by Jim Scarantino | Apr 20, 2021 | General
“Wow. You people at New Life Church go all out,” said Mike Johnson, who runs Port Townsend’s homeless shelter.
“That’s what Jesus does for us. We just want to spread it around,” replied Melannie Jackson, Executive Pastor of New Life Church as she delivered the days’ hot food and a special treat of “You are Loved,” “You Matter” and “One Day at a Time” cupcakes.
Why do people go out of their way to help the homeless? They don’t know the people they help, who may or may not be responsible for their circumstances in life. Some of the beneficiaries of these acts of kindness may not be the nicest people, or they may be sweethearts simply broken by the weight of a life they cannot shoulder.
The Christian churches that prepare hot meals for residents of the shelter do it because they believe Jesus loves them and wants them to share His love with others.
There are other reasons people help the homeless, other motivations and other agendas. We have a worsening housing affordability and homelessness crisis in Jefferson County that is fast becoming a miniature of Seattle’s situation. More public funds are being chased by groups for building projects, material and salaries. As Christopher Rufo observed in his excellent analysis of Seattle’s example, “Seattle Under Siege,” this creates a perverse incentive: those groups do better when things get worse. Things are getting worse in Seattle, though it annually pours more than $1 billion into the organizations that are supposed to be ending homelessness. That’s nearly $100,000 a year for every homeless individual man, woman and child on Settle’s streets. Yet there are many more people making less than that who are not homeless and hold jobs and build families. They have hard lives, health problems, addictions, and other vulnerabilities. But they have not let themselves or their loved ones join the ranks of the homeless.
Rufo divides the landscape of Seattle’s helpers into four groups. We have the same groups in Jefferson County. I am sure you will associate the names of local activists and officials with each of these categories:
The socialists. “Using homelessness as a symbol of ‘capitalism’s moral failure,’ the socialists hope to build support for their agenda of rent control, public housing, minimum-wage hikes, and punitive corporate taxation.”
The compassion brigades are “the moral crusaders of homelessness policy, the activists who put signs on their lawns that read: ‘In this house, we believe black lives matter, women’s rights are human rights, no human is illegal,’ and so on. They see compassion as the highest virtue; all else must be subordinated to it.”
The homeless-industrial complex are the social service providers who receive the staggering amounts of public funds dedicated to “ending homelessness.” Rufo writes, “When their policy ideas fail to deliver results, they repackage them, write a proposal using the latest buzzwords, and return for more funding. Homelessness might rise or fall, but the leaders of the homeless-industrial complex always get paid….Ultimately, the homeless-industrial complex is a creation of public incentives, constantly on the hunt for bigger contracts.”
The addiction evangelists are “the intellectual heirs of the 1960s counterculture: whereas the beats and hippies rejected bourgeois values but largely confined their efforts to culture—music, literature, photography, and poetry—the addiction evangelists have a more audacious goal: to capture political power and elevate addicts and street people into a protected class. They don’t want society simply to accept their choices; they want society to pay for them.”
Whatever their motivations and methods, whether they get another $100 million or only $1 million, these groups are not producing positive results for Seattle. That city is in a worse crisis every year even though these groups gain more power, influence and resources. None of what they do, Rufo writes, can end homelessness because homelessness is not caused by anything they address as the cause of the problem. It is necessary to quote Rufo at length:
“[T[he reality is that homelessness is a product of disaffiliation. For the past 70 years, sociologists, political scientists, and theologians have documented the slow atomization of society. As family and community bonds weaken, our most vulnerable citizens fall victim to the addiction, mental illness, isolation, poverty, and despair that almost always precipitate the final slide into homelessness. Alice Baum and Donald Burnes, who wrote the definitive book on homelessness in the early 1990s, put it this way:
Homelessness is a condition of disengagement from ordinary society—from family, friends, neighborhood, church, and community. . . . Poor people who have family ties, teenaged mothers who have support systems, mentally ill individuals who are able to maintain social and family relationships, alcoholics who are still connected to their friends and jobs, even drug addicts who manage to remain part of their community do not become homeless. Homelessness occurs when people no longer have relationships; they have drifted into isolation, often running away from the support networks they could count on in the past.”
Missing from the homelessness power and money map Rufo sees in Seattle are churches. They are there, working. They’ve always been at work. But with the annual billion dollars thrown by government at Seattle’s homelessness epidemic, churches seem to have been edged out of the picture, even though what they have to offer may more directly address the forces feeding Seattle’s crises on its streets and public spaces.
