Mar 30, 2010

Alan Jennings Gives Taxpayer Bath


Alan Jennings may well be the most influential person in the Lehigh Valley; I don't think The Morning Call quotes anybody as often. Last week, in a panel discussion about newspapers, he acknowledged that he bends the arms of the powerful and that nobody wants to be on his wrong side. He is praised by democrats and republican, liberals and conservatives alike. If all that wasn't enough influence, the week before he received the national award from Jesse Jackson, for making capital available to the low income.

Shaking my head, I felt like Justice Alito reading that Jennings had lost only 40 thousand dollars helping over 70 startup businesses. He must mean money belonging to his organization, and not the taxpayers. This post is about a bath he gave the taxpayers, and how Abe Atiyeh came out of it smelling like a rose.

Jennings gets a thrill out taking people on welfare and making them instant business owners; I call it giving them a fish market instead of a fishing pole. In 1996 he set up Rose and Miguel Rodriquez in a paint recycling business called Angel's Touch Paints, in a rented space on N. Franklin Street.* In 1997 Lehigh County would pay them $7,000 to recycle it's paint leftovers, and then buy back rebatched paint at $5.00 a gallon. The operation only required the space of about a three car garage. Also, about this time, Abe Atiyeh purchased the sprawling, contaminated Allentown Paint Manufacturing Plant on East Allen Street. Long and behold the influence; The DEP spent $755,000 cleaning up the old paint factory and gave Angel Touch $165,000 more, for equipment and lease expense to relocate there, in a space 100 times larger than they needed. **

Angel Touch and the Rodriquez's are long gone. Abe has a clean building and the existing multiple tenants never even heard of Angel Touch. Actually, the building is so large that they could still be there, lost somewhere inside, like the $920,000 of our money.

*Dan Hartzell, The Morning Call,April 28, 1997:pg. B.04

**Dave Levinthal, The Morning Call, June 4, 1999: pg. B.12

19 comments:

Anonymous said...

The loan pool referred to in that article does not involve taxpayer money it is funded through private investment.

Final point to you - Alan doesn't "set up" any businesses. CACLV does not approach people and tell them to start a business or what kind of business to start or really anything close to that. People who are already planning to start a business go to CACLV to receive support and training. Some of those people go on to start businesses, some don't. Some of those businesses succeed, some don't. The people who receive loans from CACLV are already business owners, all have previously incorporated, many are already operating their businesses and need capital to grow. A 4% default rate is pretty impressive, considering that all of these borrowers are considered so "high risk" by banks that they are denied loans from traditional sources - many of whom have higher default rates than 4%. I can see your argument against many of the CACLV programs, but the business-side of CACLV's operations is a successful program and I'd 100% rather my tax money go to support something like this than go to bail out for-profit banks.

Anonymous said...

Bernie,
How did you get these financial figures regarding Angel Paints?
We remember when they were awarded their grant and the great positive press they and Jennings received.
What an investigative reporter really needs to check out is how many of these CACLV sponsored tax payer funded businesses are still in operation a year or two after initial start-up.

michael molovinsky said...

anon 7:41, i think you understand that i'm referring to the DEP money. Although cleaning up a paint manufacturing plant and placing a paint recycle operation in it sounds reasonable in the paper, it was really grapes and watermelons. allentown paint was a national manufacturer, while angel touch produced a few hundred gallons of paint. do you believe rose and miguel had the where for all to put that together? not even atiyeh did. i can not establish hyperlinks to articles that old. search the morning call archives for angel's touch paints, read the articles. ironically, in 2004 DEP again reports contamination in that building...did it come from left over angel touch paint? I don't know.

Anonymous said...

Anonymous said...
The loan pool referred to in that article does not involve taxpayer money it is funded through private investment.


Please would you mind proving this statement? Having watched at least 2 local small businesses funded through CACLV open and close, we are most interested in your data.

Bernie O'Hare said...

Anon 8:20,

I do not know why you are mentioning me. I did not write this post or any of the comments before this one.

What I will note is that MM has used one failure to establish that Jennings is wasting your money, even though the money Jennings spends is private funding.

I did write a post some time ago about the many success stories spawned by Jennings' Rising Tide Community Loan Fund. So far, it has made 69 microloans totallin $1.2 million. According to a Jennings, the delinquencires are vbelow 10%, and some months, around 3 or 4%. Only 4 loans have ever been written off.

That's pretty good, but MM chooses to focus on one failure to bash Jennings.

http://lehighvalleyramblings.blogspot.com/2009/10/did-you-know-caclv-likes-small.html

Anonymous said...

The people who receive loans from CACLV are already business owners

Excuse us. This hardly seems true. Angel Paints wasn't incorporated before it became a business and we know of several other individuals who opened single-owner businesses and said they had no experience prior to enrolling in CACLV's business support programs.

Anonymous said...

If Post 7:41 can readily prove that no taxpayer funds go into any of CACLV's small business programs, that will be a positive
and will go a long way towards
posing a more favorable light on this issue.

Anonymous said...

