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Trump’s Plan to Let Big Banks Get a Piece of the Stadium Scam

An administration proposal would treat the financing of sports venues as an investment in low-income communities.

Scott Cunningham/Getty Images

In an age when banks like Wells Fargo actively scam poor people and are gifted multibillion tax breaks many times the size of whatever penalties they may face, it stands to reason that they don’t need an easier way to launder their ill-gotten gains. But ’tis the season of giving!

Because this is a story about financial regulations, please bear with me for a moment as we sift through the necessary jargon: A pair of regulators appointed by President Donald Trump are attempting to overhaul the Community Reinvestment Act, a 1977 bill that was meant to ensure that America’s financial institutions and their governmental regulators were at least nominally trying to serve nonaffluent customers and their communities. Three federal agencies are tasked with holding banks to whatever the current CRA standards are: the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve. The CRA classifies traditionally underserved communities as low- and moderate-income (LMI) neighborhoods, and it is under the guise of helping such neighborhoods that the Trump administration hopes to refocus the scope of the CRA. (OK, you made it.)

Now, among the changes included in its proposal is a particularly vexing update: Under the new CRA, banks would potentially receive lucrative tax breaks for helping to finance sports stadiums, as the Trump administration posits the existence of stadiums uplifts poor communities. The language of the proposal, as first reported by Bloomberg, lists ways banks can meet standards, including: “Investment in a qualified opportunity fund, established to finance improvements to an athletic stadium in an opportunity zone that is also an LMI census tract.”

This is nonsense, but exactly the kind of nonsense you can expect from the increasingly bold sickos currently working throughout the federal government.

There is a well-known and disturbing trend among sports-loving billionaires that’s taken root as various leagues have become Big Business over the last five decades. For years, team owners have constantly sought, and won, easy multimillion-dollar payouts from the state and local governments where they want to place their team.

This has often been obscured, or at least complicated, by the fact that whenever any of the current major sports leagues in the United States choose to expand or relocate a franchise, the process is billed as a lottery or an auction. Which deserving fan base will win the right to call the Raiders their team? Exploiting the desires of normal, sports-interested people and local governments—often in a bipartisan affair—billionaire owners and league lawyers will bargain for increasing sums of public money. Then the league and city will co-announce the deal as if the city’s been awarded a great honor, and not as though it has shelled out crucial public funding to an individual or ownership group that doesn’t actually need any of it and will leave the city with the bill long after it’s moved on.

A recent example comes from North Carolina. Due to the usual reasons—a midsize city hoping to solidify itself as one of the regional anchors—Charlotte has recently made a push for a Major League Soccer team. The Queen City finally secured the bid on Tuesday. In stark contrast to MLS cities like St. Louis and Miami, which at least initially have required private ownership groups to foot the bill for stadium-construction and team-development costs, Charlotte’s Democratic Mayor Vi Lyles unveiled a $110 million tax incentive package that the city drafted without input from the public. (When Katie Peralta, a senior editor at Charlotte Agenda, had the audacity to ask Lyles why the plan to gift a billionaire team owner a nine-figure sum hadn’t first been up for public discussion, Lyles blamed the media.)

The stadium-financing scam isn’t even close to being a new trend: To put this in perspective, the public financed 61 percent of all stadium construction costs between 1909 and 2012. Wealthy owners have long understood how to game local and state tax breaks to enrich themselves and finance their businesses, and stadiums have long existed as a monument to disrupting and displacing the poor. When Brooklyn Dodgers owner Walter O’Malley moved the team to Los Angeles, the new Dodgers Stadium uprooted a thriving Latinx community. The same happened to black residents in Atlanta and Washington, D.C., with the arrival of the Braves and Nationals, respectively.

Likewise, banks have long both ignored and preyed upon poor populations. As former Capital One employee Elena Botella wrote for The New Republic in October, the practice of saddling low-income customers with debt is endemic to the banking industry, part and parcel of a system designed to funnel cash from the economic bottom up to the boardroom.

Outrage over the issue, however, does appear to have become more mainstream over the last decade. Many a blog has been written exploring various bad deals that cities, towns, and counties have made with sports team owners. John Oliver skewered the practice on his HBO show in 2015. And Miami voters even recalled Miami-Dade County Mayor Carlos Alvarez in 2011, following a disastrous stadium deal handed to the city’s MLB team.

What is new, or would be under the proposed CRA changes, is that banks could help a city—and whatever billionaire owner finances the stadium—and then be credited as though this was an actual investment in a low-income community. (In a comment to Bloomberg on the proposal, a spokesperson for the Office of the Comptroller of the Currency, one of the regulatory bodies involved in the process, said, “We encourage comment on any and all aspects of the proposed rule. The proposed list of activities related to opportunity zones are intended to encourage economic growth and jobs in low- and moderate-income areas.”)

The move falls in line with the Trump administration’s economic approach, from the trade war that’s resulted in the federal government propping up the exploitative agriculture industry to the tax cuts that only benefit the wealthy. It’s an almost direct follow to the “opportunity zones” scheme the administration cooked up—a grift claiming to help poor neighborhoods that was actually a massive tax break for developers. The CRA proposal is more of the same, only this time Trump’s NFL-owner fan base could get in on the action. Simply, it’s another offensive in the class war the president is waging on behalf of himself and other rich assholes.  

Before the proposal was made public, it was hard to think of a way to make the stadium grift any more galling. But thanks to that special Trump touch, the nation is somehow now confronting the possibility of a new kind of Jerry Jones–Wells Fargo tag team.