Victoria Lusk reports that payday lender Check’n Go is closing its doors next week, thanks to voters’ wise decision to cap short-term interest rates at 36% and not fall for the payday lenders’ decoy Amendment U:
Signs posted at Check ‘n Go, 524 Moccasin Drive, reference the failed passing of Constitutional Amendment U on Nov. 8 as the reason why the business can no longer offer new loans in South Dakota. The sign also states Check ‘n Go will close Dec. 9.
…”[Initiated Measure 21] prohibits our company and companies like ours from recovering the costs associated with bringing small, unsecured loans to the market,” read a statement emailed on behalf of the business from Meredith Fossett, government affairs representative [Victoria Lusk, “At Least One Payday Loan Business in Aberdeen to Close,” Aberdeen American News, 2016.12.02].
We shouldn’t usually celebrate business closings, but in this case, we should be as happy as when we shut down drug dealers or other unscrupulous, socially destructive enterprises. Aberdeen will be better off without these loan sharks preying on our working class. Fewer people will be tricked into inescapable debt, and some storefronts will be available for more reputable businesses.
I say strangely because, according to campaign finance reports, Rod Aycox’s Select Management Resources has poured another $637,000 into its South Dakota ballot question committees for U and against 21.
Furlong burned up just about $101K on salaries and consulting (funny: pro-usury spinster Pat Powers hasn’t peeped about that consulting expense). Add $3K in cash on hand in the pre-primary report, and Furlong’s committee is down to $370.25.
Add yesterday’s $400K contribution, and Thuringer’s committee has over $522K to spend opposing IM 21.
So how do you spend half a million dollars in the last six days before an election? TV and radio space may all be bought up. Newspaper ads need to be in by Thursday or Friday to make Monday’s edition (and Tuesday? Election Day? Seriously? Your ad will only reach half as many people before they vote as your Monday ad will). Billboards take more than a week to print, and I’m willing to bet that even the digital billboards are already spoken for.
Perhaps it’s time for Lawnmower Man to make the phones ring. If the payday lenders plan to propagandize at this point, their surest bet may be robocalls. They’ll ring every persuadable voter directly and lie straight-faced right into our ears.
Or maybe they’re just saving up to go Trump and sue over the election results. Nielson Brothers Polling finds IM 21 winning (39%–26%) and U losing (24%–45%), so why fight a costly statewide battle to win 87% of undecideds on U or 71% of undecideds on 21 when you could focus your money and energy on one judge? The payday lenders won’t care if they have a case; they’ll enjoy the chaos and squeeze profits out of every extra day that they can delay certification of the results.
Hmmm… if payday lenders have $46 billion in annual revenue, and if their business is proportional to population, then in one day of operation in South Dakota, payday lenders make ($46B ÷ 365 days ÷ 320M US pop × 850K SD pop = ) about $330K per day in South Dakota. Sue over the election, stall the certification of the results and the enactment of a voter-approved 36% rate cap by two days, and the lawsuit pays back the money sitting in Aycox’s South Dakota ballot question committees right now. Stall enactment of IM 21 until January 1, maybe 40 days later than an approved ballot measure would usually take effect, and Rod Aycox and his industry pals make almost $14 million more than a normally enacted IM 21 would allow.
And if the Electoral College vote is close and South Dakota’s big three Electoral votes matter, who cares? Rod Aycox has money to make. An election thrown into chaos, like the payday lenders’ outright lies and bullying, is a trifling price to pay for padding the loan sharks’ pockets on the way to their next scam.
Stephen Minister of Sioux Falls also formed two committees last Tuesday to tackle the payday lending questions, Shame on U and South Dakotans for 21. Only his statements of organization are online; the SOS shows no report of financial activity by Minister yet.
The trial of the week takes place in Pierre Thursday and Friday, July 7 and 8, when Judge Mark Barnett hears the payday lenders’ latest effort to take away our right to vote. Former Lederman bailbondsman, now Texas resident Bradley Thuringer gets two days to clog the Hughes County Court docket with his bogus lawsuit to remove Initiated Measure 21, the real 36% rate cap, from our ballot.
I have laid out five clear criteria GUC must meet to prove their primary claim, that 2,658 signatures on the IM 21 petition are invalid because the six petition circulators who collected them do not live at the residences they wrote on their circulators’ oaths. An argument filed on June 24 by GOP lawyer Sara Frankenstein on behalf of Thuringer and the payday lenders’ ballot question committee Give Us Credit South Dakota (GUC) shows that the plaintiffs still fail to meet those criteria and their burden of proof. Consider this laughable page of legal inadequacy:
GUC acknowledges that one of the circulators it is challenging, IM 21 sponsor Reynold Nesiba, has submitted an affidavit establishing his continued residence in South Dakota. GUC whines that the other five challenged circulators cannot be found and thus “perhaps… never met” the statutory residency requirements for circulators.
