MAKING SEN$E - "Faking Normal"

"55, unemployed and faking normal: One woman's story of barely scraping by" PBS NewsHour 1/19/2017

Excerpt

SUMMARY:  Elizabeth White has been on the edge of the financial cliff for years, but you'd never know it from outside appearances.  "Everybody is pretending," she says.  In her self-published book Fifty-Five, Unemployed, and Faking Normal she painfully chronicles the crash of a flourishing career and upper-middle class lifestyle -- and she's not alone.  Economics correspondent Paul Solman reports.

ELIZABETH WHITE, Author, “Fifty-Five, Unemployed and Faking Normal”:  Everybody is pretending.

PAUL SOLMAN (NewsHour):  And that's why you call the book Faking Normal?

ELIZABETH WHITE:  Right, because there's a lot of pressure to seem like you are doing well.

PAUL SOLMAN:  Elizabeth White is not doing terribly well, as she painfully chronicles in the book she's just self-published, Fifty-Five Unemployed and Faking Normal.

White's been on the edge of the financial cliff for years, even though you would never know it from how she looks or the Washington, D.C. townhouse she bought years ago, one she couldn't even dream of renting today.

But you haven't been in a situation where you literally couldn't afford whatever it is, the condo fee, or?

ELIZABETH WHITE:  Oh, absolutely, I have.  I right now have to park outside because I'm in arrears on the condo fee, right now.

PAUL SOLMAN:  And she's refinanced to the hilt, taken in a boarder.

Well, you haven't used food stamps.

ELIZABETH WHITE:  But I have.  I have had to.

PAUL SOLMAN:  It's been quite a comeuppance for someone with her background.

ELIZABETH WHITE:  I have a bachelor's from Oberlin.  I have a master's in international studies from Johns Hopkins.  I have a Harvard MBA, worked at the World Bank, came in through a program where they recruited 5,000 people.  They took two Americans out of that 25.  I was one of the Americans.

PAUL SOLMAN:  But, ultimately, White decided to leave the bank to start her own business.

ELIZABETH WHITE:  I had a chain of stores, of decorative home stores.

PAUL SOLMAN:  Really?

ELIZABETH WHITE:  Yes.

I sold some of the things you see here, African-inspired products.  I realized that there was an African-American market that wanted things in their home that reflected heritage and culture.  If you wanted to give your little girl a black Raggedy Ann doll, you couldn't easily find it.

So I just curated that from all over.  So, I then bet the ranch that I could get this going.  So, I took a lot of my — not all of it, but I took a big chunk of my World Bank money to sort of fund this.

NEW YORK - Alarm, Hidden Finances of Charter Schools

"NY State Official Raises Alarm on Charter Schools — And Gets Ignored" by Marian Wang, ProPublica 12/16/2014

A top official in the New York State Comptroller’s Office has urged regulators to require more transparency on charter-school finances. The response has been, well, nonexistent.

Add another voice to those warning about the lack of financial oversight for charter schools.  One of New York state's top fiscal monitors told ProPublica that audits by his office have found "practices that are questionable at best, illegal at worst" at some charter schools.

Pete Grannis, New York State's First Deputy Comptroller, contacted ProPublica after reading our story last week about how some charter schools have turned over nearly all their public funds and significant control to private, often for-profit firms that handle their day-to-day operations.  The arrangements can limit the ability of auditors and charter-school regulators to follow how public money is spent – especially when the firms refuse to divulge financial details when asked.

Such setups are a real problem, Grannis said.  And the way he sees it, there's a very simple solution.  As a condition for agreeing to approve a new charter school or renew an existing one, charter regulators could require schools and their management companies to agree to provide any and all financial records related to the school.

"Clearly, the need for fiscal oversight of charter schools has intensified," he wrote in a letter to New York City Mayor Bill de Blasio last week.  "Put schools on notice that relevant financial records cannot be shielded from oversight bodies of state and local governmental entities."

It's a plea that Grannis has made before.  Last year, he sent a similar letter to the state's major charter-school regulators – New York City's Department of Education, the New York State Education Department, and the State University of New York.

