Membership Sideblog
- The Marcus Welby of law, by Lance Heisler | Lampe Law Group
July 31, 2010 | 7:45 pmGrowing up in North Dakota during the 50s and 60s, I was privileged to experience something that's all too rare now - the old-fashioned family doctor. "Doc" delivered babies, set broken bones, treated pneumonia, and helped Grandpa with his newfangled hearing aid. Doc knew the community, the families, and the individuals whose basic medical needs he treated from birth through the end of life. Some of you who grew up in that time, and perhaps in smaller communities, may remember a Doc of your own. . . . → Read More: The Marcus Welby of law, by Lance Heisler | Lampe Law Group
- Kitty Mania at the Prairie’s Edge Humane Society, by Sandy Vesledahl
July 28, 2010 | 10:51 pm
Let’s talk about cats, cats and more cats! Why?? Because Prairie’s Edge Humane Society is full of cats and we have many more arriving daily. As of today, there are 44 cats on the adoption floor with more awaiting their surgeries so they are ready for adoption. There are cats in every corner of the shelter who need homes! We are in desperate need of homes for these cats. We cannot emphasize this enough. So we are having a cat sale and we are calling it Kitty Mania ! Kitty Mania is this weekend, beginning Thursday, July . . . → Read More: Kitty Mania at the Prairie’s Edge Humane Society, by Sandy Vesledahl
- On Watermelons and Widgets, by Tom Swift
July 12, 2010 | 11:50 am
The free market does many things well, but we know it does not do everything. Even market fundamentalists concede that the public must build roads, put out fires, police streets, and provide national defense. Most people, at least those to the left of the Tea Party edge of political spectrum, accept that the government must also be involved in education, disaster relief, and health care. That is, certain services must be rendered — necessary services, universal services — whether or not those services are financially profitable. If your house is on fire, you do not have time to . . . → Read More: On Watermelons and Widgets, by Tom Swift
- Vintage Band Festival Contra Dance, by Dan Bergeson
July 12, 2010 | 10:56 am
Okay, so most of the news about the Vintage Band Festival so far has been about the bands. But there’s a number of other events during the weekend. Like the VBF Contra Dance, for instance. The Vintage Band Festival Contra Dance will feature music by The Dodworth Saxhorn Band of Ann Arbor, Michigan and will be led by dance instructor/caller Robin Nelson. Dancing will begin at 8:30 p.m. with a “Grand March” led by 60 costumed members of the 1st Wisconsin Infantry Brigade, followed by a variety of period dances including polkas, contra dances, schottisches, reels and waltzes. . . . → Read More: Vintage Band Festival Contra Dance, by Dan Bergeson
- The Animal-Cruelty Syndrome, by Tom Swift
June 27, 2010 | 8:00 am
Even before I read the first word of this article I had a visceral reaction to it. The accompanying photographs — my eyes tend to skip over photographs in magazines — affected me in a manner that is difficult to articulate. I knew, immediately I knew, I was not going to like what I was about to read. In fact, for that reason I put the piece aside. Not now, I thought. Maybe tomorrow, I said to myself. But, then, I couldn’t not read it, either. If you have not done so already, I hope you will read . . . → Read More: The Animal-Cruelty Syndrome, by Tom Swift
- Puppies! Puppies! Puppies! by Kathy Jasnoch
June 27, 2010 | 7:54 am
June may be Adopt A Cat month here at Prairie’s Edge Humane Society and we have lots of wonderful cats, but we also have PUPPIES! We have a male Newfoundland mix named Chong who is 6 months old, he was a stray so we don’t know a lot about him. He loves to play! We also have three Australian Cattle Dog mixes who are two months old. Marcia, Bobby and Cindy were born at the shelter and spent some time in one of our fabulous foster homes. They are now back at the shelter and ready to find . . . → Read More: Puppies! Puppies! Puppies! by Kathy Jasnoch
- Relay for Life of Rice County, August 6th, Rice County Fairgrounds. By Sandy Vesledahl
June 23, 2010 | 9:35 pm
The American Cancer Society Relay for Life is a life-changing event that gives everyone in communities across the globe a chance to celebrate the lives of people who have battled cancer, remember loved ones lost, and fight back against the disease. At Relay for Life, teams of people camp out at local parks or fairgrounds and take turns walking or running around a track or path. Each team is asked to have a representative on the track at all times during the event. Because cancer never sleeps, Relays are overnight events. Relay for Life of Rice . . . → Read More: Relay for Life of Rice County, August 6th, Rice County Fairgrounds. By Sandy Vesledahl
- Critter Cam live from Prairie’s Edge Humane Society, by Sandy Vesledahl