When plaintiffs bring a perhaps to court, they lose. When plaintiffs are lazier than a blogger, they lose: I can find every one of the five remaining petitioners, and I don’t have millions of dollars in profits at stake.
Frankenstein invokes the 2014 Clayton Walker case, in which the U.S. Senate hopeful filled his petition with fake names and addresses. That case adds no weight to GUC’s claims: GUC has made no claim that IM 21 circulators have falsified the names and addresses of signers. GUC has not established that the circulator addresses are fake. Walker’s nominating petition was tossed based on solid evidence of fakery, and Walker ultimately pled guilty.
But fact and burden of proof won’t stop payday lenders from pouring their bottomless legal funds into bad arguments. On page 6 of the June 24 reply, Frankenstein makes explicit GUC’s topsy-turvy reading of law: “Respondent must provide evidence indicating that the circulators in fact live where they said they did.”
If that standard were valid, I could write a Post-It note to the court about the payday lenders’ sketchy Amendment U petition reading, “Prove it!”, and without any further effort, I could force the payday lenders to spend thousands of dollars proving that all of their lying, mostly out-of-state mercenary circulators somehow technically met the residency requirements when they did Rod Aycox’s bidding last fall. If Judge Barnett does not laugh Frankenstein and GUC out of court, my Post-It notes are ready.
That Sioux Falls paper lost an open-records case yesterday. Last year, Division of Banking director Bret Afdahl reversed prior practice and declined to make public the applications showing who owns payday lending stores, title loan shops, and other cash advance businesses. That Sioux Falls paper appealed to the Office of Hearing Examiners on May 27, 2015. Hearing examiner Cathleen Duenwald has finally ruled that ownership of a loan sharking outfit needs to be kept secret:
Cash advance businesses are required to submit an annual application in order to receive a money lending license from the state. The application requires the disclosure of chief business executives, directors and individuals who own 10 percent or more of a business. The Argus Leader argued the information was public.
But Duenwald said that Afdahl was correct in withholding the information, saying his decision protects the public interest.
“The information identifying bank investors and owners may do harm to a person or business as well as the bank in which they have invested,” Duenwald wrote [Jonathan Ellis, “Ruling: Owners of Cash-Advance Businesses Not Public,” that Sioux Falls paper, 2016.06.27].
I’m trying to figure out the threshold that protects owners of loan shark stores from public disclosure. Like every other business, North American Title Loan has to reveal its principal officers (Kenneth R. Wayco of Alpharetta, Georgia) on its annual report. My ownership of my house and land is public information, available to anyone who visits the courthouse. Court documents make public who owns what property, which we must know to who is responsible for nuisances or injuries that occur on that property.
Do we really not have a right to know with whom we are doing business?
South Dakota’s payday lender stooges continue to stonewall the press. South Dakota Public Broadcasting tries to get hold of Bradley Thuringer, chair of Rod Aycox’s astroturf “Give Us Credit” committee commissioned to defeat the 36% payday loan rate cap proposed under Initiated Measure 21, and gets no response. Nor does SDPB pry comment from Thuringer’s well-connected GOP lawyer Sara Frankenstein, who is doing the leg work on the payday lenders’ new lawsuit to take away your chance to vote on IM 21. Just like fake-rate-cap Amendment U sponsor Lisa Furlong, Thuringer seems embarrassed to speak to the media about the slimy and shoddy work he’s doing for loan sharks.
I have heard back from a couple of the petition circulators named in Thuringer’s lawsuit against the state, and their comments, plus publicly available information, make clear that the payday lenders are blowing smoke with their specious challenge to the honest petition that put the 36% rate cap on the ballot.
Thuringer contends on behalf of the payday lenders that six IM21 petition circulators could not be found at the addresses they wrote on their circulator’s oaths and therefore the 2,658 signatures they collected should be thrown out.
Petition sponsor Rev. Steve Hickey and his wife Kristen Hickey collected 435 signatures and put down their Sioux Falls address before they left for Scotland for Pastor Steve’s graduate studies. The Hickeys maintain their South Dakota residency and voter registration status, and Pastor Hickey tells me they do intend to come back to South Dakota. The Hickeys clearly satisfied the residency requirement when they circulated the IM 21 petition in 2015, and they continue to satisfy the statutory definition of voting residency that Thuringer questions.