It Will Take More Than Cupcakes, or Socks
Food for Port Townsend’s homeless shelter is provided by four or five church groups. They prepare the meals off-site and for the time being just drop it off. There is little more they can do with Covid restrictions in place. The food is set out on tables and residents pretty much help themselves. Before all of the current restrictions, there was more interaction between the Christians and the residents. They made friends, stayed over night, brought residents to church services and classes, took them out for coffee, gave them rides, tried to find answers to their problems. I got to know some of the Shelter’s residents when Marica Reidel, former president of COAST, the coalition of churches supporting the Shelter, invited or brought them to Sunday services.
If what is behind our homelessness crisis is broken people and broken relationships (which comes first?), churches will tell you this is right up God’s alley. Jesus is in the business of fixing brokenness. The Holy Spirit can and will lead people to healing and wholeness.
Those are strange, perhaps offensive statements to many ears, and certainly not the words one hears in the meetings of elected officials or the task forces they have created. We live in a town that is not reluctant to show contempt for Christians and their faith, especially traditional and conservative Christians. One does not have to search long to find local officials mocking Christians on their social media.
But government can’t get it done. Exhibit 1: Seattle.
Our greatest homeless problems seem to be concentrated in the most unchurched cities and areas of this country. That is a reflection of the disaffiliation and disengagement Rufo cites as the driving force in Seattle’s out-of-control homelessness tragedy.
Government, and government-funded programs run by social service agencies, won’t fix the decades of disaffiliation and disengagement that have produced today’s homeless, mental illness and addiction tidal wave. Indeed, as many scholars have shown, government in many ways has created or exacerbated those problems. Vibrant, healthy, sound churches can do much more to address the problem of broken, isolated people than people on government contracts or payrolls.
It would be great if we had a mega-church or even a large church here that could support its own Adult and Teen Challenge Center, a highly successful organization that loudly proclaims its vision of “seeing all people freed from life-controlling issues through the power of Jesus Christ!” The organization has developed a less costly model for areas that cannot support a full residential center, a possibility that may be within reach of our local churches. An energetic Celebrate Recovery program–a Christ-centered 12-step recovery program–is sorely needed in Port Townsend (one has been going in Quilcene for a number of years). Our rural area would be perfect for something like Hope Farms, a residential recovery program for women, many of whom have been victims of rape, sexual abuse, and sex trafficking. These programs work.
The churches behind these programs will insist it is not them producing results. It is God working through them to transform lives. If we truly want to see progress in reducing homelessness and stemming the flow of new recruits to the streets, our secular society needs to put aside its antipathy and respect such statements.
In my limited experience, I’ve seen the benefits of Rescue Missions, a venerable ministry to the homeless operating in many cities. I remember Mark, a young man we found one morning on the loading dock at the back of our church in downtown Albuquerque. He was tweaking terribly. Meth had kept him awake for days. The church brought him in, washed and fed him, gave him some clothes and took him to the Rescue Mission a couple blocks away. I don’t recall exactly how he was enrolled so quickly in their program, but I remember what happened afterwards. He became part of our church family, participated in choir and helped with the weekly feeding of 400 people. The Rescue Mission’s residential program of rigorous Bible study, worship, prayer, life skills training and educational courses was demanding. But it worked. He defeated the streets and worked his way up through an entry level job at a high-rise hotel to be entrusted eventually with the entire operation.
It would be great if we had something like the efforts I’ve described here.
I’ve seen marriages saved, families kept intact, families reunited, children put on the right path, and friendships for life formed in churches. I know of suicides prevented, addictions overcome, and of the lonely and isolated finding a new family that loves them in churches. Government programs don’t and can’t do this. Government doesn’t love. The people you meet in church do because, as Pastor Jackson explained above, they believe Jesus loves them and they want to spread it around.
Revival
Disaffiliation and disengagement have risen as churches have declined. Some churches in the area have dropped their youth and children programs as they’ve failed to attract or keep young families. It may be a revival of healthy, doctrinally sound churches and greater collaboration among the faithful of different denominations that could be the answer to Port Townsend’s growing homelessness, addiction and suicide crises.
Take a look at Seattle. Don’t ever not learn from Seattle. We are still small enough, not yet locked into the errors of that troubled city, that we might still have a chance.
