The Corruption of America - Who is to Blame

As far back as Aristotle in his writings on Generation and Corruption....Corruption in business and politics has existed and in most times flourished.
In his paper The Concept of Systemic Corruption in American History...Professor John Wallis details two types of corruption exist.
The first is ....Systemic Corruption....This is when Politics / Government corrupts Economics / Business.
The second is ....Venal Corruption....This is where Economics / Business corrupts Politics.
Corruption used in context means broken not illegal.
Systemic Corruption has been addressed and stressed through the ages.....setting up rules...conflict of interest codes...setting up laws and punishment directed at those in political power. To a degree these laws have been somewhat effective in keeping this kind of corruption in check at least in terms of becoming rampant.
Venal Corruption however- has for the most part been largely ignored-and been allowed to flourish in the fabric of "Free Enterprise". Here in the United States it has become a way of life. There are many examples that Corporate America has either bought or influenced the politics to further their goals and objectives even at the cost of the public health and well-being.
One recent case is the Health Care debate- Presidents Teddy Roosevelt- Harry Truman- John Kennedy-Lyndon Johnson- Richard Nixon- Bill Clinton and Barrack Obama all attempted to implement Universal Health Care and all failed. The premise of Universal Health Care is accepted in every other modern industrialized country in the world...it is a given ....it is a right...except in the United States. Whenever this plan is raised- Corporate America brings out all the propaganda tools at its disposal and floods the airwaves with such ludicrous and unfounded arguments like- "People in Canada have to wait for procedures for months" "You can't chose your own Doctor" “We already have the best Health Care in the world” Scare tactics and propaganda… All of these statements are false. The United States Health Care costs per capita are the highest in the world….#1 at 6700$ per capita and yet our overall quality of Health Care stands at #37 . I have traveled extensively around the world and have experienced firsthand other countries health care systems and all have been positive and no cost… I have made some great friendships from my travels and one thing my friends would all say is they would not trade their Health Care System for that which we find here in the US…..no way….Do they complain at times…yes they do …but when making a comparison to what we have …they are very content. Our paradigm cannot change until we realize there is a problem and that there are better ways to administer Health Care. Why can’t this paradigm shift…because when the subject is debated we face the power of the Economic Special Interests who stand to lose with a change- Insurance- Pharmaceutical-Medical Companies- What I would call the Health Care Industrial Complex. This is an example of what Wallis called Venal Corruption. Politics / Politicians are “Bought”- Government is corrupted in its mission to provide for the common good and its health and well-being.
What is happening now on both sides of the political spectrum is directly tied to the notion of Venal Corruption and its effects on job loss- disparity of wealth distribution and the overall economy. Both sides are frustrated and feel like they can’t take it anymore. I find it interesting that the Tea Party and Occupy Wall Street have some basic premises they share in common. They both believe the System is broken and needs to be fixed and both have distrust and resentment to the financial industry.
I don’t want to be misunderstood- so I must qualify a point.
Charles Reich wrote in his visionary book “The Greening of America” in 1970-“What has happened is not about one person, it is much more, it has become a way of life” There is no one person, organization, politician, company or governmental body to point the finger at- it has become the American Way of both doing business and governing. So – it would also hold true that not one individual or entity can change it for the better. Reich also wrote in somewhat prophetic way in 1970- “ The United States is in the midst of an all-consuming spiritual and political crisis, for which the only cure is a new kind of revolution, "a revolution by consciousness." War and poverty, uncontrolled technology and the destruction of the environment, the Corporate State and bureaucracy, the artificiality of work and culture, the absence of community--all are conspiring to produce the most "devastating" impoverishment of all, the "loss of self, or death in life." Does this sound familiar?