He never heard back from any of them.  "No response whatsoever," Grannis said. Not even, he added, a "'Thank you for your letter, we'll look into it.'  That would have been the normal bureaucratic response."

We contacted all three of these agencies and the mayor's office for comment.  None of them got back to us.

The charter-school debate in New York, as elsewhere, is politically fraught.  De Blasio's cautious stance on charters has put him at odds with New York Gov. Andrew Cuomo, whose financial backers include some big-dollar charter-school supporters.  The state comptroller's office has faced repeated lawsuits from charter groups and operators challenging its authority to audit charter schools.

To Grannis, though, his efforts aren't about politics.  His office is "agnostic on charters," as he put it.  His office also audits the finances of traditional public-school districts, he pointed out.

"We're the fiscal monitors.  We watch over the use or misuse of public funds," Grannis said.  "This isn't meant to be anti-charter.  Our job is not to be pro or anti."

Grannis has not yet gotten a response from the mayor's office about the letter he sent last week.

As to the charter-school regulators who got his letter the year before?  He's still puzzled why they wouldn't be more interested in a possible fix, or why the charter regulators never bothered to respond.

"I honestly don't know," Grannis said.  He said he's going to send another round of letters to them.

HISTORY - Looking Back at Bernie Madoff's Ponzi Scheme

I can admire anyone who is good at what they do, even a crook.  He suckered even the big Wall Street types who should have known better.

By the way, he got away with this (for a time) because his scheme appealed to peoples' greed, wanting MORE big-bucks.

"Looking back at Bernie Madoff's fraud scheme five years on" (Part-1) PBS Newshour 12/11/2013

Excerpt

JUDY WOODRUFF (Newshour):  Now:  What's happened to the people who invested their life's savings with disgraced financier Bernie Madoff?

Today is the fifth anniversary of his arrest for fraudulently operating a multibillion-dollar Ponzi scheme.

Five years ago, the world's media followed disgraced Wall Street financier Bernie Madoff wherever he went in New York, from the courthouse to his Park Avenue apartment.  Madoff's fall from financial grace came hard and fast.

In 2009, he pleaded guilty to running an elaborate global Ponzi scheme, defrauding investors of $64 billion in paper wealth and $17 billion in actual cash.  The victims numbered in the thousands and many were left with nothing.

MICHAEL DE VITA, Bernie Madoff Investor:  This is a man who stole $65 billion.  Nobody else has ever come close to $65 billion in theft.  He has absolutely no remorse.  You take a look at the people who have committed suicide as a result of this.  Well, there's physical suicide, and there's emotional suicide.  None of us will ever be made whole, ever.

JUDY WOODRUFF:  About $9 billion has been recouped so far by Irving Picard, the court-appointed trustee charged with recovering the lost assets.  He's suing a number of defendants, including J.P. Morgan Chase, claiming they should have known about the fraud.

For decades, Madoff lived a lavish lifestyle and worked to deceive investors and the Securities and Exchange Commission, as heard in this 2005 phone call released later by investigators.

BERNIE MADOFF:  Obviously, first of all, this conversation never took place, OK?  Look, you never know what they're going to ask, because these guys, it's a fishing expedition.  That's what they do.

JUDY WOODRUFF:  Madoff has claimed he acted alone, but a separate fraud trial began this fall in New York for five former employees.  They include his secretary, investment operations director and computer programmers.

Madoff himself is serving a 150-year sentence at a medium-security prison in North Carolina, which he recently said was very laid-back and kind of like camp.

"How are Bernie Madoff's fraud victims coping five years later?" (Part-2) PBS Newshour 12/11/2013

Excerpt

SUMMARY:  Recovering the losses from Bernie Madoff's enormous Ponzi scheme has been slow over the past five years.  For more on the where Madoff's fraud victims are today, Judy Woodruff talks to Diana Henriques of The New York Times, who says his victims are still "living a nightmare."