This is not to say government should wrap its arms around churches and fund them. That would be a death embrace. Dependency on government money and the strings that come with it would lead to churches being compromised and losing their truths and power. Look at what European governments have done to churches on that continent. But government can welcome and encourage churches in other ways and pull them more into their discussions and committees. Most churches already have food pantries, homeless outreach and Agape programs–unconditional gifting to help families pay utility bills, rent, buy medicine, etc. They could and should be at the table as respected partners.
Perhaps our small to medium-sized churches could pool resources, or jointly approach one of the national providers of the very successful Christian recovery programs. Or simply come together to buy a car for someone when the cost of the vehicle would exceed the reach of a single congregation.
The excitement about the Port Hadlock Community United Methodist Church welcoming a tiny homes village to its property is a wonderful development. County government showed a willingness to accommodate a unique experiment that did not precisely fit within existing land use regulations. City and county regulations, however, continue to stand in the way of churches doing more. Government could make it possible for churches to provide more services and material support for the homeless by loosening land use regulations. Many Port Townsend churches with large tracts of land are zoned out of doing multi-family or temporary housing. Perhaps a special zoning category for churches/religious organizations could unlock some of that land for very low income and residential recovery program development.
A Fifth Column
Alice Cooper once said that the most radical, rebellious thing he has ever done was become a Christian. Yes, that Alice Cooper.
In a disaffiliating, disengaged society that is producing our rising population of homeless, addicts and the hopeless, a Fifth Column of churches, working behind those enemy lines, sabotaging the forces that push people into despair, building and repairing the bonds that prevent the ups and downs of life from putting someone on the street, this secret weapon may be the only thing that will stem the tide. But it can’t be too secret. It can’t be secret at all.
There’s a lot happening in our local churches already. More is coming. There are many good people here who want to spread the love they profess they know from Jesus Christ. That is the reason they go “all out” for the homeless and others in physical and spiritual need. They’ve watched government try and fail. And it will continue to fail. For government is no substitute for the family and community or the fellowship and friendship of believers that can keep a person afloat in the roughest seas, or pull them out of the water when they are sinking to dark depths below.
(Disclosure: The conversation related at the start of this article came from announcements about the New Life Church homeless ministry. I am a member of that church. I do not intend to suggest that our congregation in any way is doing more or is any better than any other church family. We have much to learn and much, much more to do. Always.)
by Jim Scarantino | Apr 14, 2021 | General
Hooray for the the Port Townsend Main Street Program! Live music downtown is back!
“Buskers on the Block” music series will bring musicians to play instruments and sing on PT’s streets. The series is part of PT Main Street’s “Love Where You Live Campaign.” The music started April 3 with reed instrument musician Jonathan Doyle and will continue through May, depending on weather. Locations will vary between Tyler Plaza, Haller Fountain area and Uptown. Main Street staff will be on hand with cloth masks for those who want them.
The lead photo was taken April 8 of Buck Ellard, a local favorite with an international following. During recent months, his live shows with Rodger “Crash” Bigelow at Mariner’s Cafe in Sequim have been live-streamed and draw viewers from Ireland, Australia and British Columbia. Buck is one of the best, if not the finest male vocalist on the Peninsula. He knows a thousand country songs. He will be back May 15.
April 10 saw “Fun with Key City Players.
Other musicians are scheduled to play as follows:
April 15 Christian Powers will perform an acoustic set of his originals—with elements of psych rock, modern indie and 60s-70s pop, accompanied by a bandmate.
April 17 Christian Powers will perform an acoustic set of his originals—with elements of psych rock, modern indie and 60s-70s pop, accompanied by a bandmate.
April 22 Flugelhorn Phil plays a variety of blues, jazz and soft rock songs (flugelhornphil.com)
April 24 Jack Dwyer is a multi-instrumentalist, singer/songwriter, and teacher based in the Pacific Northwest. Featuring classic and traditional American repertoire as well as original music.
April 29 Jonathan Doyle is saxophonist, clarinetist, jug blower, bass saxophonist, composer, and arranger.
Before Buskers on the Block, a group of musicians, including the author, had been meeting on the Wings Plaza at Tyler and Water every Saturday for the past month to share music. Those gatherings were part of the Freedom Protests against lockdowns.