What is happening now is a revolution by consciousness.It is an awakening.
It is not one person or organizations fault- the fault is with the “System”- it wasn’t Goldman Sachs- Fannie Mae- Investors- the President or Congress- in looking at it from a root cause analysis standpoint – it is the system- the System is at fault. There are so many pieces and moving parts to the system and the existing paradigm. So- as one looks at the system- we need to analyze the processes and make the necessary changes that truly affect the System and its ability to provide desired results -one at a time. There will be more questions in the beginning and not many answers. The revolution by consciousness will take time.
A larger and more important discussion on a philosophical level must take place first and that is “What do we want from Government” What is Government’s role in our lives…in the world…in commerce..?” Once we have a clear understanding of the role of Government is and its goals ….it will be clearer then for one to analyze the processes that directly influences and changes the System for the better.
The economic crash- loss of liberties- lack of jobs and wealth disparity are symptoms not causes and we need to insure we look to the root cause of each and approach finding solutions in a methodical process- understanding the impacts of those decisions. For every action there is a co-equal reaction.We need to be deliberate and dedicated.
As an example of just one issue….
One piece to the puzzle is the inability of the House of Representatives to function in the best interest of our country- it is broken and has been broken. It was not functioning properly under the Democrats as it is not functioning now under the Republicans. What is the root cause? Politics? Special Interests? Far left? Far right? Maybe a combination of all?
I looked to the founding fathers and their intent behind the Constitution in its establishing the House of Representatives- Citizen Representatives – designed to represent the interests of ordinary people in their districts. In the beginning House members were only paid a per Diem for expenses- no offices in Washington DC- no staffs- they were farmers and common people who came to Washington once a year- during February -when there were no crops to be tended – made law and went home. They were not professionals – they were common citizens. I firmly believe the founding fathers never intended the House of Representatives become a body of professional politicians. The members of the house are elected to 2 year terms which puts them in a position of “Always Running for Re-Election” The "Political Windsock" becomes the guiding light in the decision making process. In addition- there are no term limits which further inhibits their ability to govern for the people and by the people. After a few terms of being in the DC Bubble they lose touch with their constituency and fall prey to the special interests and Party Politics and become impotent to making decisions that are in the best interest of their District.The longer they stay in the bubble the less effective they become in relation to their constituents needs and the needs of our country as a whole.
So- that is a flaw in the System- How do we fix the process such that our representatives act in our best interest and not special interests? Enact term limits for members’ of the house to 3 terms and expand the term to 4 years. The rationale to increasing the term length is to allow members to not be always running for re-election- allow them time to govern without political pressure. The public’s memory is short. Give members time to govern effectively without the political wind sock pressure but limit the number of terms so they do not get so entrenched in the System that they lose touch as to why they are there- To Serve and not to be Served.
There are many ...many more issues to be discussed and solutions found in order that we may fix the system and do away with the corrupting factors that stand in our way of success- Norman Vincent Peale described it as the "Process on De-confusion"- take a large problem and break it down to its smallest piece....analyze it and act to solve...eventually the system will work for all....because We are the system and WE can change it. I do hope the process is done with class and integrity with the good of all in mind.

The Patrick Henry Hotel- The Lost Years- 1990's

In 1990 Affirmative Equities purchased the Patrick Henry Hotel for the purpose of converting it into a Senior Living facility- it was a forced purchase given a deal gone bad with then Roanoke developer Richard Hamlett – that is another story for another time. What has been lost in the institutional memory in Roanoke is the” Why the Patrick Henry Hotel failed?” and what effects of a Public Private Partnership can have in the private business sector. When the Hotel was purchased in 1990- the initial plan was for it to be positioned as a Senior Living facility- catering to those who would want to live in an urban area with the charm of a downtown hotel- 1990 in Downtown Roanoke did not have much going for it- although there were some real brave pioneers such as Center in the Square- Davidson's- Corned Beef was in the Market Building- Shuckers Bar and Billy’s Ritz- Salem Avenue was the place to watch the women of the night flaunt their wares and the Patrick Henry Hotel was on its last breath- the once beautiful lobby had been built out in a series of office spaces- the Mezzanine had been barricaded – walls erected and additional office space was added- the Jefferson Ballroom was home to Wheat First Securities with its rambling cubicles and computer stations- the sleeping rooms were dated to the 1960’s with green shag carpeting that crunched under your footsteps- and with furniture that actually now is considered art deco- The streets in downtown rolled up at 5:00 and little other than the Festival in the Park event went on- people worked in downtown Roanoke- they just didn’t shop-dine-or entertain themselves there-

As it turned out- the plan for a senior living facility as an option for a use for the Patrick Henry Hotel died a quick death and ownership reviewed its options- and the only other possible use would be as a hotel- it was a long shot- I was working for Marriott Corporation at the time in Washington DC and I got a call from the ownership group headed up by my cousin Andy Jubelt – he asked me as a favor to come down to Roanoke for a long weekend and give my input- oh- and when he said Roanoke-I like a lot of others thought – “Cool Roanoke Rapids- a long weekend at the beach” I agreed- but when he gave me directions I had no idea where Roanoke Virginia was- Driving into town on Friday night was a little on the scary side- all the vacant buildings- little signs of life – but lots of available parking-

When I got to the Hotel and went in- there was no real Lobby- like I said –it was a series of office corridors and dead ends- a gentleman dressed in jeans and a plaid shirt sat behind these bars at the Front Desk and asked me if I needed a room- I told him I was here to see Andy and he directed me up to the Governor’s Suite on the Mezzanine level- The Governor’s Suite- classic 1960’s motif with worn out paintings- powder blue shag carpeting- Victorian style furniture and a Sauna- I was told for years it was the residence of the former owner- William Carder- uuummmmmm- again another story for another time- We went to Corned Beef that night for dinner and I was introduced to Roger Neel and Al Pollard- it was a cool little place in the Market Building- serving great sandwiches- with nothing else in sight open and no other patrons other than Andy and myself- I learned about Center in the Square and plans that were hoped for to rejuvenate downtown-