Petition sponsor Reynold Nesiba collected 1,984 signatures and put down his Sioux Falls address before he moved across town. Nesiba has been in the press this year as the triumphant candidate in the District 15 Senate Democratic primary. He clearly satisfied and continues to satisfy the residency requirement for petition circulators.
Barbara Basketfield collected 43 signatures for the 36% rate cap petition and put down her Rapid City address. Later in 2015, she moved south and down the ridge from Signal Drive to Elm Avenue. She’s on the road right now supporting Lakota youth on the Mitakupi Foundation’s Sacred Hoop Prayer Run, a 500-mile run around the Black Hills through South Dakota, Nebraska, Wyoming, and Montana. Basketfield met the petition circulator petition requirement last year when she collected signatures, and she meets it today.
Thuringer bailbondsman P.I. Mike Napier attests in his affidavit in Thuringer’s lawsuit that one Lincoln Steel of Rapid City appears as a circulator of the IM 21 petition. Napier tracked Steel’s address to the School of Mines, asked around at the campus Human Resources office, and was told no one there had heard of “Lincoln Steel.” School of Mines has probably heard of Lincoln Stoel, Hardrocker chemical engineering student, engineering intern at POET, and South Dakota Bernie Sanders enthusiast. I’m just speculating, but there’s a high likelihood that Thuringer’s man misread an o as an e and based foul accusations of criminal activity thereupon. If Stoel is the circulator in question, Stoel quite likely satisfies the petition circulator residency requirements.
Not that I need to track down information and prove the petitioners’ innocence. Thuringer is making the affirmative claim of wrongdoing; Thuringer needs his dogs Napier and Frankenstein to hunt up the evidence to prove his claim. The documents they’ve filed fall far short of that burden, and the evidence I present on casual e-mailing and Web surfing from my comfy office they probably can’t satisfy that burden. The Thuringer complaint throw more spaghetti, but the circulator residency noodles won’t stick.
Rod Aycox, you’re paying these people for this shoddy work? Good grief—you might need us to regulate your industry for your own sake, so you can learn to spend wisely on a more limited budget.
On Friday, investigators began showing up on the doorsteps of individuals who circulated petitions for Initiated Measure 21, the 36% rate cap on payday loans. Two Rapid City circulators reported to me that Michael Napier, Rapid City-based bail bondsman for Dan Lederman’s Speedy Release, questioned their circulating activities on behalf of South Dakotans for Responsible Lending, the South Dakota group sponsoring the ballot question.
On Saturday, another Rapid City circulator reported that a different individual appeared on his doorstep with the same questions. On Sunday, readers in Brookings and Sioux Falls reported that Napier visited them with questions about their 36%-rate-cap petitioning. Napier showed up at Robert Klein’s house Sunday morning. By mid-afternoon he was in Sioux Falls visiting Cathy Brechtelsbauer and other circulators. Brechtelsbauer said that Napier wouldn’t give his last name (the photo makes pretty clear he’s the same guy as I reported Friday) but claimed that he “is doing us a favor in that he had already talked to about 60 people (18 to go) and he has not found any irregularities.”
Circulators, keep your information about the payday lenders’ intimidation tactics coming. And if accosted by Napier or other minions of the poverty industry, remember: you do have the right to remain silent to this non-judicial investigator, and anything you say can and will be used against you by the payday lenders in a court of law and maybe campaign advertisements. The simplest response circulators may offer Napier and his colleagues is, “Asked and answered”—you signed an oath on your petitions saying you witnessed every signature and complied with other petition rules. Everything Napier and the payday lenders’ other hired guns need to know is already written and sworn and thus far more valid than any hearsay evidence they may be gathering in their door-to-door intimidation campaign.
Two South Dakotans who circulated the petition for Initiated Measure 21, the real 36% rate cap on payday loans that we get to vote on in November, tell me a man came to their homes today to ask them questions from the following script:
The source of these questions, Give Us Credit South Dakota, was the first ballot question committee formed by the payday lending industry to fight the 36% rate cap. Led by Rapid City man Bradley Thuringer, this committee has received nearly every dollar of its funding from Rod Aycox of Select Management Resources, parent company of North American Title Loans, a big player in the payday lending industry. Thuringer reported (year-end and pre-primary) spending over $646,000 of Rod Aycox’s money as of May 27, 2016, on efforts to oppose IM 21. (That’s in addition to the over $1.778 million Rod Aycox gave to Lisa Furlong, year-end and pre-primary, to get his decoy measure, Amendment U, on the ballot to confuse voters and sabotage IM 21.)