BANKING - JPMorgan's Record Settlement

The much bigger outcome is JPMorgan having to admit wrong doing, which is not the common practice in settlements.

"Will JPMorgan's record settlement set incentive for better bank behavior?" PBS Newshour 11/19/2013

Excerpt

GWEN IFILL (Newshour):  J.P. Morgan's $13 billion settlement brings months of delicate, high-stakes negotiations to an end.

Under the terms of the deal, $4 billion will go to struggling homeowners in the form of reduced mortgage payments, lower loan rates and other assistance; $7 billion will go to investors as compensation.  The remainder will be fines paid by the bank.

The agreement comes as investigators are said to be pursuing cases against other financial institutions as well.

Some assessment now of the deal's significance and its problems.

Lynn Stout is a professor of business law at Cornell University.  She closely watches financial regulation.  And Bert Ely is a banking consultant.  He joins me here.

CALIFORNIA - Using Eminent Domain to Solve Underwater Mortgage Crises

"Calif. City Contemplates Using Eminent Domain to Solve Its Foreclosure Crisis" PBS Newshour 9/19/2013

Excerpt

SUMMARY:  Half of all homeowners in Richmond, Calif., owe more on their property than what it is worth, prompting the city to consider using the power of eminent domain to seize underwater mortgages and help residents stay in their houses.  But detractors say that move will hurt the city by alienating Wall Street.  Hari Sreenivasan reports.

HARI SREENIVASAN (Newshour):  Jazz musician Morris LeGrande spends a lot of time jamming in the small recording studio in the back of his Richmond, California, home.  He and his wife Luajuana, both 57, were first-time homeowners when they bought their place in 2004 for $310,000.

Several years later, when the property was appraised at nearly half-a-million dollars, they refinanced and used the money to do some home repairs.

LUAJUANA LEGRANDE, homeowner:  This was on sale, actually.

HARI SREENIVASAN:  But the LeGrandes' dream of paying off their home one day was shattered in 2007, when the housing bubble burst, and like so many families across America, they found themselves underwater on their mortgage, owing more than their home was worth, much more.
----
HARI SREENIVASAN:  Steven Gluckstern is the chairman of the San Francisco private investment firm Mortgage Resolution Partners, MRP.  He is the one who proposed the eminent domain plan to Richmond leaders, and he's now working closely with the city to implement it.

And here's an important point to understand:  Gluckstern and the city didn't just randomly pick 624 mortgages to buy.  They went after homes with a very specific, complicated loan, known as private label securitized mortgages.  Now, these are mortgages which have been sold from the original lending institution, bundled together with other loans in trusts, and then sold to private investors.   They are traded daily, so hundreds, possibly thousands of individuals have a financial stake in them.

Gluckstern says, unlike a traditional loan directly between a bank and a borrower, the complicated structure of PLS mortgages makes it very difficult for Richmond homeowners and homeowners around the country to know who they can actually negotiate with to reduce their loan.

PLS mortgages.... hmm.... sound familiar?  Like bundled Sub-Prime Loans that were a major cause of the 2008 crash ring a bell.  Remember, financial complexity is there to hide something.

FINANCE - Loan Predators Protecting Their Hunting Grounds

"The Payday Playbook:  How High Cost Lenders Fight to Stay Legal" by Paul Kiel, ProPublica 8/2/2013

[U.S.] calculation

As the Rev. Susan McCann stood outside a public library in Springfield, Mo., last year, she did her best to persuade passers-by to sign an initiative to ban high-cost payday loans.  But it was difficult to keep her composure, she remembers.  A man was shouting in her face.

He and several others had been paid to try to prevent people from signing.  "Every time I tried to speak to somebody," she recalls, "they would scream, ‘Liar! Liar! Liar! Don’t listen to her!’"

Such confrontations, repeated across the state, exposed something that rarely comes into view so vividly, the high-cost lending industry’s ferocious effort to stay legal and stay in business.