Here’s video in a Facebook post of April 8’s live music: Facebook post by PT Main Street Program
by Jim Scarantino | Apr 10, 2021 | General
Calls to police are up 38%. Mental health incidents are up 27%. “Simmer on that for a second,” City Manager John Mauro told City Council at its April 5, 2021, business meeting.
But not a question was raised, not a word of concern was uttered from any of the Councilors. Here’s the link to the video of his report (click on “City Manager Report” on the agenda to get there straightaway.)
There are rarely any questions for the City Manager when he includes in his reports to City Council the number of calls for police. At the April 5 meeting he belittled the attitude that Port Townsend places few demands on its police services. We don’t have crime here, seems to be the fantasy held by a good segment of the community. That’s the fantasy reflected in the naive Nhatt Nichols cartoons on the editorial page of The Leader. The reality is, as Mauro stated, there are about 158 calls to police between his reports to Council.
In its report to the City Council, entitled “21st Century Policing” the Port Townsend Police Department tallied an average of 6,411 calls for service for each of the years from 2017 to 2020. A 38% increase equates to an additional 2,436 calls annually for a police force already short on staff, with sometimes one officer responsible for the entire city. The “21st Century Policing” report was submitted at a time when City Council was examining cutting resources to the police department, even perhaps disarming officers, eliminating the school resource officer position and subjecting officers to other restrictions in their ability to protect and serve. (See our coverage here, here and here.) Council, fortunately for the citizens of Port Townsend, backed off. Good thing, as Port Townsend’s police are now needed more than ever in recent history. One may have to go back to the days of “Bloody Townsend” to find comparable levels of crime, substance abuse, addiction and severe social ills in this little town.
The Leader’s police log reporting, which usually selects only quaint incidents, shows a steady uptick of serious crimes, confrontations with transients and mental health crises. Many of the problems are concentrated in neighborhoods around the Fairgrounds where crime has increased tremendously. As reported here in a review of police reports for 2020 to the end of October, all sorts of crimes are being committed in the homeless/transit camp of the Fairgrounds, ranging from assaults to thefts to drug dealing. After our article was published a 20-year old woman was found by the campground manager face down, dead, cold as ice. In addition to the crimes there are the calls every week for one mental health or substance abuse crisis after another.
The latest information from sources in the campgrounds is that four drug dealers are now operating there. Our past information on the drug dealing was accurate. The name we had for the most active dealer turned out to be a friend of the dead woman. Other information passed on to one of the groups attempting to oversee the Fairgrounds included the name of one of the men later arrested for kidnapping and blinding another man against a backdrop of meth usage and dealing.
The Fairgrounds encampment is becoming a permanent feature of Port Townsend’s landscape.
The problems are not restricted to the Fairgrounds and nearby neighborhoods. Crime is up across the community. Even The Leader has been paying attention with front page coverage of incidents like the kidnapping and torture of a Port Townsend man and the invasion of our county by criminals from elsewhere. We are seeing more burglaries. There are more assaults. Mailboxes are no longer safe from theft (one man pilfered the contents of 50 mailboxes before he was caught). There is a growing perception that Port Townsend today is much less safe than it was a year ago.
Meth use is increasing. With the State Supreme Court’s legalization of possession, a tool police once had for getting addicts into some type of care is gone. Problems related to addiction are on the steady rise.
The famous “Port Townsend Vibe” is experiencing cancelling waves of fear, anxiety, anger and helplessness.
City Council is doing nothing. The City’s growing social ills are never on its agenda.
Port Townsend could barely handle its problems before. We have always lacked the resources and commitment from elected officials to address addiction, substance abuse, crime and mental illness. The problems have been dumped on police and ignored. We don’t have crime here. Port Townsend is not Port Angeles. We’re different. We’re better.
Calls to police are up 38% over last year; mental health incidents are up 27%. Simmer on that for a second.
Related: The Real Epidemic in Port Townsend: Addiction
The Violence that Cost Port Townsend a Man Who Saves Lives
Fairgrounds Police Log
by Jim Scarantino | Mar 22, 2021 | General
The Great Reopening! Get Off Your Knees!
The cries of the Worldwide Rally for Freedom were heard in Port Townsend on Saturday, March 20, 2021. About 40 people gathered on the plaza at Tyler and Water Streets without masks, but with musical instruments and songs and greetings on their lips. Others held signs encouraging people to think for themselves and be fully informed about lockdowns, vaccines, and what they say are overstated claims of the lethality of COVID-19.