June 16, 2010 | 9:04 amNow Showing! Live Kittens playing! You can now watch our adoptable animals at Prairie’s Edge Humane Society (PEHS) live 24/7 on the new Critter Cam installed in conjunction with KYMN Radio. Thanks to the fine folks at KYMN radio we now have a live feed of our adoptable animals showing on our website and KYMN’s website, Tim and Jeff are AWESOME! Currently the Critter Cam is featuring kittens available for adoption. Watch them play, sleep, eat, and everything else they do 24 hours a day 7 days a week! It’s better than anything you can see on TV! . . . → Read More: Critter Cam live from Prairie’s Edge Humane Society, by Sandy Vesledahl
- Save the Northfield Depot: fundraising help needed. By Lynn Vincent
June 11, 2010 | 11:34 am
A BIG Thanks to all of you who came to last Monday’s Volunteer Organization Meeting, and to those who contacted us saying you wanted to help but could not make the meeting. We have pretty full support for Communications and Design and Build sub-committees, and we got a web graphic designer to help with the site. Alice Thomas is facilitating the Communications group, and Steve Edwins is facilitating the Design and Build group. What we are missing and really need are Fund Raising people. We have two grant writiers, but we need folks who are committed to the . . . → Read More: Save the Northfield Depot: fundraising help needed. By Lynn Vincent
- Photo albums: 2010 Prairie’s Edge Humane Society Walk for the Animals, by Bridgette Hallcock Photography
June 11, 2010 | 8:09 am
Thank you to all of those who came to Alexander Park on a beautiful Saturday morning in May to help support Prairie’s Edge Humane Society! I have placed all of the fun photographs on my Bridgette Hallcock Photography Facebook page so that everyone can see how much fun we had! See the two 2010 Walk for the Animals albums here and here. If you would like a print, please contact me, as the proceeds will benefit the animals at PEHS.
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Created Crises or Creative Crises? (The “Missing Millions”)
By Ross Currier, on September 21, 2007, 12:16 pm
 The last few months have seen some incredible headlines for Northfield. Heroin Destroys Small Town, Police Chief Takes Leave, Mayor Pushes Too Hard, Church Invades State, City Administrator Criminally Investigated, Council Member Sues Council Member, and Woodley Whoops Threatens Project. Has Dundas’ New Tower Put Madness in Northfield’s Water?
Perhaps it’s more about the presentation of the issues. Maybe these same topics used to be considered news-worthy, important, even of grave concern, but not a crisis screamed out across the top of a story. Could a handful of new hires be shaping the tenor of our community’s discussions to an unusual degree?
The latest apparent crisis seems to be the imminent financial collapse of the City of Northfield, “Millions of City Dollars may be Lost”. I really had trouble believing the situation could be quite so dire. Did $4 million really slip away?
So I conducted by own, independent, investigation. I asked one guy over my conference table and another over his file cabinet about the story. One is a relative newcomer and the other has been here all his life. Both have professional experience with just this type of financial instrument.
They both told me that there is a State Statute, Chapter 118A, governing such investments. Google got it to me in two seconds. The funds must be placed in a firm backed by the Securities Investor Protection Corporation (SIPC). This provides the investor with $500,000 of insurance against malfeasance. Next, it is standard operating procedure to purchase CDs in the amount of $100,000 or less in separate financial institutions covered by the Federal Deposit Insurance Corporation (FDIC). This protects the money invested. Apparently it is typical to either get additional insurance (or, I think, a “Surety Bond”) from a major outfit like Lloyd’s of London or have the CDs fully collateralized by Government Bonds (or, I’m certain, “Treasury Notes”). This is all detailed in Section 118A.03 of the State Statute.
Both of these guys said that although they don’t handle the City of Northfield’s CDs, they have handled or currently handle these transactions for other municipalities. They both said that they were fairly confident that any irregularities from Minnesota State Statute would emerge in the City’s annual audit.
In less than 45 minutes, my slight skepticism turned to substantial doubt. I could be wrong. An hour’s research doesn’t make me an expert, and, after all, we are talking about St. Louis.
Let’s at least use this as an opportunity to show a little business-friendliness. Shopping Local should begin with the City of Northfield. When I lived in Minneapolis, there was an annual ritual of dividing up the business between local banks. I have been told that there are at least a half dozen qualified financial institutions in Northfield who could handle the City’s investments. Let’s bring our money home.
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The last few months have seen some incredible headlines for Northfield. Heroin Destroys Small Town, Police Chief Takes Leave, Mayor Pushes Too Hard, Church Invades State, City Administrator Criminally Investigated, Council Member Sues Council Member, and Woodley Whoops Threatens Project. Has Dundas’ New Tower Put Madness in Northfield’s Water?
but I’d have a hard time during the sabbatical not paying attention to see if that was actually the case. I think the more places in Northfield...