Outrage over payday loans, which trap millions of Americans in debt and are the best-known type of high-cost loans, has led to dozens of state laws aimed at stamping out abuses.  But the industry has proved extremely resilient.  In at least 39 states, lenders offering payday or other loans still charge annual rates of 100 percent or more.  Sometimes, rates exceed 1,000 percent.

Last year, activists in Missouri launched a ballot initiative to cap the rate for loans at 36 percent.  The story of the ensuing fight illuminates the industry’s tactics, which included lobbying state legislators and contributing lavishly to their campaigns; a vigorous and, opponents charge, underhanded campaign to derail the ballot initiative; and a sophisticated and well-funded outreach effort designed to convince African-Americans to support high-cost lending.

Industry representatives say they are compelled to oppose initiatives like the one in Missouri.  Such efforts, they say, would deny consumers what may be their best or even only option for a loan.

Quick Cash and Kwik Kash

Missouri is fertile soil for high-cost lenders.  Together, payday, installment and auto-title lenders have more than 1,400 locations in the state — about one store for every 4,100 Missourians.  The average two-week payday loan, which is secured by the borrower’s next paycheck, carries an annual percentage rate of 455 percent in Missouri.  That’s more than 100 percentage points higher than the national average, according to a recent survey by the Consumer Financial Protection Bureau.  The annual percentage rate, or APR, accounts for both interest and fees.

The issue caught the attention of Democrat Mary Still, who won a seat in the state House of Representatives in 2008 and immediately sponsored a bill to limit high-cost loans.  She had reason for optimism:  The new governor, Jay Nixon, a Democrat, supported reform.

The problem was the legislature.  During the 2010 election cycle alone, payday lenders contributed $371,000 to lawmakers and political committees, according to a report by the nonpartisan and nonprofit Public Campaign, which focuses on campaign reform.  The lenders hired high-profile lobbyists, and Still became accustomed to their visits.  But they hardly needed to worry about the House Financial Institutions Committee, through which a reform bill would need to pass.  One of the lawmakers leading the committee, Don Wells, owned a payday loan store, Kwik Kash.  He could not be reached for comment.

Eventually, after two years of frustration, Still and others were ready to try another route. "Absolutely, it was going to have to take a vote of the people," she said.  "The legislature had been bought and paid for."

A coalition of faith groups, community organizations and labor unions decided to put forward the ballot initiative to cap rates at 36 percent.  The main hurdle was collecting the required total of a little more than 95,000 signatures.  If the initiative’s supporters could do that, they felt confident the lending initiative would pass.

But even before the signature drive began, the lending industry girded for battle.

In the summer of 2011, a new organization, Missourians for Equal Credit Opportunity (MECO), appeared.  Although it was devoted to defeating the payday measure, the group kept its backers secret.  The sole donor was another organization, Missourians for Responsible Government, headed by a conservative consultant, Patrick Tuohey.  Because Missourians for Responsible Government is organized under the 501(c)(4) section of the tax code, it does not have to report its donors.  Tuohey did not respond to requests for comment.

Still, there are strong clues about the source of the $2.8 million Missourians for Responsible Government delivered to MECO over the course of the battle.

Payday lender QC Holdings declared in a 2012 filing that it had spent "substantial amounts" to defeat the Missouri initiative.  QC, which mostly does business as Quik Cash (not to be confused with Kwik Kash), has 101 outlets in Missouri.  In 2012, one-third of the company’s profits came from the state, twice as much as from California, its second-most profitable state.  If the initiative got to voters, the company was afraid of the outcome:  "ballot initiatives are more susceptible to emotion" than lawmakers’ deliberations, it said in an annual filing.  And if the initiative passed, it would be catastrophic, likely forcing the company to default on its loans and halt dividend payments on its common stock, the company declared.

In late 2012, QC and other major payday lenders, including Cash America and Check into Cash, contributed $88,000 to a group called Freedom PAC.  MECO and Freedom PAC shared the same treasurer and received funds from the same 501(c)(4).  Freedom PAC spent $79,000 on ads against Still in her 2012 losing bid for a state senate seat, state records show.

