Wednesday, August 13, 2008

Is Anybody Telling the Truth About Payday Lenders?

Once again I'm in violated kitten territory. That's what I call it when I'm defending the awful against charges of the horrendous. It comes from an example I give of an argument I just can't seem to avoid:

Them: Stalin liked to rape kittens.
Me: There is absolutely no evidence Stalin raped kittens.
Them: So are you a Stalinist or just a Stalin apologist?

In this case, the bad guy is Ohioans for Financial Freedom a.k.a the Reject HB545 committee a.k.a The LoanSharks. And the kitten abuse? Fraud and Deception in signature collection.

You see, Ohio Coalition for Responsible Lending held a press conference yesterday in which they accused petition circulators of paying homeless people a dollar each to sign the referendum petition, of blatantly lying about the purpose of the referendum (claiming that it would cut interest rates or even put the "loan sharks" out of business), telling people that they couldn't vote unless they signed the petition, and these tactics were attributed by Bob Hagan (D-Youngstown) to the fact that circulators were being paid a dollar per signature.

Now, if anything, I'm biased to believe that the Payday Lenders would either explicitly or implicitly encourage signature gathering by any means necessary, and Ohio has certainly seen it happen before. Sandy Theis, the spokesperson for the anti-referendum group was also the spokesperson for Dancers for Democracy, a group that was the public face of the effort to get a repeal of last year's stripper bill on the ballot. That collection was so hopelessly flawed that the invalid signatures turned in outnumbered the valid signatures better than 2-1, with the pay-per-signature compensation model blamed for the fraud and sloppiness.

But I was surprised at the current allegations, because I had written about the Ohio Petition Company, whose entire sales pitch was based on getting valid, bulletproof signatures, using real time validation and abandoning the pay-per-signature model. When I looked more closely at the allegations, a couple of things stood out. The one that started me poking around first was this:

If you're getting paid $1 per signature you collect, you're not going to offer $1 to someone for signing. You're breaking even.

So I looked around to find out if there were more details about the story of the homeless shelter. It didn't make a whole lot of sense. How many voters at the shelter are registered to vote at their current address? You couldn't pick a less likely place to find valid signatures. The Middletown Journal had this:

Schirmer said Tuesday, Aug. 12, they were approached by a man and woman in late June who said they worked for a payday lending company and would lose their jobs if the measure didn't pass. Then they offered money.

"Right then, as soon as they said that, 15 people said 'we need a dollar,'" Schirmer said. "We went across the street and bought a soda."
Now I've got another red flag. There was a lot of wrangling about the petition language right before I went on vacation. Looking back, the AG rejected one version of the language on June 19, which was more than a week after it was turned in to her. The final language was approved on July 10. There are signatures that are required to even get the petition to the point where the SOS and AG look at it, but it's a much smaller number. As near as I can tell, then, between June 11 and July 11 there were no petitions in circulation. The preliminary signatures were already at the SOS before late June, and there wasn't an approved petition for the statewide drive until mid-July.

As for the woman who said she was told she couldn't vote for or against the issue in November unless she signed... that's not totally false. It sounds as if the true statement "you can't vote for or against the bill in November unless enough people like you sign the petition (because it won't be on the ballot)" was translated to "you can't vote for or against the bill in November unless you sign the petition." It's upsetting, but it seems like a performance issue rather than nefarious intent.

Which brings us to what I consider the worst allegation: Circulators are saying whatever they think will get people to sign. If it is true that circulators are paid by the signature, and if it is also true that real-time validation makes it so that circulators only get paid for valid signatures, such deception is exactly what you would expect to happen. Given that OPC's website exclaims in bold that "We pay by the hour, not by the signature," either Hagan is wrong, OPC is lying, or someone other than OPC is paying circulators. That last seemed the most likely, so I pursued it first. At least one source told me that Arno Political Consultants had been brought in by the lenders to collect signatures along with OPC.