There should have been procedures in place to verify each and every dollar of the cities money each and every time a transaction took place, down to the penny. That is why there is a city staff. At some point, procedures were not followed, or false documents were presented by the firm investing the money, or both.
I have 28 years of experience in business and governmental accounting. My educated guess is that there was a little of both–loose procedures and fraudulent documents.
Also, I would guess that McBride was removing the funds as they matured. Due to the fraud, it was like a house of cards–when you pull out enough of the base, the top tumbles. It appears that the investment firm was claiming the same CD’s for multiple municipalities–there seems to be one particular villain (and a couple of lackeys) who are under scrutiny (and indictment?)
It also shows that the investment firm failed to incorporate procedures to safeguard their clients money. The firm is also liable, but good luck getting any money from them.
I think it is unwise to accuse Northfield staff of ANY wrong doing. Staff would be following the procedures in place (which worked great for many years.) It seems that there was a procedural weakness, which I WOULD criticize the auditors for failing to identify.
It is very difficult to prevent 100% of fraud, but procedures should be in place to identify fraud before it grows to 2.3 million or even more than $100,000. I would be very concerned that auditors did not identify the procedural weakness–but I bet you they have a new procedure they are recommending to all of their other municipal clients. (Auditors do learn to not make the same mistake twice. Something that cannot be claimed by many other professions.)
As to investing all of Northfield’s money in Northfield or Rice County, that is probably not practical. The investment firms place money on a daily basis to maximize return, and that is their responsibility. To restrict the city’s money to one locale would make it difficult to maximize the return, and more likely to repeat a problem by keeping all the eggs in one bank.
Where were the regulators? Probably the same place they were when the sub-prime market exploded and imploded.
Jane : would love to know your POV on this … would it be totally impractical to invest the city’s 100K CDs all with area banks, for the purpose of dollars”working” locally? Or is that just a foolish romantic (?) idea?
Is it just too big a hunk of money to consider anything but the ultimate best return?
Quote: “Field work standards for performance audits require auditors to consider risks of fraud when planning and conducting the audit, to be alert to situations or transactions that could be indicative of fraud and extend audit steps if a potential fraud could significantly affect audit results.”
From http://www.governmentauditors.org/content/view/15/85/
When 4 million bucks go missing one would think that at the very least the auditors should refund any monies they accepted for conducting audits. I would think Northfield should be looking into the auditor’s liability and how their malpractice insurance looks.
David Henson, from the website you identified:
“Finding fraud. Conducting a performance audit in accordance with standards provides reasonable assurance – but no guarantee – that auditors will detect illegal acts or fraud related to the audit objective”
Quit slamming the Northfield auditors. They did not do fraud, and they aren’t going to catch a good con (confidence, not convict.)
They do not guarantee against fraud. Northfield could not afford an audit that guarantees against fraud, as they would have to be present every working day.
Kiffi, I do think it probably impractical to invest all funds locally if you want to maximize investment return. Northfield would probably have to hire one more full-time clerk if they did that (which would be preferable to being ripped-off.)
I am sure all the municipalities scammed by Rate Search, including Northfield, have new, better procedures to confirm the existence of their investments.
Jane – in light of millions missing – I hardly consider my comments “a slam.” I’ve talked to quite a number of connected people about this matter and everyone feels in the dark as to specifics and that the issue is being treated too casually.
Jane. I agree with David who has raised some important questions. Who are the auditots, anyway, and why the sensitivity?
David and Norman:
Auditors are not insureres. They cannot guarantee against fraud. Our society wants to place blame, and the first to get it are the auditors. The auditors are not paid to dig out fraud. For one, cities won’t pay that much, as it requires that you “go fishing” for problems.
I do agree that everyone should know WAY MORE about this problem. The city should be forthcoming and the auditors could explain why they didn’t discover this fraud.
However, as soon as they explain, you will have the public placing blame on the auditors anyway and second guessing the explanation.
This problem would have been avoided if the perpetrator had not committed a crime. How do you expect the auditors to get the guy in St. Louis to not be a crook? It also appears that the crook was not a crook at first, but turned into a crook. How would the auditors know when that happened?
In other words, sometimes the best the auditors can do is identify the loss after it happens–they come in after the fact, not before the transaction. You can’t hold them accountable for what they don’t control.
I would like to know if there were some way they could have identified the problem before it got to 4 million smackers.