The next morning we walked the hotel and it was very depressing – a flea bag – one item though was the Lobby- like I said it had all been built out into a maze of offices with a drop ceiling- so we got a ladder and pushed up one of the ceiling tiles to reveal about 20 feet up was another ceiling with some ornate finish work- we had no idea what the original hotel lobby looked like- there were no pictures around to guide us- there was no internet to search- it wasn’t for about a year later that a person came by the hotel with book of the original architects photos and donated them that we knew what the Hotel looked like in 1925- and it became a guide for further renovations.

For about the next year I continued to give whatever guidance I could – while a major renovation was taking place- 3 million dollars of PRIVATE Money was spent to do what was then called a rebirth of the Hotel Patrick Henry- The Grand Reopening was hailed a huge success with speeches by politicians- business leaders and local organizations-all touting the re-birth of the Partick Henry and its future benefits to Downtown Redevelopment- The Patrick Henry was back-

The only piece the owner missed- was they had no experience in running a hotel and they had a lot of their money riding on its success- they tried for a few months to run the hotel from New York sort of by Committee- no one on property had the responsibility or authority to make any significant decisions-not a good way to run a complex business-

So I got a call at Marriott from the owners to meet and discuss a deal to have me come on board – move to Roanoke- and take over running the day to day operations of the hotel and form a management company- A long story short- they made me a deal I couldn’t refuse and moved to Roanoke in March of 1992- Not to belabor on successes or failures – From 1993 to 1995 the Patrick Henry Hotel did very well both emotionally and in terms of profitability- it ran over 80% occupancy and had become part of the Community- In 1994 it hosted over 70 Wedding Receptions- Guests included Bob Dylan- Neil Diamond- Guns and Roses- Tony Bennett- Senator John Warner- Hal Holbrook- and many others- Our staff became very involved in the Community with programs such as the Tour Du Pont – Blues and Jazz Festival- St. Patty’s Day Parade- Downtown Roanoke Inc.- Sponsoring with WSET-13- the largest Business After Hours Event of the year for the Roanoke Chamber of Commerce- the school system- one of our favorite annual events was sponsoring the Elementary Schools Manners Day lunch- I won’t go on- but least to say all was well for the staff- community and the owners- until- Renew Roanoke ……….Renew Roanoke………

Renew Roanoke- a public private partnership to revitalize the Hotel Roanoke – and build a City owned conference center attached to the Hotel……..Public Private Partnership……Virginia Tech…Norfolk Southern- City of Roanoke- Local Banks- the Business Community all partnering to create instant competition using public funds- We could read the writing on the wall and it wasn’t good for the Patrick Henry Hotel- My experience with Marriott included working with Feasibility Studies and development -told me that there was not enough demand in downtown Roanoke to support the increase in rooms inventory. It was obvious that we were in deep trouble if this project came to fruition- so the fight for the future of the Patrick Henry’s future began - Deep down we knew it would probably be futile- the opposition was well equipped with deep public dollar pockets and the community excitement about the possibility of the “Ole Lady” re-opening was at a fever pace. The Renew Roanoke Group represented all the regional movers and shakers in the business and government sectors and they hired as their front man- the mechanic to put this whole creative financing package together was – Brian Wishneff an x Economic Development Director for the City of Roanoke- A formidable opponent – he crafted the Feasibility Study and Market Analysis along with what would become an extremely complex financing deal consisting of Historic Tax Credits- Soft Money from the local banks- public contributions- City Funds-along with some debt and equity. As loud as we could scream Foul – it all fell on deaf ears- I can remember that a local TV station carried a sort of live debate on the evening news between me and Brian Wishneff each of us debating the numbers …the impacts….we tried to make the case that this public private partnership was going to put the Patrick Henry out of business. We sought legal counsel but again to no avail. No one was listening. The ownership group was facing the possibility of losing all of its investment. A private money investment versus public investment was totally unfair- we could not compete. An analogy might be say the City and Virginia Tech decided they would go into the construction business – partnering with all the banks- the business community and the public with the additional caveat that all business these banks did vis a vis construction loans would be contingent upon using the new construction business- the same would go for City contracts- would anyone in the Private sector owning a construction business complain of unfair practices- you bet they would-

Battle lost- 1995 the Grand Re-opening of the Hotel Roanoke and City owned Conference Center- we had up until that time been running 80% occupancy and after the re-opening it dropped quickly- that year we ran about 60% mostly because of our strong wedding business and some loyal business travelers- But with the City requesting anyone traveling to Roanoke for City business to stay at the Hotel Roanoke- Norfolk Southern – Virginia Tech- the Banks- the business community- all on board to support the Hotel Roanoke- it was basically over- How could we compete? Especially given the deep pockets of public money that would fund any operating shortfalls for years- and I to this day suspect a lot of additional monies were allocated to cover operating losses for quite a while. The market studies done at the time could hardly support the 124 sleeping rooms of the Patrick Henry much less the 330 rooms of the Hotel Roanoke.