The gathering was loosely connected to other Rallies for Freedom held in at least 40 countries. See below for links to some of the coverage. A friend from Albuquerque, New Mexico jubilantly informed me that they had over 200 people at their event
“It was fantastic,” said Hannah McFarland, one of the Port Townsend event’s organizers. “This was all word of mouth. We really don’t have an organization. It’s as grassroots as it can get.”
But an organization with the purpose of repeating the Rally for Freedom on a weekly basis is being born. Enough names and contact information were collected that this coming Saturday, March 27, 2021, at 11:30 a.m. the crowd will return to the same location. McFarland is hoping for an even better turnout.
In addition to those rallying on concrete, a Freedom Flotilla was in the waters off shore. One of the mariners came ashore to shake hands.
I participated as one of the musicians. I asked McFarland, a Port Townsend resident for 13 years, “Which is the real Port Townsend? Is it the people jogging by themselves, walking by themselves, biking by themselves and wearing masks, fearful of other human beings? Is it the harsh looks directed at someone walking along Water Street without a mask? Or is it live music performed on the street, with strangers greeting each other, happy to be around other human beings?”
That was a rhetorical question.
“We got multiple, ‘Oh, my gosh, thank yous!” from passerby,” McFarland said. “Or, “‘It’s a relief to see you out here.’ People are just so isolated. [Their] fear of death has been so exploited they stop using their rational mind.”
What are the goals and hopes for weekly Freedom Rallies? “We want to connect with people who have already seen through the misinformation, who have been able to study and learn about the issue for themselves without just accepting the word of big media and the medical establishment. And to others, we want to reach out and share in a loving, kind way what’s really going on. This virus is not as lethal as we’ve been led to believe. Shutdowns and masks are not needed.”
She’s worried the next move will be mandatory vaccine cards that will be required to be in the company of others. In fact, the topic arose at a meeting of the Jefferson County of County Commissioners. “It is extraordinary how people believe all this,” she said.
Port Townsend Free Press has been questioning the lock downs, highlighting the arbitrary and senseless nature of Governor Inslee’s orders–indeed the favoritism evident is many of his decrees, the unnecessary costs imposed on working families, the destruction of small businesses while large companies were never shut down. We’ve reported the good news on mortality rates from the CDC, and published thoughtful, carefully researched articles on the need to know precisely what those “case” numbers mean so we can determine whether infection rates are overstated and consequential fears overblown. We’ve been at it since April 2020. You can find our coverage using this site’s search function.
I will be at this week’s event, again with my guitar, joining other Port Townsend residents in enjoying life, and not being crushed by exaggerated fear. I worry about those gloomy, depressed people walking the Larry Scott Trail alone with masks, or hiking Ft. Worden trails and pulling on a mask when they approach another human at a distance of a quarter mile. Those people who drive alone with windows rolled up and wearing a mask and rubber gloves–I think they embrace the abnormalities of the past year. It gives them an excuse to crawl even deeper inside their own problems. I worry especially about the angry young people who wear their masks like uniforms or badges of conformity. I fear they’re more afraid of the pandemic ending than they are of a virus with a 99.7% survival rate, higher for those very same young people. A Pew study finds the lockdowns have caused “devastating” psychological problems among young people.
Just look at this headline from USA Today: “Why we’re scared for the pandemic to end: It feels strange, the idea of being together in the world again.” People need to see other people being normal. These Freedom Rallies are group therapy for a community that has lost its lighthearted joy, love of freedom and irreverence toward authority. It is past time to remember what it means to challenge the dominant paradigm.
Have we been lied to? Have we not been told the full truth? Has the story kept changing? Have government and “the experts” gotten it wrong? Have people been hurt unnecessarily? Has the suffering not been shared equally, and is there no just reason for those inequities? Are our fundamental freedoms being eroded by the exploitation of fear and acquiescence in authoritarian control? The need to keep asking those questions and seeking answers never ends, except by surrender. So bring on those Rallies for Freedom. We need them desperately.
Here is some of the coverage on Rallies from Freedom around the world. Just click on each highlighted word for the link. Thanks to PTFP contributor Stephen Schumacher for the research, and the photo:
Germany
London
Austrailia
Canada
Texas
Maine
Colorado
by Jim Scarantino | Mar 11, 2021 | Local Businesses
Police raids, asset seizures, SEC cease and desist orders.
