Saturday, October 25, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Billionaire tries to avoid a payment

elias column sig

By
From page A8 | February 16, 2013 |

The old saw tells us that billionaires didn’t get rich by giving away money. But what about paying their fair share?

In California today, we see at least two of the well-publicized super-rich trying hard not to pay sums that amount to pittances for them. One is Charles Munger Jr., attempting to get legal fees paid by his opponents in a lawsuit he entered voluntarily. Munger, who got most of his money the old-fashioned way– his daddy gave it to him – didn’t cotton to anyone trying to overturn the “top-two” primary initiative largely funded by him three years ago.

Now comes the reputed richest man in the world, Mexican tycoon Carlos Slim, who made most of his reported $69 billion to $74 billion fortune via a near-monopoly on telephone service in Mexico. Consumer groups there claim repeatedly that Slim’s land-line and mobile phone companies charge exorbitant rates for substandard service, constantly upping his net worth.

Slim has plenty of interests in this country, too. One is a large minority stake in The New York Times Co. Another is an offshoot of his Mexican mainstay, cellphone service.

Quick now, name the company serving and selling the largest number of pre-paid cellphones in America. It’s not AT&T or Verizon or Sprint Nextel or the German-owned T-Mobile. It’s TracFone Wireless, with 22 million pay-as-you-go customers nationwide and about 4 million in California – fully 42 percent of the pre-paid mobile phone market. Slim owns TracFone, based in Miami, which recently took over Irvine-based Simple Mobile, another prepaid cell provider.

Slim’s U.S. company sells telephones and service mostly to lower-income people whose credit doesn’t qualify them for monthly service plans that are the mainstay of the better-known companies. Customers typically pay about $20 for a phone and 60 minutes of service.

State officials maintain that like the full-service companies, TracFone must pay California’s “universal services fee,” a charge that funds telephone and Internet service for the poor, deaf and disabled, plus residents of the lowest-income rural areas.

Estimates from the state Public Utilities Commission and consumer advocates are that Slim’s company owes somewhere between $13 million and $20 million worth of fees it did not collect from customers but should have in recent years.

The PUC has not yet set a definite amount and TracFone is now in the state Court of Appeals disputing the commission’s finding that it must collect the fee when it sells prepaid phones, even though current law says the fee must be “transparent” and appear on customers’ monthly bills. It has paid the fees under protest since last February.

Some may infer from this that Slim is opposed to the kind of “lifeline” services subsidized by the universal services fee. Not so. TracFone collects similar fees in 28 states and has taken nearly $38 million from other states to provide those kinds of services. “We want a new law in California that lets us collect transparently at the point of sale,” says TracFone general counsel Richard Salzman.

But the company does not want to pay anything for fees it did not collect before last February.

“TracFone has failed to pay its share for programs that make telephone service more affordable for California’s working families and hearing impaired,” Juan Jose Gutierrez, leader of the consumer group Two Countries One Voice, said in a press release. Added Richard Holber, head of the Consumer Federation of California, “We have to make sure that as the market grows, companies like TracFone are not allowed to play by their own rules.”

Salzman responds, “Our phones are specifically exempt under the law as it now stands. One reason is that the fee is charged only on in-state calls, not calls to other states and we have no way to know how the minutes we sell in advance will be used.”

All of which means that no matter how much the utility commission and the courts eventually decide Slim’s company owes, the likelihood is he will resist paying.

This makes it high time for the state Legislature to step in by passing a new law forcing all prepaid cellphone sellers to assess the fee. That would put TracFone and all such companies on notice they must collect the same fees as ordinary cellphone companies or get out of California. Any such law plainly also ought to require those companies to pay any past fees they’ve refused to collect and remit.

Thomas Elias is a California author. Reach him at tdelias@aol.com.

LEAVE A COMMENT

Discussion | 14 comments

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  • G-ManFebruary 15, 2013 - 10:16 am

    Let's not forget friends of Barack..Warren all you can cheat Buffett and Jeffery Imelt..the former owes millions in back taxes..arranges his finances in order to pay anything BUT his "fair share"...the latter whose Company pays little to NO taxes on billions in profits..and as obamas job's Czar monkey does a great job shipping US jobs overseas...and I for one don't care..how much they cheat,connive,evade,avoid taxes..in fact I applaud their efforts...what ruins it for me is when I have to hear them preaching about "doing the right thing"...it's actually the left thing...because people like Buffet Immelt and Bus Boy Barack wouldn't know the "right thing" if it crawled up their legs.

    Reply | Report abusive comment
  • StRFebruary 15, 2013 - 10:40 am

    @ G-Man....So how ya doin my sweetness? It is a small world after all. I know someone that when she was young was introduced to Carlos Slim as a potential bride.

    Reply | Report abusive comment
  • Complicated Financial StuffFebruary 15, 2013 - 11:12 am

    Warren Buffett’s Berkshire Hathaway Inc. agreed to pay 600 million euros ($780 million) to reinsure a book of individual life policies at CaixaBank SA (CABK), Spain’s third-biggest lender.............. CaixaBank will book a one-time 524 million-euro pretax gain from the deal with Berkshire, the Barcelona-based lender said in a filing to regulators in Madrid today. Omaha, Nebraska-based Berkshire will get future profits from the portfolio, which generated premium revenue of 231 million euros last year, according to a spokesman for the bank who asked not to be identified in line with company policy......Berkshire has profited as a source of liquidity during times of crisis, including deals in 2008 to inject $5 billion into Goldman Sachs Group Inc. and assume liability for a portion of coverage written by Swiss Re Ltd. New European regulations and the region’s debt crisis may push some companies to cede risk or raise capital, Greenlight Capital Re Ltd., the reinsurer that counts David Einhorn as its chairman, has said............. “The current problems being caused by the debt crisis and other economic problems, will certainly create opportunities,” Greenlight Re Chief Executive Officer Bart Hedges said on a February conference call. “We think that we’ll be able to find good partners that need capital support.” ............. Spanish banks are raising funds to bolster their balance sheets as they absorb losses from a government-ordered cleanup of their real estate assets. CaixaBank said last month it made 4.41 billion euros of provisions in the first nine months of the year to fully cover the 2.44 billion-euro requirements of a decree from February and 600 million euros of the 2.1 billion euros in charges it needs to make under another decree from May..............