So, is it all the fault of Arno and a pay-per-signature compensation model come back to make a mockery of the process? That's really unclear. I contacted Sandy Theis and asked her if the circulators who had given her misleading info were employed by OPC or APC (apparently the OPC circulators have blue t-shirts and ID's on a lanyard). Ms. Theis said:
"I have no evidence of anybody other than the Ohio Petition Company. They were the only one listed on campaign finance reports, and the only ones I saw. Most did have the blue T-shirts and/or a badge around their necks."
I looked at the campaign finance reports (search on reg# BI1373), and OPC is in fact the only company listed on the disclosure, but the semi-annual report only covers expenses through June 30, before statewide signature collection had commenced. I emailed the public info e-mail address at APC earlier today, but at this point have not heard back. The statement that 'all' the circulators approached by Theis were employed by OPC but only 'most' had the uniforms only muddies things further.

So, I don't doubt that some circulators are lying to get signatures. I've heard the audio. I'd like for it to stop, but until I can figure out who's actually collecting signatures, who's paying them, how they're paying them, and which of them are consistently lying, it's difficult to figure out who's to blame.


LisaRenee said...

We're on the same wave length - all we need to do is call the SOS tomorrow and ask who's filed out a Form 15.

I find it really hard to believe that Ohio Petition Company could be involved in the accusations. Something about this whole situation does not pass my smell test...


Joseph said...

Well- I heard the pay day lenders rip off poor people and use the money to buy kittens. Lots of kittens.

Greg said...

Why is it so hard to believe that a payday representative would be the one training and providing talking points to circulators? Smell test? They are on tape! And Bill Cohen got them on tape!

It can't get any more cut and dry than that, I'm afraid! You also question the fact that 15 homeless individuals were paid by a petition circulator. Many circulators are paid $1.50 per signature, not always $1 per signature. And it was suggested that the circulator may have been an employee or manager of a payday loans store (providing a broader motive than "breaking even"). There were 3 different summary language petitions in circulation and they were in circulation during that period. The AG rejected 2 versions and approved a third.

The payday lenders have displayed no behavior that would suggest we should trust anything they have to say. Their million dollar ad buys with their actor-farmer and mother of two should provide us with enough skepticism. If they think everyone wants 391% interest, why don't they mention that?

bonobo said...

Let me start off by granting you your final point: The Payday lenders are dishonest. Their two ads are horrible (not to mention something that nobody seems to mention, that the origination fee has been raised to $15 overall on the loans, so if it was a simple $100 loan, farmer and mom would still have the choice of paying $115 for $100, just not $460 for $400). It is also obvious that many circulators are not telling the truth. As you say, they've been nailed dead-to-rights.

And yet, we lack a smoking kitten.

What I don't have is the pathway that goes from Evil Lenders to Felony Circulators. First of all, the circulators don't work directly for the lenders, they work for a petition company hired by the lenders. This doesn't preclude the lenders from getting involved in the training, but the assumption would be otherwise unless you've got evidence. Second, the company that was originally hired does not pay per signature, which takes away any real motivation for lying away from the circulators themselves.

As you said, a PL manager would have more motivation than 'breaking even,' but why would the lenders spend hundreds of thousands of dollars on paid signature gatherers, then have rogue managers spend extra money to buy unreliable signatures in Butler County?

And the assertion that the lenders were circulating petitions that had already been rejected or that hadn't yet been proposed is simply incredible.

The latest framing of the issue from opponents of the referendum asserts "the statewide pattern of misinformation we are seeing suggests that circulators are either being instructed to give out false information or are poorly trained."

The first is an explosive charge. The second not so much.

Finally, my point is not that the referendum should make the ballot. I'm on the record saying both that I hope and believe that the lenders will be roundly defeated, if not during the signature phase then definitely at the ballot in November. My interest and concern is with the "Direct Democracy" process itself, and the ability of groups with narrow but deep support to get on the ballot.