Rod Aycox must be sending more money, because Bradley Thuringer appears to be sending out a worker to interrogate IM 21 petition circulators and dig for evidence that could be used in a court challenge to the petition that could remove IM 21 from the ballot. The Secretary of State already rejected the payday lenders’ first specious petition challenge; Thuringer appears to be using Aycox’s money to gather evidence for a specious court challenge. Such a challenge may not succeed in revoking the will of South Dakota voters and protecting the payday lenders from the wrath of the electorate, but it could distract the IM 21 ballot question committee from connecting with voters and drain their time and money in a messy court case.
So who’s knocking on circulator’s doors and trying to coax them into doing the payday lenders’ dirty work for them?
Both circulators with whom I spoke identified their interrogator as Rapid City resident Michael Napier.
Napier is a good Republican, taking time to post this shot of himself with Senator John Thune in early April between positive posts about Donald Trump.
What does Napier do when he’s not interrogating petition circulators and posing with Republicans? He works for a Republican in the poverty industry:
Another bail bondsman working for Dan Lederman is Pat Powers of Brookings. When he’s not pulling defendants out of the county jail and into unnecessary debt mandated by government, Powers writes absurdist critiques of Initiated Measure 21, the latest contending that the grassroots South Dakota effort to cap payday lending rates is really part of an out-of-state culture-warrior conspiracy to shut down payday lenders. Similar absurdity appeared in a fake newspaper circulated on behalf of District 19 Legislative candidates whom Powers strongly favored: that campaign flyer included an essay which dinged IM 21 for receiving less than a third of its money from out-of-state donors but which said nothing about the effort to defeat IM 21 being funded almost 100% by an out-of-state corporation.
Powers has worked for Lederman previously on propaganda efforts for Lederman’s Rushmore PAC.
Lisa Furlong used to live in Dakota Dunes before moving to an apartment up the road in the less swanky part of North Sioux City. Dan Lederman’s house in Dakota Dunes is less than a mile away from the Furlongs’ old place.
Dots, dots, dots… and a few more connections. Hmmm….
Michael Napier, Rapid City bail bondsman and Dan Lederman employee, is working for the payday lenders to undermine the real 36% rate cap. He will likely fail in his efforts, because, unlike the lying mercenaries Rod Aycox hired through Lisa Furlong to circulate the fake rate cap petition and disrupt the IM 21 petition drive, the folks who put the 36% rate cap on the ballot are real South Dakotans who know the rules and respect the petition process.
The payday lenders’ failed lawsuit against Attorney General Marty Jackley’s official explanation of Initiated Measure 21, the real 36% rate cap, was evidently nothing personal. The same company that sued him is also one of his biggest corporate donors:
In a minor defeat for the payday lenders, the South Dakota Supreme Court ruled unanimously today in favor of the Attorney General’s ballot explanation of Initiated Measure 21, the real 36% rate cap on payday loans.
Erin Ageton, VP of payday lending firm Select Management Resources, sued Attorney General Marty Jackley last June, claiming that he should have included a statement that the 36% rate cap would put her company and all other payday lenders out of business in South Dakota. The Sixth Circuit backed the A.G. Today, so did our Supremes, who said every one of Ageton’s arguments was wrong.
At the heart of the ruling, the Justice Lori Wilbur says what I recognized last June, that Ageton was trying to force the Attorney General to go beyond his statutory duties and write the payday lenders’ political arguments onto the ballot:
Here, even if we accept that the proponent’s true purpose with the initiated measure is to end short-term lending in South Dakota, that purpose and effect is more appropriate for political dispute and advocacy. There is no language in the initiated measure that specifically bans short-term lending in South Dakota. And, although a 36% interest rate cap on short-term loans for certain lenders might prompt those lenders to cease providing short-term loans, the initiated measure does not prohibit their continued operation [Justice Lori Wilbur, Ageton v. Jackley, 2016 S.D. 29, South Dakota Supreme Court, 2016.03.30].
The payday lenders have wasted their ill-gotten cash on this frivolous lawsuit; now brace for the loan sharks to spend even more on an advertising blitz to spread their propaganda against IM 21 and in favor of their decoy measure, Amendment U.
Update 12:27 CDT: Watch for confounding variables: Erin Ageton’s next spaghetti-throwing will probably include the claim that the 36% rate cap somehow caused EZ Payday Advance on South Minnesota to close (a closing noted with glee by Matthew Paulson):