Bloomberg reports misuse of Clinton tax credits
President Bill Clinton
TEXT OF STORY
STEVE CHIOTAKIS: Now, to a federal program that was supposed to solely help revitalize poor and struggling inner city neighborhoods. But the program's also being used however -- frequently -- as financial tool for big corporate developments. We're talking about banks that are investing in hotels and retail centers, not necessarily in the most blighted areas.
In the March issue of Bloomberg Markets magazine, reporter David Dietz explored how the New Markets Tax Credits -- passed by Congress and signed by President Clinton in 2000 -- has been a boon for corporate development.
And David Dietz is with us now. Good morning.
DAVID DIETZ: Good morning.
CHIOTAKIS: How are banks getting their hands on this money to build all this stuff?
DIETZ: Well it's a Treasury Department program that annually hands out $3 to $5 billion, and banks use this money to supposedly invest in poor communities.
CHIOTAKIS: And are they doing that?
DIETZ: We have to acknowledge that there are some good projects, but billions of dollars is going toward things like luxury hotels and office buildings and museums and theaters geared towards an upscale audience.
CHIOTAKIS: Well, the non-profits are also getting some of this money, these tax credits if you will. So what are they saying about this?
DIETZ: Well, a lot of the non-profits don't like what's going on because the intent of the program was to put as much money as possible into truly needy communities. And not downtown commercial cores where a great deal of this money is going.
CHIOTAKIS: Does the Federal government know that these funds are used for purposes other than revitalization of truly impoverished places.
DIETZ: Yes they do. The answer is well, these projects create jobs. And while that's true, you have to ask yourself whether or not that is a result that was intended by the program. I think that jobs are certainly a benefit, you have to ask yourself what kinds of jobs are created and whether those jobs are going to people in needy communities.
CHIOTAKIS: David Dietz, reporter from Bloomberg Markets magazine. David, thank you.
DIETZ: You're welcome. Thank you.