Former Mayor Jerry Anderson has a letter in today’s Nfld News, chastising the paper’s recent editorial on the missing millions:
It’s starting to look like this wasn’t a created crises. In the PDF packet agenda for Monday’s Council meeting:
Griff -
Yes, some time ago I realized that it appeared that the three levels of protection that two different financial professionals had described to me had, in this case, been inadequate to protect Northfield taxpayers money.
Suzy Rook and Curt Benson were right, I was wrong.
- Ross
I had lunch today with a former Northfielder who continues to regularly monitor his local investments.
He brought up this topic, remarked that the current citizens didn’t seem as upset as he would have expected, noted that our leaders acted helpless in the face of these modern day James-Younger gangsters, and asked if State of Minnesota resources had been brought in to address both the original cause and current results of the event.
Anyone have an update?
Ross, I’ve got google alerts set for various “Rate Search” related things and nothing has popped up for months. Apparently, the investigation is going slowly–I believe the technical term for the slow pace is “Goodhue Style”.
For those of us with too much time on our hands, here’s a couple of links that did pop up:
Scott Luster from Rate Search at a benefit dinner:
http://64.233.167.104/search?q=cache:St1_ejsgZJwJ:www.bethanyplace.org/photoTemplate.html+%22Scott+Luster%22+Rate+Search&hl=en&ct=clnk&cd=6&gl=us
An order to cease and desist from the State of Missouri:
http://www.sos.mo.gov/securities/orders/AP-08-10.asp
A very sketchy report saying Luster was guilty of theft before Rate Search:
http://www.ripoffreport.com/reports/0/327/RipOff0327322.htm
The last update I received was the three federal agencies (FBI, US Postal Inspector and IRS) had completed their investigation and had turned over all material to the US Attorney’s office in St. Louis. This was some time ago.
Mac -
My lunch companion from yesterday wondered, “Is the State of Minnesota providing any support to Northfield in following up on this matter?”
- Ross
Curt (#62): I’ve been wondering where the money went, and who ended up with it. It especially seemed strange that the city would have to send that much of our money that far out of town to get halfway decent rates. Now it seems downright weird! Thanks for posting the links.
Now I’m wondering who in town first hooked up with these guys, and how high a person would have to be, and on what, to trust them with four million dollars.
The city has been slow to react to the missing millions. According to an article in the Las Vegas Review-Journal, dated Sept. 18, 2007, the Nevada State Bar Association had already filed suit against Rate Search, Inc., for the $300,000 that is was short.
According to a Sept. 26, 2007, article in the St. Louis Daily Record, the American Society of Appraisers had also filed suit against Rate Search in the the St. Louis County Circuit Court. “Watkins, the attorney for Rate Search, said the suits filed by the state bar of Nevada and the American Association of Appraisers are nearing resolution, although the entities may still seek court judgments against the broker, he said.”
So why hasn’t the city filed suit? The general rule on judgment liens is first in time, first in right. By the time our fearless leaders get around to taking legal action, there may not be any meat left on the bones of Rate Search.
Once again, the city government’s incompetence is compounded by inaction.
Kathleen, has the Council ever discussed filing a lawsuit, as Dave Hv suggests?
A number of options have been discussed and are being followed up on. The League of MN Cities is assisting with this. The dilemma is there are so many entities / individuals affected (total losses of $5 million) and it does not appear to be many personal assets to go after.
David Hv. (#66): Hypothetically, and only hypothetically, if it was an inside job (i.e., if some of the guys at city hall were in on the scam, or fear that some of their friends might have been), wouldn’t they want to avoid drawing attention to themselves with a lawsuit?
Scott: Hypothetical thieves would probably be up there throwing mud on the Rate Search guys to distract any attention from themselves.
Collusion is difficult to maintain because there is NO honor among thieves–you can bet that the Rate Search people would be screaming bloody murder if they had some one to blame or drag down with them.
I agree with David–the city’s inaction is inexcusable–if you consider your options too long they will all be gone. Just because there are a lot of victims doesn’t mean you shouldn’t get your name on the list–if everyone who sues recovers 10% of their losses, it is more than they would get if they didn’t sue.
Northfield is willing to spend all kinds of money on all kinds of maybe lawsuits where they have NO chance of recovering any money, such as Roder’s maybe lawsuit for termination when he quit or for a report on whether or not it is legal for them to make an expensive, wasteful decision-but they are not willing to proceed when it will be the ONLY chance of recovering their invested funds. Go figure.
Joel Walinksi had this Rate Search update in last week’s Friday Memo:
[...] City of Northfield’s missing millions are at the heart of the case. A securities firm in St. Louis defrauded customers of more than $4.5 [...]