Updates from Green Delaware

Reasonable people will agree that the US is in a major political crisis.  The “presidency” of Trump has turned out to be as evil and misguided as predicted by the most pessimistic.  Every agency connected to environmental and health protection is being turned on it’s head.  The US House and Senate are under the control of nutwads.  While Trump is mostly despised by responsible people, he has a hard core of supporters, motivated by anger and hate, who do not care at all the damage being done.  They applaud it.   The more the better.  But the US faces so many profound challenges that we just can’t afford such misgovernment.Likewise Delaware is in political crisis.  The state is run by a non-visionary governor and poor legislative leadership seeming to take guidance mainly from “Chamber of Commerce” interests.  Since “corporate” control is largely the cause of Delaware’s problems, increasing the corporate chokehold will surely not make things better.

The good news is that a new generation of activists is raising it’s head in Delaware.  People do care.  I’m impressed by many of them.  Some brief profiles to follow at some point.

Communicating

When Green Delaware got started in the mid-nineties, we had a fax distribution list.  We worried about leaving out people who didn’t use email.   Now “social media” (mainly Facebook and Twitter) seem to have become for many the chief means of communication.  Email is feeling clunky.  The vast majority of the incoming emails I get are “spam.”  So what does this mean?  Over the last few months we’ve paid more attention to Facebook and sent fewer emails.  Is this good or bad?   Please tell us!  Green Delaware has a Facebook “group” and also a “page.”   Please check them out.  “Join” them.  “Like” them, etc.  Do you prefer the “page” or the “group?”

One clear and present danger is that Facebook, Twitter, and the Google search engines are private businesses that can blacklist, can manipulate, can control to a great degree what people see.   There are no rights of free expression.  While it may seem they are mainly concerned with advertising revenues, they have their own political ambitions and agendas, and they grow richer and more powerful every day.  The facilitate democracy and also threaten it.  Here’s an example of what may happen:  Google escalates blacklisting of left-wing web sites and journalists.

More Delmarva Power ripoff rate increases

The Delaware Division of Public Advocate says:

Delmarva Power Electric/Natural Gas Rate Increase Request
On August 17, 2017, Delmarva Power filed applications seeking additional electric revenues of $24.4 million and additional natural gas revenues of $12.8 million. This is on top of the additional electric revenues of $31.5 million and natural gas revenues of $4.9 million just recently put into effect.   If the rate request is approved by the PSC, an average electric customer will be paying more than $4.00 more per month, and gas customers will be paying almost as much.
Since the rate cases were filed, we have experienced higher volumes of calls and e-mails about the proposals. While it is important for you to let us know what you think about the increases, it’s even more important that you let the PSC hear your concerns. We will advocate on behalf of customers for the lowest reasonable rates (consistent with the maintenance of adequate utility service), but we can’t fight this alone. We need every Delmarva customer to contact the PSC about Delmarva’s proposed increases and the impact it will have on your families and on the state. Written comments may be filed at https://delafile.delaware.gov/Complaints/AddPublicComments.aspx (reference docket 17-0977 Electric or 17-0978 Gas). The PSC will also be holding Public Comment Sessions where you can speak out in person. We’ll be sure to let you know when and where they’ll be held – we’re counting on you to attend!

Rep John Kowalko says:

I’ve petitioned the Public Service Commission to intervene in the two Delmarva Power rate increase request dockets listed here. I have been granted intervener status in both cases and hope to be able to mitigate some of the economic burdens the ratepayers and business users will be burdened with.
I have intervened in more than a half-dozen cases previously with varying degrees of success on behalf of the electric and gas users. I believe that the amount of increase being sought by DP&L is excessive and would be punitive to middle-class and poor users as well as the small business community. It could also disaffect large industrial users and stifle job growth and economic progress. But it will require quite a bit of effort on my part and that of the Delaware Public Advocate’s office to influence the PSC commissioners in that regard. Our efforts, on your behalf, will also be more achievable if all of the members of the public and the business community participate in the process with public comments and by attending public comment sessions in substantial numbers. We are fortunate to have a new Public Advocate, Drew Slater, who is committed to working on your behalf and his office and I will try to establish a level playing field and dedicated advocacy that benefits your interests. Please watch this site for updates with regard to public meeting dates, times and locations and please attend and speak out on your own behalf.

Green Delaware says:

Many are commenting that these rate increases are burdensome to ratepayers.   Indeed they are.  But there is another argument to be made:   The wholesale price of most all electricity sources has been stable or dropping:  solar power is getting cheaper, wind power is getting cheaper, gas power is getting cheaper.  Electricity sales are not increasing so large investments in new power plants are not needed.  So what’s up?  Why are retail prices zooming upwards in Delaware, while wholesale costs are static or declining?  The answers are both simple and complex, but they are tied to “regulatory capture”of the regulatory bodies–such as the Delaware Public Service Commission–by the utilities that are supposed to be regulated.

