of participation). These financing vehicles involve the creation of a non-profit entity that issues the bonds and acts as the titular owner of the facility. The bonds are backed by lease payments made by the correctional agency, which also pays CCA an operating fee. More than a dozen CCA facilities were built using this arrangement, which amounts to a form of taxpayer-subsidized low-cost financing for what is essentially a private facility. This financing is only one of the ways in which CCA (and other private prison operators) have received state and local economic development subsidies. It has also received tax abatements (in Youngstown, Ohio, for example), infrastructure assistance and other incentives.

[Side note: This is a perfect example of "You didn't build that."]
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http://crooksandliars.com/karoli/mitt-romneys-undisclosed-relationship-priva
 
Thanks for the bump, yurt! Here's more from the article:
Brookside Capital Partners Fund, LP and CCA Realty Investors

On August 26, 1998, BCPF acquired 5.21 percent of CCA Realty Investors, or 1,125,000 shares in anticipation of a reverse merger with CCA and a one-for-one stock exchange of Realty shares for CCA shares. Presumably the investment was made as part of the restructuring, but also in anticipation of big profits to come, since business was going fairly well for the private prison industry at the time.

By December 31, 1998, BCPF owned 7.13 percent of CCA Realty Investors, or 1,565,800 shares.

The stock was de-listed on January 8, 1999 after closing at $22.31 per share, which translates to just under $35 million value held in BCPF.

Unfortunately, the SEC system does not require reports when securities are sold, but we do know from BCPF's Statement of Holdings on June 30, 1999 that they no longer held shares of CCA Realty Investors or any successors, which means it's reasonable to conclude that sometime in the first half of 1999 Brookside sold those shares.

Here's what we do know, however. In April and May, 1999 the stock price was on the rise, peaking on May 10th at $73.79 per share. (See historical prices here) On May 17th and 18th, over 3.6 million shares were traded, far heavier volume than on any day preceding. If Brookside's shares were sold during this period, Mitt Romney stood to make profit of anywhere from $51.48 per share on the high side to $22.30 per share on the low side, when compared to the value of the CCA REIT on the day it was de-listed.

That's a lot of money no matter whether the high or the low. 1,565,000 shares sold at the lower price would still mean post-merger profit of $35 million dollars, or 100 percent profit. At the higher price, it would have been more like $80 million.
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http://crooksandliars.com/karoli/mitt-romneys-undisclosed-relationship-priva
 
Rana said:
I typed in Romney campaign debunks gambling ties and came up with 0 articles. I think he wants this information to just go way. I not think the LDS church will care much becuse of how much money he donates to them!
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So, if a President invests in a mutual fund, he is 'connected' or has 'ties' to every single investment that mutual fund makes? The ignorance of the left on this board on investments is astounding.
 
Superfreak said:
So, if a President invests in a mutual fund, he is 'connected' or has 'ties' to every single investment that mutual fund makes? The ignorance of the left on this board on investments is astounding.
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Sez the board investments 'expert' who insists Bain was only trying to 'help' struggling businesses.

:rofl2:
 
Bijou said:
Sez the board investments 'expert' who insists Bain was only trying to 'help' struggling businesses.

:rofl2:
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are you saying SF is wrong? because what he said is what i was talking about when i said this stuff has been debunked. now...are you going to prove SF wrong?
 
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