MECO’s first major step was to back three lawsuits against the ballot initiative.  If any one of the suits were successful, the initiative would be kept off the ballot regardless of how many citizens had signed petitions in support.

Threatening letters and decoy initiatives

Meanwhile, supporters of the ballot initiative focused on amassing volunteers to gather signatures.  The push started with umbrella organizations such as Metropolitan Congregations United of St. Louis, which ultimately drafted more than 50 congregations to the effort, said the Rev. David Gerth, the group’s executive director.  In the Kansas City area, more than 80 churches and organizations joined up, according to the local nonprofit Communities Creating Opportunity.

Predominantly African-American congregations in Kansas City and St. Louis made up a major part of the coalition, but the issue crossed racial lines and extended into suburbs and small towns.  Within one mile of Grace Episcopal Church in Liberty, a mostly white suburb of Kansas City, there are eight high-cost lenders.  "We think it’s a significant problem and that it was important for people of faith to respond to this issue," said McCann, who leads the church.

Volunteers collected signatures at Catholic fish fries during Lent and a community-wide Holy Week celebration.  They went door to door and stood on street corners.

In early January 2012, a number of clergy opened their mail to find a "Legal Notice" from a Texas law firm and sent on MECO’s behalf.  "It has come to our attention that you, your church, or members of your church may be gathering signatures or otherwise promising to take directions from the proponents’ political operatives, who tell churchgoers that their political plan is a ‘Covenant for Faith and Families,’" said the letter.

"Please be advised that strict statutes carrying criminal penalties apply to the collection of signatures for an initiative petition," it said in bold type.  Another sentence warned that churches could lose their tax-exempt status by venturing into politics.  The letter concluded by saying MECO would be watching for violations and would "promptly report" any.

Soon after the Rev. Wallace Hartsfield of Metropolitan Missionary Baptist Church in Kansas City received the letter, a lawyer called.  Had he received the letter?  Hartsfield remembers being asked.  He responded, "If you feel like we’re doing something illegal, you need to try to sue, all right?" he recalls.  Ultimately, no suits or other actions appear to have been filed against any faith groups involved in the initiative fight.

MECO did not respond to requests for comment.  The law firm behind the letter, Anthony & Middlebrook of Grapevine, Texas, referred comment to the lawyer who had handled the matter, who has left the firm.  He did not respond to requests for comment.

Payday lenders and their allies took other steps as well.  A Republican lobbyist submitted what appears to have been a decoy initiative to the Missouri Secretary of State that, to the casual reader, closely resembled the original measure to cap loans at 36 percent.  It proposed to cap loans at 14 percent, but stated that the limit would be void if the borrower signed a contract to pay a higher rate — in other words, it wouldn’t change anything.  A second initiative submitted by the same lobbyist, Jewell Patek, would have made any measure to cap loan interest rates unlawful. Patek declined to comment.

MECO spent at least $800,000 pushing the rival initiatives with its own crew of signature gatherers, according to the group’s state filings.  It was an effective tactic, said Gerth, of the St. Louis congregations group.  People became confused about which was the "real" petition or assumed they had signed the 36 percent cap petition when they had not, he and others who worked on the effort said.

MECO’s efforts sowed confusion in other ways.  In April 2012, a local court sided with MECO in one of its lawsuits against the initiative, throwing the ballot proposition into serious jeopardy for several months until the state Supreme Court overturned the lower court’s ruling.  During those months, according to video shot by the rate cap’s supporters, MECO’s employees out on the streets warned voters who were considering signing the petition that it had been deemed "illegal."

MECO also took to the airways.  "Here they come again," intones the narrator during a television ad that ran in Springfield, "Washington, DC special interests invading our neighborhoods."  Dark figures in suits and sunglasses can be seen descending from a plane.  "An army of outsiders approaching us at our stores and in our streets," says the voice.  "But together we can stop them:  If someone asks you to sign a voter petition, just decline to sign."

Although the ad discloses that it was paid for by MECO, it does not mention payday lending or capping interest rates.