Illegal slot machines masquerading as charity fundraising.
A take down by the Mad Max of Wall Street.
Yet another corporate adventure for the “acting” managing director of Bayside Housing and Services, the group Port Townsend City Council wants to get the Cherry Street Project. The City Manager ignored a $1 million cash offer that would have bailed taxpayers out of that mess because he had been directed to deal only with Bayside Housing.
Gary Keister is Bayside’s “acting” manager director. He has held that position for going on two years and basically controls Bayside with his two fellow investors in the Old Alcohol Plant and his wife, who are also Bayside trustees and officers.
I wrote about the red flags surrounding Bayside and the whistleblower complaint from a former employee now being investigated by the Washington Attorney General’s Office. You can read those stories here and here.
Mr. Keister is a convicted felon. He was sentenced to 41 months in federal prison on conviction for 35 counts of bank fraud, four counts of money laundering and one count of conspiracy committed while operating a Tukwila hardware-construction wholesaler from 1986 to 1988. The charges arose from sophisticated manipulation of a network of corporations he controlled and used to defraud First Interstate Bank of $1.2 million. After he was caught and punished, he assembled a new network of interconnected, commonly-controlled corporations. One corporation became his flagship, a sort of hub for all the others. According to an autobiographical promotional profile, that corporation, Wescom Capital, would have begun business while he was still in prison.
I thought I had found all the Gary Keister corporations–about a couple dozen here in Washington. Their purposes range from bio-fuels development to telecommunications to property management to utilities, though none of them seem to have amounted to much. Keister’s profiles claim he ran other corporations, such as an international food processing company. He has also claimed to have owned a commercial fishing fleet. Then I stumbled across another five corporations in Nevada.
Then a former employee tipped me off to one more I had missed. This one was called Washington Station LLC. It was a 2001 joint venture with an Austin, Texas company called BGI, Inc. At the time BGI was a hot penny stock, soaring from pennies to an evaluation more than 500 times higher.
It crashed fast when police in Texas and North Dakota started seizing the illegal slot machines it had placed in VFW and bingo halls. And then the SEC stepped in. But not before Anthony Elgindy blew the whistle. He was known as the “Mad Max of Wall Street.” A boiler room con artist himself, he was an FBI informant and delighted in exposing stock scams, taking down fraudulent corporations and “pump-and-dump” stock schemes while raking in short-selling profits for himself and his followers. In 2001 he set his sights on BGI and turned up Gary Keister.
Keister’s “Wescom,” Elgindy wrote, “is the master of stock promotion.”
“Charity Station”
Founded in 1994, the main product of Austin, Texas-based BGI, Inc. was a phone card dispenser called “Lucky Strike.” In exchange for buying a phone card that allowed only a two-minute call, the purchaser was entitled to participate in a sweepstakes for an instant cash payout.
In 2001 BGI stock hit a 52-week high of $5.14.
But its fortunes were turning sour at the same time management hyped the company. Its 2000 revenue, according to the 10K filed with the Securities and Exchange Commission, plummeted by almost 40%. It had an explanation: competition. And it had a solution: renaming its machines as “Donation Station” and “Charity Station” and promoting them as charity fundraising vehicles.
It also had a big problem: law enforcement considered its machines to be illegal slot machines.
As Elgindy would report, the company assured investors its machines were legal. But the Texas Attorney General disagreed. And so did the North Dakota Supreme Court.
Enter Gary Keister and his Wescom Capital. BGI announced August 13, 2001, that it had hired Wescom Consulting “to aid its expansion in the promotional sweepstakes and prepaid phone card markets. Financial arrangements call for the two companies to share expenses and revenue. Wescom Consulting will target three areas — general management, finances and marketing.”
Wescom Consulting was identified as “a division” of Keister’s Wescom Capital. “”Wescom will give us the operational expertise we need to focus on diversifying our product line and creating strong, sustained revenue,” said BGI’s CEO at the time (he would be gone soon).
The next day, BGI announced a new CFO, who happened to also have been the CFO of Keister’s Wescom Capital. That man, James Sylvester, signed off on Wescom Capital’s 2000 annual report to the Washington Secretary of State as assistant secretary and was identified as a director or officer (his title is not legible on the scanned document).