The good news is that the PSC staff, the Public Advocate, and all the intervenor as asking that the Delmarva Power request be dismissed.  Green Delaware will be joining in this request, which the PSC is supposed to decide on November 9th.   An action alert will be along with details about how you can support this request.

A piece of good  news–lead paint and water towers

In a recent alert we urged readers to contact Governor Carney in support of a campaign to require appropriate safety measures when sandblasting lead paint from water towers, bridges, and other steel structures.  See  Protect Delawareans from lead poisoning

The good news is that the DNREC has told us it is working on a regulation, meanwhile discussing voluntary measures with water  tower owners.  The bad news is that the proposed regulation will only apply to water towers and not to bridges and other structures.   We’ll keep you posted on how this develops.

Delaware as a safe harbor for business misconduct

The recently indicted Trump campaign officials did much of their mischief through business entities created in Delaware.
The News Journal has a good story on this.
Mueller: Manafort, Gates laundered Ukrainian money through 9 Delaware LLCs and corporation
Margie Fishman, The News Journal
Former Trump campaign chairman Paul Manafort and his business associate, Rick Gates, have been indicted by a federal grand jury on charges of conspiracy against the United States and other felony charges Time
868282908 A CLJ POL USA DC  
Nine Delaware corporations and limited liability companies helped former Trump campaign chairman Paul Manafort and former Trump campaign official Rick Gates shield from U.S. authorities millions of dollars in payments from the Ukraine, according to a federal grand jury indictment released Monday.
Of the 17 domestic business entities implicated in the scheme, the largest number were domiciled in Delaware, Justice Department Special Counsel Robert Mueller found.
The latest revelations of Delaware LLCs linked to financial fraud have emboldened open government advocates, such as State Rep. John Kowalko, to renew calls for more rigorous state review of LLCs before they are allowed to set up shop here.
These are not “made in Delaware” companies, Kowalko, a Newark Democrat said Tuesday. “We can endanger the legitimacy of the LLC itself if we allow [them] to go uninvestigated.”
Secretary of State Jeffrey Bullock has no plans to change course on the LLC approval process or shut down Manafort’s and Gates’ Delaware business interests, department spokesman Doug Denison said this week. 
The 31-page indictment made no mention of the Trump campaign or of Trump himself. Rather, it focused on Manafort’s and Gates’ duties as political consultants and lobbyists working with the Ukrainian government from 2006 to 2015. Those jobs generated tens of millions of dollars hidden from U.S. tax collectors in a number of foreign companies and bank accounts, Mueller alleged, supporting the men’s extravagant lifestyles.
Manafort and Gates were charged with 12 counts related to money laundering, tax evasion and foreign lobbying. Both pleaded not guilty to all charges.
According to Delaware records, three of their business entities­ Global Sites LLC, Jemina LLC and Smythson LLC ­ were voluntarily dissolved in 2013 and 2014. In March of 2014, the state voided Davis Manafort Inc. after it failed to file annual reports and pay taxes, Denison said.
DMP, a corporation listed in the indictment as being located in Delaware, is not on file with the Secretary of State, he said.
The remaining four entities are listed as active and in good standing with the state. Delaware does not require the people behind LLCs to disclose their involvement publicly. Instead, they hire registered agents to serve as a contact for correspondence.
“It’s not in our power to just cancel a company because of something that’s been reported or brought into a criminal proceeding,” Denison explained. “We cancel entities when federal law enforcement authorities direct us to do so.”
Nick Wasileski, president of the Delaware Coalition for Open Government, thinks the state should be more proactive in rooting out corruption.
“DelCOG does not have a problem with limited liability companies,” Wasileski said, noting that they promote business and protect owners’ assets. “But this thing has been hijacked by money launderers and drug traffickers as fronts to commit crime.”
Wasileski’s group was instrumental in shepherding House Bill 57, sponsored by Kowalko, Rep. Kim Williams, D-Newport, and Sen. Bruce Ennis, D-Smyrna.
The legislation would prevent any individual, groups or business entities flagged as a security threat by federal agents from operating in Delaware. The bill also requires that the state’s registered company agents and the Secretary of State screen applicants against a federal sanctions list, which includes terrorists and drug traffickers. The list is maintained and updated by the Office of Foreign Assets Control under the U.S. Department of Treasury.
In June, the House Judiciary Committee tabled Kowalko’s bill in a 6-3 vote. At the time, Rep. Melanie George Smith, D-Bear, an attorney with the Wilmington law firm of Richards, Layton & Finger, said she couldn’t support it because the language had not been vetted by a group of corporate lawyers with the Delaware State Bar Association who review all proposed legislation dealing with corporations.