Installment lenders join the fray

Installment lenders launched a separate group, Stand Up Missouri, to fight the rate-cap initiative — and to differentiate themselves from payday lenders.

As the group’s website put it, "special interest groups masquerading as grass-roots, faith-based alliances" were not only targeting payday loans but also "safe" forms of credit such as installment loans.  "Stand Up Missouri does not represent payday lending or payday interests," the group said in its press releases.

Unlike payday loans, which are typically due in full after two weeks, installment loans are paid down over time.  And while many payday lenders also offer such loans, they usually charge higher annual rates (from about 300 to 800 percent).  The highest annual rate charged by World Finance, among the largest installment lenders in the country and the biggest backer of Stand Up Missouri, is 204 percent, according to its last annual filing.

Still, like payday lenders, installment lenders such as World profit by keeping borrowers in a cycle of debt.  Installment and payday lenders are also similar in the customers they target.  In neighboring Illinois, 56 percent of payday borrowers and 72 percent of installment loan borrowers in 2012 had incomes of $30,000 or less, according to state data.

World was the subject of an investigation by ProPublica and Marketplace in May.  The company has 76 locations in Missouri: Of all high-cost lenders, only payday lenders QC and Advance America have more locations in the state.

Stand Up Missouri raised $443,000 from installment lenders and associated businesses to oppose the rate-cap ballot initiative, according to state filings.

To broadcast their message in Missouri, the installment lenders arranged a letter-writing campaign to local newspapers, placed ads, distributed video testimonials by satisfied customers, and held a rally at the capitol.  Like MECO, Stand Up Missouri also filed suit with their own team of lawyers to block the initiative.

Tom Hudgins, the chairman of Stand Up Missouri as well as the president and chief operating officer of installment lender Western Shamrock, declined to be interviewed but responded to questions with an emailed statement.  Stand Up Missouri acknowledges that "some financial sectors" may require reform, he wrote, but the initiative backers didn’t want to work with lenders.

"Due to their intense lack of interest in cooperatively developing market-based reforms, we have and will continue to meet with Missourians in all corners of the state to discuss the financial market and opportunities to reform the same."

"Put a good face on this"

In February 2012, the Rev. Starsky Wilson of St. Louis sat down at a table in the Four Seasons Hotel.  The floor-to-ceiling windows reveal vistas of the city’s famous arch and skyline.  Lined up in front of him were two lobbyists and Hudgins, he remembers.

The lenders had targeted a community that was both important to their profits and crucial to the petition drive, African-Americans.  Wilson, like the majority of his flock, is black.

So were the two lobbyists.  Kelvin Simmons had just a few weeks before been in charge of the state budget and was a veteran of Missouri politics.  His new employer was the international law firm Dentons, then called SNR Denton, and he was representing his first client, Stand Up Missouri.

Next to Simmons was Rodney Boyd, for the past decade the chief lobbyist for the city of St. Louis.  He, too, worked for SNR Denton.

The lobbyists and Hudgins urged Wilson to rethink his commitment to the rate-cap ballot initiative.

Wilson was not swayed, but he was only one target among many.  At the Four Seasons, Wilson says, he bumped into two other leaders of community organizations who had been summoned to hear Stand Up Missouri’s message.  He said he also knew of more than a dozen African-American clergy who met with the lobbyists.  Their message, that installment loans were a vital credit resource for middle-class African-Americans, was persuasive for some.  As a result, Wilson found himself mounting a counter-lobbying effort.  A spokesperson for Simmons and Boyd’s firm declined to comment.

In Kansas City, Rev. Hartsfield also received an invitation from the lobbyists — but that was not the only case, as Hartsfield puts it, of an African-American being "sent into the community to try to put a good face on this."

Willie Green spent eight seasons as a wide receiver in the NFL and won two Super Bowls with the Denver Broncos.  After he retired in 1999, he opened several payday loan stores of his own and went on to hold a series of positions serving as a spokesman for payday lending, especially to minority communities.