A couple weeks later, BGI and Wescom Capital announced a joint venture, called Washington Station LLC. “to explore expansion opportunities…for Charity Station.” According to Elgindy, “a source familiar with BGI and its management offered a few more details about the business. He said the Charity Station machines were structured so that for every $1 a customer put in the machine, 72 cents were paid out in prizes, BGI got 45% of the profit, and the charity and location split the remainder. Like the Lucky Strike phone card machine, the Charity Station both looks and acts like a slot machine. As a matter of a fact , according to certain law enforcement officers, the machine is nothing more than a slot machine with a different face.”
The raids started quickly. October 3, police in McAllen, Texas seized 25 machines. According to an article in the McAllen Monitor quoted by Elgindy (but no longer available online), “.. investigators collected evidence in hopes of securing a grand jury indictment on those believed to be behind the scheme. The grand jury will have to evaluate their guilt in connection with five violations that include keeping a gambling venue and possession of a gambling device,” police said. If convicted, the suspects face a maximum penalty of one year in prison. The article continues, “Police said that many were duped into thinking the gambling machines were legal because signs posted in the area said all proceeds went to charity. A poster on the wall called the room a “Donation Station” and said proceeds from the “Charitable Sweepstakes” went to the Department of Texas Veterans of Foreign Wars. Furthermore, “Patrons might have been further confused by forms they saw tacked to the side of the machines, which advertised that tickets for free games could be obtained by writing to Charity Promotions Associates in Austin. However, telephone information operators and officials from the Office of the Texas Secretary of State did not have such an organization listed in their records.”
Then came three raids in New Braunfels, Texas that netted 200 machines. Laredo and Fort Worth police seized 72 Charity Station machines. Bexar County seized 8 machines and nearly $1 million from the company’s bank accounts. Rio Grande City police seized 33 machines. The Texas Attorney General and El Paso police seized 69 Charity Stations.
The Texas Lottery Commission ordered seizure of company funds.
The Securities and Exchange Commission enforcement staff recommended fraud charges. BGI agreed to a cease-and-desist order. It voluntarily delisted its stock. Investors lost everything, but some insiders had cashed out before the stock crashed.
Sylvester was gone as BGI CFO within three months. Keister and Wescom Capital, and the joint venture to promote the Charity Station gambling machines, dropped out of sight.
Elgindy saw it all coming.
The Mad Max of Wall Street
Elgindy had been part of two large boiler room operations taken down by federal authorities. He turned informant and said he had dedicated himself to exposing stock fraud. He bragged that because he had done so much of it, he could spot scams from afar. He also profited off his insight by shorting stocks he exposed.
He developed a huge online following and posted many of his reports at siliconinvestor.com, which is no longer operational. On January 10, 2002 Elgindy announced he had started covering BGI and its illegal slot machine business. He exposed the fact that the favorable industry press on BGI had been a paid plant by a corrupt stock media company, owned by a man with a prison record.
Keister and Wescom turned up on Elgindy’s radar.
“Wescom is the master of stock promotion,” Elgindy wrote. It sounds like he was already familiar with Wescom but I can’t verify that. Elgindy dragged out Keister’s convictions for bank fraud and money laundering. And he claimed that he had found evidence from Hawaii, where Sylvester–the Wescom CFO made BGI’S CFO–had been an accountant. The link to the evidence is no longer operable. According to Elgindy, “that link says he used unethical practices while doing his job.”
Elgindy predicted storm clouds and he was right. BGI stock not only sank, it was delisted. Elgindy’s full report is available by clicking here.
Elgindy after prison, 2010
Elgindy was good at spotting dishonesty because he was himself a crook and remained so until a huge investigation caught him and two corrupt FBI officers. He didn’t escape prison this time. Authorities suspected Elgindy, an Egyptian American born Amir Ibrahim Elgindy, had inside information on the 9/11 attacks. He had issued instructions to liquidate all his holdings just days before the planes hit the Twin Towers. A few years after release from prison he killed himself.
This American Greed episode [click here for transcript] tells the fascinating and troubling story of The Mad Max of Wall Street. Who could ever have imagined that one of his targets would be in talks with the City of Port Townsend to take over the Cherry Street Project?
[This article has been corrected to reflect that Sylvester’s exact title with Wescom Capital is not legible on the scanned 2000 filing with the Washington Secretary of State.]
