Inside the cut-throat world of parking tickets
Posted: Friday, September 18 2009 at 06:00 am CT by Bob Sullivan
Competition for the right to profit from parking tickets is apparently pretty cut-throat.
Last month, one of the nation's largest parking enforcement companies, Dallas-based Affiliated Computer Services Inc., sued competitor Duncan Solutions of Milwaukee, accusing it of extensive corporate cyber-espionage. Affiliated says Duncan found a way to tap into e-mails from its employees, and had been monitoring incoming and outgoing private messages for two years.
Welcome to the hyper-competitive world of law enforcement privatization. State and local governments around the country are racing to sell off driving-related enforcement duties to the highest bidder, often splitting the profits with companies that take over. As detailed earlier this week, cash-starved cities are turning up the heat on parking scofflaws, hoping to plug budget gaps by pulling in millions of dollars in what's sometimes called a "curb tax." The result has been rising frustration among some drivers who say they are being treated unfairly. Many may not realize that a sizable portion of their parking, speeding and red light fines goes to a private company’s bottom line – and in some cases, enriches foreign owners.
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Ten years later, tobacco deal going up in smoke
Posted: Friday, November 21 2008 at 05:00 am CT by Bob Sullivan
Consider this the next time you see a teenager take a drag on a cigarette: Your state government likely has a financial stake in that kid continuing to smoke. And quite possibly, so does your retirement portfolio.
That was hardly the intention 10 years ago, when a collection of state attorneys general delivered a crushing blow to Big Tobacco. On Nov. 23, 1998, the nation's four largest cigarette sellers agreed to pay $200 billion over 30 years in what seemed like a victory for David over Goliath. The money was supposed to help the states pay for health care and anti-smoking campaigns. Instead, much of it -- even payments that aren't due for 20 years -- has already been spent on politically popular tax breaks through complicated borrowing schemes initiated by Wall Street investment banks.
Because these states have essentially borrowed against future payments from the tobacco industry, they are now dependent on the continued vitality of cigarette sales. If Big Tobacco stumbles, states will be on the hook for these massive, billion-dollar loans. In other words, David and Goliath are now allies.
Where did those loans come from? Perhaps from you. When Wall Street talked 25 states into borrowing against future tobacco payments -- a process known as “securitization” -- it sold bonds to individual investors and mutual funds that buy municipal bonds. Now, they are betting on Big Tobacco, too.
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