While African-Americans comprise 13 percent of the U.S. population, they account for 23 percent of payday loan borrowers, according to a Pew Charitable Trusts survey.  Green was "Senior Advisor of Minority Affairs" for the Community Financial Services Association, the payday lenders’ national trade group, then director of "community outreach" for Advance America, one of the largest payday lenders.  Finally, in 2012, he opened his own consultancy, The Partnership Alliance Co., which, according to his LinkedIn profile, focused on "community relations."  Over the past decade, he has popped up during legislative fights all over the country — North Carolina; Georgia; Washington, D.C.; Arkansas; Colorado.

It is unclear who hired Green in 2012 — he declined to comment, and MECO did not report paying him or his company.  But to Hartsfield, it was clear he was there to advocate on behalf of payday lending.

Green once penned an open letter to the Georgia’s legislative black caucus arguing that government regulation on payday loans was unneeded and paternalistic:  Opponents of payday lending "believe that people unlike them are just po’ chillin’ who must be parented by those who know better than they do what’s in their best interest," he wrote, according to the Chattanooga Times Free Press.

During their private meeting, Hartsfield said, Green made a similar argument but also discussed church issues unrelated to the ballot initiative.  The payday lending industry might be able to help with those, Hartsfield recalled Green saying.  The message the minister received from the offer, he said, was "we’ll help you with this over there if you stop this over here."

Green referred all questions to his new employer, the installment lender World Finance.  In a statement, World did not address specific questions but said the company was "pleased to have Mr. Green as a member of its team to enhance World’s outreach to the communities that it serves and to provide him the opportunity to continue his many years of being personally involved in and giving back to those communities."

Hartsfield did not take Green up on his offer, but the former athlete has served as a gateway to the industry’s generosity before.  In 2009 in Colorado, where payday loan reform was a hot topic (a bill ultimately passed in 2010), Green presented the Urban League of Metro Denver with a $10,000 check on behalf of Advance America.  Landri Taylor, president and chief executive of the organization, recalled that Green had approached him with the offer and that he was glad for the support.  He also said that lending was not a core issue for his organization and that, even if it were, the contribution couldn’t have bought its allegiance.

In Georgia in 2007, Green, then a registered lobbyist, gave a state lawmaker $80,000 a few weeks before the legislature voted on a bill to legalize payday lending.  The lawmaker, who subsequently pleaded guilty to unrelated federal charges of money laundering, was one of 11 Democrats to vote for the bill.

After the Atlanta Journal-Constitution broke news of the transfer, Green produced documents showing that it had been a loan for a real estate investment:  The lawmaker had promised to repay the loan plus $40,000, but had never done so, Green said.  The state ethics commission subsequently found Green had broken no state laws, because lobbyists are allowed to engage in private business transactions with lawmakers.

The case of the missing petitions

By the spring of 2012, supporters of the initiative were in high gear.  Volunteers, together with some paid employees, were collecting hundreds of signatures each day.  They were increasingly confident they would hit their mark.

In some areas, such as Springfield, the work resembled hand-to-hand combat.  Through intermediaries, such as ProActive Signature Solutions, the initiative’s opponents hired people to oppose it.

"It was a well-funded effort," said Oscar Houser of ProActive.  He declined to say which company had retained ProActive.  However, only MECO reported spending funds on what it said were signature gatherers.  Those employees, according to Houser, eventually focused solely on trying to prevent people from signing the initiative.

Marla Marantz, a Springfield resident and retired schoolteacher, was hired to gather signatures for the 36 percent cap initiative.  Just about every day, she could expect to be joined by at least one, and often several, of ProActive’s employees, she says.  Wherever she went — the public library, the DMV — they would soon follow.  It was a tactic both she and her adversaries (with whom she became very familiar, if not friendly) called "blocking."

"What we’re doing is preventing them from being able to get signatures," one ProActive employee says on a video shot by a Missouri State University journalism student.  Asked to describe how "blocking" works, the employee says, "Usually, we get a larger group than they have.  We pretty much use the power of numbers."  In the video, as Marantz stands outside a public building, she is surrounded by three ProActive employees.

