Moral Turpitude: The Cement Manufacturer and Rock Miner Hall of Shame ... by gimleteye

We have enough to keep us busy as citizen journalists and bloggers, but every now and then a news report washes in from around the state that remind us we are not alone. Let's take rock mining for cement and cement products as an example. All over Miami-Dade County the conversion of Everglades wetlands and farmland to suburban sprawl has sped along on the rails of zoning changes and federal permits to mine limestone. That fossilized coral reef under our feet in South Florida makes very good base material for cement. Blasting and mining and refining it is a multi-billion dollar industry: the wealthiest and most secretive in Florida. Without cement, there are no roads, buildings, and ambitions to put more growth and development than can possibly float on the Florida peninsula. Rock miners started out as small family businesses in Miami-Dade and elsewhere: they are now mostly large multi-national corporations owned by foreign shareholders. Still, they pay beaucoups dineros to downtown Miami lawyers and lobbyists who wield their power like cudgels in the Neanderthal world of local politics.

In West Dade, rock mining activities have violated federal law protecting endangered species and the Everglades. These violations of law triggered some of the most important litigation in the US, revealing the miserable performance of federal agencies like the US Army Corps of Engineers. Rock miners have not only failed to live up to their commitments for mitigating impacts on wetlands, they have stifled dissent at county commissions and with the public. In Miami-Dade, rock mining has imposed huge liabilities on drinking water supplies and costs on taxpayers. In South Dade, rock mining has sped salt water intrusion. In Palm Beach County, rock mines were the backdrop for a land use deal during the first term of Gov. Jeb Bush that helped push the cost of land acquisition for environmental purposes into the stratosphere, giving heart and hope to land speculators everywhere-- but especially speculators who were Repubican. Rock mines are popping up in the ambitions of Big Sugar to extract further profit from the Everglades. They also, it so happens, provide the backdrop for criminal prosecution and imprisonment of Palm Beach County Commissioners. The cumulative influence of rock miners has suppressed science related to the security of aquifers and encouraged the vast oversupply of roads and suburbs during the late, great building boom that is now in cinders.

So here is the latest on a once Republican (curiously, all rock miners appear to be big Republicans) rock miner lauded in the Tampa Bay area. "Hughes was 77 when he died in June 2008. That fall, Hillsborough County Commissioner Jim Norman suggested honoring the lifelong advocate for development and smaller government by naming the Moral Courage Award for Hughes. Critics protested, saying Hughes bought government support for a pro-growth agenda. In July, after news of Hughes' tax problems broke, his family asked the commission to remove his name from the award. "My father would have been honored yet humbled to have his name associated with the Moral Courage Award," Shea Hughes wrote to Norman. "At the same time, he would not have wanted that association if it caused any dissension, controversy or embarrassment to his family." With these words, the late Ralph Hughes joins the Cement Manufacturer and Rock Miner Hall of Shame. (click "read more" for the full story.)


IRS: Estate owes $300M

By Alexandra Zayas, Times Staff Writer

Published Friday, July 31, 2009

TAMPA — The late Ralph Hughes, a Republican businessman whose name was recently removed from Hillsborough County's Moral Courage Award, died owing almost $300 million in corporate and income taxes and penalties, the IRS said in a complaint filed Thursday.

The IRS also alleges that while his concrete firms were paying no income taxes, they distributed huge sums to shareholders "and/or their controlled companies.''

The concrete businesses transferred more than $61 million to Hughes, who was their director and majority shareholder, according to the suit.

The IRS says those transfers were "fraudulent'' under state law and designed "to hinder, delay or defraud creditors'' of Cast-Crete and Florida Engineered Construction Products Corp., like the IRS.

And the agency says Hughes tried to conceal them.

Hughes' estate has disputed the government's claim, which was filed against Wachovia Bank, which represents the estate.

"My dad paid taxes on every dime he took," Shea Hughes said Friday. "My dad's good name and reputation need to be restored. He never cheated the government, never cheated anybody." The family has tax returns to prove that, he added, noting that his father didn't do the bookkeeping.

Last May, the IRS put Hughes' tax debt at $69.3 million. But it raised the number based on more research, the suit says.

Hughes' construction product companies, Cast-Crete and FECP Corp., did not file federal corporate income tax returns or make any payments from 2003 to 2007, the government says.

For at least four years, the IRS says, it made repeated attempts to get the returns, determine the amount due and collect taxes. It has also requested information and communicated with the companies' president, employees and shareholders, it says.

Now, the IRS says further examination of records holds the companies liable for about $128 million in taxes, $117 million in penalties and $54 million in interest — for a grand total of more than $299 million.

The complaint also says that even though they weren't paying taxes, the companies were distributing essentially all their cash to shareholders and controlled companies. As of March 1, the complaint says, Hughes' companies had only $11 million to pay toward the tax debt.

The companies were rendered insolvent after those transfers, according to the complaint.

Of the $118 million in distributions, Hughes got more than $61 million. The complaint said that "in an apparent effort to conceal the nature and extent of the distributions," he failed to report $27.9 million on his personal income taxes and reported more than $16 million as interest payments by his companies where there was no underlying debt.

Because of the transfers, Hughes is liable for an additional $2.3 million in taxes, $464,000 in penalties and $792,000 in interest, the IRS says.

David H. Simmons, an attorney representing Hughes' beneficiaries, says the estate paid $17 million in taxes a few months ago. He says the numbers being cited by the IRS are incorrect.

"Wholly incorrect," Simmons said. "Completely incorrect. All the taxes have been paid."

Hughes was 77 when he died in June 2008. That fall, Hillsborough County Commissioner Jim Norman suggested honoring the lifelong advocate for development and smaller government by naming the Moral Courage Award for Hughes. Critics protested, saying Hughes bought government support for a pro-growth agenda.

In July, after news of Hughes' tax problems broke, his family asked the commission to remove his name from the award.

"My father would have been honored yet humbled to have his name associated with the Moral Courage Award," Shea Hughes wrote to Norman. "At the same time, he would not have wanted that association if it caused any dissension, controversy or embarrassment to his family."


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