Mr. Molovinsky,
Would it be possible to delete Bernie's name in our post of this morning? We had just visited his site prior to checking your morning comments and accidently directed our comment towards him only because he just wrote about Alan very recently. In no way did we mean to slight Bernie nor you and we apologize to you both. Thank you.

michael molovinsky said...

bernie, in my opinion your recent posts on jennings, to which i linked, demonstrate numbing self-righteousness. his braying about nobody wanting to have to defend themselves against him was chilling. his statements about bad guys and rich white suburbs was most hypocritical, especially for someone who claims that he doesn't use tax money and counts on those "rich white folk" for donations. meanwhile his various organizations are a grant seeking machine. who could possibly separate what funds go where. what about the influence he uses to bring tax funded grants to specific businesses as i have documented. you commented recently that you consider my blog good investigative reporting, even if i don't make such claims. actually for this post, I do. I knew of this angel touch deal ten years ago because i was approached to use their paint. Jennings boasts that no taxpayer money is used in his projects, here's $920,000 of our money on one deal.

michael molovinsky said...

anon 10:51, i understood what happened, and so did bernie, it's fairly common. it is not possible to alter a comment, it can be deleted, but not altered, unless the blogger cuts and pastes it up under his name.

Anonymous said...

"I did write a post some time ago about the many success stories spawned by Jennings' Rising Tide Community Loan Fund. So far, it has made 69 microloans totallin $1.2 million. According to a Jennings, the delinquencires are vbelow 10%, and some months, around 3 or 4%. Only 4 loans have ever been written off."

Are you sure about this?
Only 4 loans have ever been written off."

michael molovinsky said...

anon 11:01, i think the question is--will they let a business fail or do they keep helping keep it afloat? about 90 percent of small startup businesses fail in the real world. if jennings claims that 96 % of his succeed, that alone defies credibility.

Bernie O'Hare said...

I believe he said 4 of 69 loans were written off. That's a 94% success rate.

His records are open and you are free to peruse them, but you'd rather call him a liar. it suits your agenda.

michael molovinsky said...

bernie, i have no agenda, but you do. i didn't call him a liar, but you're glad to say i did. i do assert he misrepresents things, as many bureaucrats do. for small startup businesses to have a 94% success rate strongly suggests ongoing support.

as for your agenda, you are becoming a legend. look how you find one thing after another to bash jake towne about. look how you justify your direct and indirect support for dent, cunningham and stoffa and panto. how ethical was it for you to research the tea party woman until you found the IRS tax lien? you have, simply put, become a promotion or attack machine, depending on the person, not the facts.

Bernie O'Hare said...

MM,

If you accuse someone of misrepresenting things, you're calling him a liar. You called Jennings a liar even though he has offered to make his records available for anyone who wants to question his success. The person who is ignoring the facts, as usual, is you. You won't take Jennings up on his offer, just as you refuse to meet Panto. That might disturb your preconceived notions. You want me to refrain from criticizing the unelected leadership of the 100-person LV Tea party bevcause it involves a criticism of jake Towne.

I deal in facts. You deal in anecdotes and petty slights that just diminish you. In the 2009 election cycle, you relived the 2005 election cycle and how unfairly you were treated.

You're not able to get beyonf yourself.

michael molovinsky said...

bernie, i sincerely hope you come to realize that your intellectual honesty is worth more than an occasional complimentary phone call from the pols you defend. here in the jennings situation, i provided sources to document that angel touch paint project cost the taxpayers $920,000, despite jennings saying all money used is private donations. my post only concerned that project. as i mentioned before, i actually support dent for senator. but, i won't attack jake towne on every occasion as you do. i won't investigate people in the tea party as you did to support dent. of course the tea party has a spokesperson. the media cannot interview everybody. all groups tend to have a leader, most are not elected. you ignore the fact that town isn't even the tea parties candidate. you ignore the fact that the tea party isn't a political party. you ignore any fact that doesn't serve your agenda.

Anonymous said...

Hey guys, before you kill each other, FYI the CACLV Form 990 (their tax return) is available on their website. All the detail you want to see on their revenue/expenses is there.

http://portal.caclv.org/media/caclv-irs990-2008.pdf

michael molovinsky said...

anon 3:20, you should really send the tax return to bernie's site, he's into that sort of information. over there, in bernieville, he just told a commentator who complained about him investigating the tea party spokesman that the satisfied federal tax lien against her was public information. so not only did he dig up that lien, he printed the inference knowing that it was satisfied (paid) anyway.
but back to relevance. my point won't be found in a tax return. the post dealt with tax payer funded grants steered to his projects. also a tax return won't show how much aid it took to have a 94% success rate with start up businesses.

Anonymous said...

I don't see any claims that the businesses have a 94% success rate. Jennings states that only $40,000 (of 1.2M) has been written off. All that means is that borrowers have paid off their loans and not defaulted. A business could fail and the business owner could continue paying off their loan. I think the number is meant to demonstrate responsibility on the part of the borrowers more than a success rate among the businesses.

Also, I think there are some important to distinctions to be made between the business assistance/loans made by CACLV's lender "The Rising Tide" and the Business Starting classes that the Allentown and Bethlehem sub-offices offer. The conditions for getting a loan must be very different than for signing up for a class.

The loan pool is funded by private donations and investments. The money invested in the loan pool is then lent to businesses and generates interest income in repayment. This is where the figure of 40K written off comes from.