ProActive’s employees did not identify themselves to voters as affiliated with payday lending, Marantz says.  They sometimes wore T-shirts reading "Volunteer Petition Official" or held signs urging citizens to "Stand up for Equal Opportunity."

Marantz shared various photos and videos of her experiences.  In one video, a library employee tells a group of ProActive employees they will be asked to leave if they continue to make patrons uncomfortable.  At other times, Marantz says, exasperated public employees or the police simply asked anyone collecting signatures to leave the area.

McCann also gathered signatures for the initiative and experienced "blocking."  "I had on my clerical collar, and they seemed to address a lot of their vitriol at me," she remembers.

In May 2012, Missourians for Responsible Lending, the organization formed by supporters of the initiative, filed suit in county court in Springfield, alleging that MECO, through ProActive, was illegally harassing and assaulting its signature gatherers.  The suit included sworn declarations by Marantz and three others who had said they had endured similar treatment.  It called for a temporary restraining order that would keep MECO’s employees at least 15 feet away.

MECO, via its lawyers, fired back.  The suit was an unconstitutional attempt by supporters of the initiative to silence their political opponents based on alleged "sporadic petty offenses," MECO argued.  Even if the initiative’s detractors "engaged in profanity-laced insults all of the time," they said, such behavior would still be protected by the First Amendment.

Houser called the suit "frivolous" and said he was happy to let MECO’s lawyers handle it.  The suit stalled.

"Blocking" wasn’t the only problem initiative supporters encountered.  Matthew Patterson ran a nonprofit, ProVote, that coordinated signature gathering in the Springfield area.  On the night of April 25, 2012, Patterson put a box of petitions in his car.  Then, realizing he had forgotten his phone in his office, he locked his car and went back inside.

When he returned, his passenger side window was broken and the box of petitions was gone, according to Patterson and the police report he filed.  The box had contained about 5,000 voter signatures, about half of which were for the 36 percent cap initiative, Patterson said.

No arrest was ever made.  Volunteers from Kansas City and St. Louis converged on the area to recoup the lost signatures.  The final deadline to submit signatures to the secretary of state’s office was less than two weeks away.

23,000 over, 270 under

In August, the Missouri Secretary of State announced that supporters of the initiative had submitted more than 118,000 valid signatures, about 23,000 more than needed.

But the state’s rules required that they collect signatures from at least 5 percent of voters in six of the state’s nine congressional districts.  They had met that threshold in five districts — but in the First District, which includes North St. Louis, they were 270 signatures short.

A week later, initiative supporters filed a challenge in court, arguing that local election authorities had improperly disqualified far more than 270 signatures.  MECO and Stand Up Missouri joined the fray, arguing not only that signatures had been properly excluded, but also that far more should have been tossed out.

Eventually, with only a couple of weeks before the deadline to finalize the November ballot, backers of the initiative decided they could not match the lenders’ ability to check thousands of signatures.  They withdrew their challenge.

"It was so frustrating, disappointing," McCann said.  "People had spent hours and hours and hours on this initiative."

Looking to 2014

The initiative’s supporters now have their eye on 2014, and they have made the necessary preparation by filing the same petition again with the secretary of state.

The industry has also made preparations. MECO has reported adding $331,000 to its war chest since December.  Stand Up Missouri has raised another $151,000.

Last May, Jewell Patek, the same Republican lobbyist who filed the industry’s initiatives in 2011, filed a new petition.  It caps annual rates at 400 percent.

The installment lenders have continued their effort to woo African-Americans.  In December, Stand Up Missouri was a sponsor of a Christmas celebration for Baptist ministers in St. Louis, and in June, it paid for a $20,000 sponsorship of the National Baptist Convention, hosted this year in St. Louis.  It’s retained the same high-powered African-American lobbyists and added one more, Cheryl Dozier, a lobbyist who serves as executive director of the Missouri Legislative Black Caucus.  Lastly, Willie Green, according to initiative supporters who have spoken with the ministers, has made overtures to African-American clergy on behalf of World Finance.