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  • Continued tie in Warren B. to Carlos SlimFebruary 15, 2013 - 11:24 am

    See they the Illuminati use high stakes complicated Banking plays to set up the raid of the physical, tangible assets of coutries. Here the global elite are raiding the assets of the Spainish people....observe...pay attenton here...OK.........(Reuters) - Spain's Caixabank (CABK.MC) said on Tuesday it had sold a property portfolio to Mexico's tycoon Carlos Slim in the latest sign that disposals of distressed assets are starting to pick up in Spain............ Under the deal, Caixabank will sell 439 real estate units to a Spanish subsidiary of Mexico's Inmobiliaria Carso for 428 million euros. The lender will book gross capital gains of 200 million euros ($263.23 million)........... Separately, the Spanish savings bank signed a sale and lease back deal with Inmobiliaria Carso with an option to buy back the property units............. HereInmobiliaria Carso is part of the business empire of Carlos Slim, who already has close business ties with Caixabank......... Caixabank owns 20 percent in the Mexican financial group Inbursa (GFINBURO.MX), controlled by Slim, who in turn is a minority shareholder of the Spanish lender.......... More deals in the property sector or on other portfolios, such as consumer loans, are likely to take place early next year, bankers in Madrid said earlier this week............... All Spanish banks have made provisions for losses on toxic real estate loans or foreclosed properties, which should help them withstand sales of these types of assets at big discounts, which many had so far been resisting............... Popular (POP.MC) sold a 1.14 billion euro ($1.5 billion) portfolio of troubled consumer loans to a consortium of international investors last week with an estimated gross gain of 48 million euros............

    Reply | Report abusive comment
  • Reference for aboveFebruary 15, 2013 - 11:27 am

    google...Rueters...Spain's Caixabank sells property portfolio to Mexico's Slim..MADRID | Tue Dec 18, 2012

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  • Reference for aboveFebruary 15, 2013 - 11:36 am

    google...Bloomberg.....Berkshire to Pay CaixaBank $780 Million in Reinsurer Bet By Noah Buhayar & Charles Penty - Nov 30, 2012 6:20

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  • StRFebruary 15, 2013 - 11:56 am

    The system is not letting me post the last part of the first article which more completes the tie in...? Why will this not post?

    Reply | Report abusive comment
  • Mr. PracticalFebruary 16, 2013 - 3:51 pm

    You've exceeded your limit. You can't post again until June.

    Reply | Report abusive comment
  • Danny BuntinFebruary 16, 2013 - 8:20 pm

    Good one Mr P.

    Reply | Report abusive comment
  • I don't want U 2 feel left out Danny B.February 16, 2013 - 8:37 pm

    Mr. Buttin...Thou art a fawning doghearted coxcomb and forsooth a villainous tardy-gaited apple-john!....You speak unskilfully: or, if your knowledge be more, it is much darkened in your malice.....Thou art the veriest varlet that ever chewed with a tooth......Thou lumpish rude-growing baggage!......This B fun kind of like Mad Libs. PS...and you dress funny! !

    Reply | Report abusive comment
  • I don't want U 2 feel left out Danny B.February 16, 2013 - 8:38 pm

    Mr. Buttin...Thou art a fawning doghearted coxcomb and forsooth a villainous tardy-gaited apple-john!....You speak unskilfully: or, if your knowledge be more, it is much darkened in your malice.....Thou art the veriest varlet that ever chewed with a tooth......Thou lumpish rude-growing baggage!......This B fun kind of like Mad Libs. PS...and you dress funny!

    Reply | Report abusive comment
  • Richard GiddensFebruary 16, 2013 - 8:27 am

    Thomas Elias makes a great New Yorker or Californian but makes a poor South Carolinian or Texan. Its not enough private business creates wealth and jobs---no, more blood must be squeezed from the turnip for Mssrs. Elias and Brown to waste on their welfare state and police state out here in California---a state with 25 trillion dollars worth of shale oil beneath its dumb citizen's feet.

    Reply | Report abusive comment
  • Something tells me this is very interestingFebruary 16, 2013 - 7:59 pm

    I was just looking at stuff about Billionaires...98-years-old Saleh Al Rajhi... Net Worth: $5.8 billion.......... Children: 61 children........... Likely Will Winner: The Islamic family holding corporation............ NOTE: Saudi citizen............. Saleh Al Rajhi isn't royalty, but he might as well be. The Saudi banker is one of several billionaires in the Al Rajhi family, who all work in some function for the family holding company. Saleh has 61 children and 7 wives. We predict his personal fortune will be siphoned into the corporation............... But the CIA will watch his inheritance closely. Al-Rajhi Bank was connected at various times to funding for Al Qaeda. He has also given generously to legitimate charities and Islamic groups through the SAAR Foundation...............

    Reply | Report abusive comment
  • This is interestingFebruary 16, 2013 - 8:19 pm

    Google....The 20 Most Awesome One-Of-A-Kind Billionaire Toys..........Business Insider

    Reply | Report abusive comment
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