Tax-exempt bonds benefited oil industry more than NOLA neighborhoods
These houses in the Lower Ninth Ward of New Orleans were still abandoned in December 2008, when Flickr user Rain Rannu took this photo.
Ariella Cohen, co-founder and staff reporter at the nonprofit New Orleans news site, The Lens, found that far more of the tax-exempt bonds issued to rebuild Louisiana after Hurricane Katrina went to the oil industry than to hard-hit areas in New Orleans.
In a piece for Newsweek marking the fifth anniversary of the storm, she writes:
“New Orleans has so far received a total of $55 million in bonds shared between eight projects—or less than 1 percent of the more than $5.9 billion issued statewide. None of the bonds issued for New Orleans projects went to development in hard-hit and still-struggling areas like the Lower Ninth Ward.
Instead, the federal largesse has been poured into oil companies operating far from New Orleans. Since Congress’s unanimous approval of the GO [Gulf Opportunity] Zone Act, Louisiana officials have issued nearly $1.7 billion in tax-free bonds—about one third of the total issued — for projects that contribute to the production of oil. Preliminary approval has been secured to tap millions more.”
Today’s Tip: Ask for documentation of how promises were carried out, Ariella says.
Ariella Cohen
She requested Louisiana Bond Commission records to see how much in bonds had been issued. She then imported the data into Excel to sort it. She says she also reviewed commission meeting minutes to see how the money was spent.
Louisiana, West Virginia, and Connecticut are some of the states that post online the minutes of bond commission meetings and other details. More info on municipal bonds issued since 1990 is available at EMMA, a website created by the Municipal Securities Rulemaking Board. EMMA is to munis as EDGAR is to stocks.
Ariella says what surprised her most about the story was that state officials wouldn’t comment.
“No one took me up on that,” she says.
If you’d like to sharpen your skills in using Excel and analyzing data, check out the free “Be a Better Business Watchdog — CAR for Business Journalists” workshops on Oct. 11 in Atlanta and Nov. 9 in Milwaukee. These workshops are co-presented by the Donald W. Reynolds National Center for Business Journalism and Investigative Reporters and Editors. You do not have to be a member of IRE or have previous database experience to attend.
Also, if you’re looking for more data from the disaster front, IRE just made available for a small fee the Small Business Administration disaster-loan records from fiscal 1980 to 2009. You can search the database of more than 1 million records to find who got SBA disaster loans in your market and who is not paying them back.