It went downhill fast- We had gone from being a profitable venture to one that lost quite a bit over the next years- the ownership group didn’t have the deep pockets of a Virginia Tech or Roanoke City- they could afford to fund operating shortfalls forever- we searched for another highest and best use- and given the Hotel Roanoke coming on line- it wasn’t going to be a hotel- even now 2011 the demand is not strong enough to support another downtown hotel- so the decision was made to do a study to convert the property back to what was originally intended to be when it was purchased in 1990- Senior Living-it was the only viable option at that time to try and save the asset- now in the Real Estate jargon what once the Patrick Henry Hotel had become an asset- on life support- an asset with negative value- and it got worse- a HUD loan that had been assumed in the initial purchase and kept because of the low interest rate got in arrears – the ownership group tried to negotiate the note but to no avail- really the only way to fairly negotiate terms would be to let it go into default then bargain- and eventually they did and the note was satisfied- next were new fire codes had been implemented and could not be grand fathered- We received a notice of non-compliance and faced about $160,000 in retrofitting a sprinkler system to the upper floors- I must say now that the City of Roanoke acted in a generous professional manner throughout this process- years went by with the owners doing some of the work but never completing it-

Without a plan B there is no plan A- by 1999 the Hotel was losing about $77,000 a month- our only real rooms business was on the weekends with Weddings- and we were still trying to put together financing for a Senior Living Facility- numerous market and feasibility studies were done with no takers in terms of financing- in 2000 we approached the City of we could get a letter in support of the project only to be told – “We’d like to see it as a Hotel” - Frustration set in – it would not and could not work as a hotel in any way shape or form- even today- the market is not strong enough to support another downtown hotel- In terms of trying to continue to try to compete by renovating the Patrick Henry – that would be good money chasing bad- The Patrick Henry couldn’t make operating profit much less pay for any additional funds for renovations-it couldn’t pay its investors- downtown could not support another hotel and especially given the unfair playing field with the competitor with infinitely deep pockets- it is like one hand tied behind your back and both legs tied to even try to compete. A few years more went by – more studies- more possible deals with a variety of nonprofit and for profit groups and more disappointments. The plan for the Senior living facility was the only option that ownership was considering and pursuing- no plan B was ever thought of or developed-a big mistake- downtown living was beginning to flourish in the early 2000’s and a case could have been made to develop the Patrick Henry into apartments utilizing Historic Tax credits to offset some of the construction cost and the exit strategy would be to Condo them after the mandatory 5 year hold that the Tax Credit Program requires- but ownership was myopic when it came to what they envisioned- and it didn’t work- the Hotel continued to fall into disrepair and eventually got to the point where all the floors above the 3^rd were closed because of the lack of a viable sprinkler system- the Patrick Henry was on life support with a voice in the background saying “Step into the Light” – Ownership ended up losing everything – including the initial investment – renovation costs and the cost for carrying the operating short falls – I’d estimate it was near 7 million dollars- the cost of competing with a public private partnership-

I left in 2003 - after it became apparent that the Patrick Henry Hotel would not survive- I didn’t want to leave- I and our team had put a lot of hard work and effort into it- it was emotional for all of us- it had become our second home- we cared. But there was nothing more I could do but accept an offer to re-join Marriott Corporation and take on a project in South Boston called the Berry Hill Plantation Resort.-

The Hotel Roanoke has been a fabulous addition to our City- it greatly contributed to the revitalization of downtown and the facility is something the community is proud of and well they should be- I write this essay more to set the record straight as to what happened and why- I recently read a Roanoke Times article chronicling the history of the hotel and the only mention was it fell into disrepair in the early 1990’s – and I felt a history lost- While I disagree some of the business practices of my cousin and his ownership group- I am steadfast in my belief that if the Hotel Roanoke had been renovated and re-opened with only private funds- it would not have come close to penciling out- it could have only worked the way the deal was structured – with soft money and some real deep pockets to carry it through the tough times- The cost was the Patrick Henry - the loss of the private money invested – and quite a bit of emotional equity down the drain - It was a tough lesson learned -