Smith, who works as a pro bono coordinator for her firm, did not return a phone call Tuesday. Richards, Layton & Finger runs an LLC division, which advertises itself on its website as “Delaware’s largest and most active alternative entities practice.”
Smith has a conflict of interest and should abstain from voting on the issue, Kowalko said.
Calling his bill a “very significantly diluted” version of what he initially proposed, Kowalko acknowledged that the legislation, if passed, would have no effect on Delaware business entities associated with Manafort and Gates, since they don’t appear on the federal sanctions list.
State records show that the companies were registered with various Delaware agents in Dover and Wilmington, including The Corporation Trust Center at 1209 N. Orange St. in the Brandywine neighborhood of Wilmington.
That address is also home to Apple, American Airlines, Walmart, companies registered by Hillary Clinton and Donald Trump and about 285,000 other business entities ­ more than any other known address in the world, according to a report last year by The Guardian.
Tainted reputation
For more than a decade, Delaware LLCs have been linked to high-profile financial crimes. Delaware entities have appeared in connection with Russian arms dealer Viktor Bout, Mexican drug lord Joaquin “el Chapo” Guzman and former lobbyist Jack Abramoff. 
Last year, a Chilean airline agreed to pay U.S. agencies $22 million in penalties for bribing union bosses. To conceal the payment, officials from LAN Airlines first transferred the money to their subsidiary, a Delaware-registered limited liability company called Atlantic Aviation Investments LLC, according to the U.S. Securities and Exchange Commission. LAN also owned three other Delaware limited liability companies, the SEC found. 
That same year, eight Delaware LLCs were named by federal prosecutors in connection with a scheme to embezzle hundreds of millions of dollars from the Malaysian government with the help of a Hollywood producer behind the film “The Wolf of Wall Street.”
Multiple research studies by academics and nonprofit groups have singled out Delaware for enabling tax evasion and other nefarious activities. Roughly a quarter of the state budget comes from fees paid by companies; Delaware counts more than 1 million registered businesses.
In conducting his own research earlier this year, Wasileski found that two Delaware LLCs in good standing ­ 200G PSA Holdings and Agusta Grand I ­ were listed on the federal sanctions list as being associated with foreign narcotics trafficking kingpins.
In February, the Office of Foreign Assets Control sanctioned Venezuelan Vice President Tarek El Aissami, saying he “played a significant role in international narcotics trafficking,” along with his “frontman” Samark Jose Lopez Bello. Bello was associated with five U.S. companies blocked by federal regulators, including two formed in Delaware with offices in Florida.
Wasileski said he alerted federal agents in the spring that Delaware still showed 200G PSA Holdings as active. Wasileski then reached out to Denison at the Secretary of State.
In a June 1 phone call, Wasileski said, Denison said both business entities were no longer permitted to operate in Delaware, after consulting with federal officials. That same day, both entities had their status changed to “cease good standing” on the Secretary of State website.
DelCOG board members Christine Whitehead (center) and Nick Wasileski (right) address members of the media. (Photo: Saquan Stimpson, SAQUAN STIMPSON/SPECIAL TO THE NEWS JOURNAL)
Denison said this week that federal investigators, not Wasileski, alerted his office that the LLCs were on the sanctions list. The entities ceased operating in Delaware as of February, he said, but the website wasn’t updated until June 1 when they missed their tax payment.
In the future, Denison said, the Secretary of State could review its process for updating public information.
In the meantime, Bullock’s office and members of the Delaware Bar have balked at toughening the LLC approval process, explaining that it would be cost-prohibitive and result in application processing delays.
Wasileski says he doesn’t mind if the state loses business as long as criminals go elsewhere.
“One of the Secretary of State’s responsibilities is to protect the public,” he said. “If they won’t advance this bill with narcotics trafficking, what’s it going to take?”
USA Today contributed to this report.
Contact Margie Fishman at 302-324-2882, on Twitter @MargieTrende or mfishman@delawareonline.com.
Delaware corporations and LLCs appearing the Manafort/Gates indictment:
Bade LLC, created in January 2012. Active and in good standing.
Davis Manafort International LLC, created in March 2007. Active and in good standing.
Davis Manafort, Inc., created in October 1999. Inactive in Delaware.
*DMI, created in June 2011. This company was listed in the indictment as a Delaware entity but the Secretary of State has no record of it.
Global Sites LLC, created in July 2008. Inactive in Delaware.
Jemina LLC, created in July 2008. Inactive in Delaware.
Jupiter Holdings Management LLC, created in January 2011. Active and in good standing.
LOAV Ltd., created in April 1992. Active and in good standing.
Smythson LLC (also known as Symthson LLC), created in July 2008. Inactive in Delaware.

That’s all for now.

Best,

Alan Muller

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