Sources have told MHProNews that Danny Ghorbani, President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR) has once more allegedly made threatening statements directed at our publisher, as Ghorbani’s response to articles and commentaries published that analyze Ghorbani’s written/public statements. Why?
“Our industry needs financing and is facing a number of regulatory challenges, as most Manufactured Housing Industry professionals know.” said L. A. “Tony” Kovach in a statement in his role as the managing member of Lifestyle Factory Homes, LLC, the parent company of MHProNews and its sister operation consulting and contract services affiliates.
In an industry seeking solutions, a few industry members have, using the words of George Allen, “…even agitate decision-makers and trade politicos responsible for the industry’s 15 year malaise...” which when one reads enough of the alleged semi-coded verbiage, is taken to mean Allen’s professional agitation of members of the Manufactured Housing Institute (MHI), the National Communities Council (NCC) or other affiliated trade association organizations.
In a recent pro-Ghorbani blog post, Allen begins by saying, “Finally a Leader! But Who Will Follow?” What makes Ghorbani a leader in George Allen’s eyes? Allen points to a ‘paid ad’ from Ghorbani with a ‘bold agenda.’ Since when does taking out paid advertising make an association executive or a business person a leader?
Where is the track record that Messrs. Allen or Ghorbani can point to that would demonstrate either has the capability to advance such an agenda?
Where are the financial, political or other relationships needed that would allow them to do now, what neither Ghorbani or Allen has not done in the past dozen years?
For those who followed Allen’s writings over the years, it bears noting that in the past Allen blasted Ghorbani on numerous occasions, while extolling some of the same organizations (corporate and association) Allen now lambasts.
As an example, Allen begins the excerpt below by quoting from the July 2011 Journal of Manufactured and Modular Housing, when Allen stated that Danny Ghorbani made the following remark:
“In MHARR’s view, retailers and community – based entities face a clear choice – continued dysfunction and decline, or a change to a new national level industry representation structure to lead the industry back to real prosperity.”
Note the similarity between this call to action by Ghorbani then, to what the MHARR CEO says in his ‘paid ad’ now? The ‘paid ad’ is a downloadable attachment on the end of this article. It makes for good reading, but as one MHIndustry leader stated some days ago, “the devil is in the details.”
But back 3 years ago Allen’s reply to Ghorbani’s assertion then began with the retort, “Huh?” Allen then wrote:
“…First, lumping MHRetailers and landlease community owners/operators together is a big mistake. They’re significantly different business models, hailing from different major segments of the manufactured housing industry and landlease community real estate asset class duo; MHRetailers are akin to the MHIndustry; and landlease community folk to real estate development and investment.”
“Continued dysfunction and decline? Dysfunction? Who?, What?, Where?, When?, Why?, & How? – the ‘Four Ws & H of basic trade and secular journalism’. No really illuminating answers provided in this paragraph or column! And decline? Sure, especially among MHRetailers; again, 90 percent of them are gone, some bought – out by HUD Code home manufacturers, others now contractors, but most ‘out of business’. And LLCommunity folk? In terms of national physical occupancy, yes, we’re slipping. BUT, show me a LLCommunity owner who didn’t overpay for his/her property acquisition (i.e. Didn’t ‘buy on the come’, as in ‘rent increases to come’ – that never did!), and or has paid down their mortgage, and I’ll show you a generally healthy business model that’s frequently selling, even self – financing new and resale homes on – site, to ‘get the rent meter’ a – running and to keep it running….”
“…So, with such flawed writing, and lack of justified logic, in the referenced summary paragraph and column, we’re to run off willy nilly to ‘create or change to a new national level industry representation structure’? I think not – at least not until a far better case is made for considering doing so! And enhancing association executive job security should not be part of making that particular case.”
So there you have it, in Allen’s own words, an ad-paid Allen in 2014 disagreeing with Allen in 2011.
Now Allen is praising the same Ghorbani as a “leader” for sharing similar thoughts in a ‘paid ad,’ when in 2011, Allen was calling Ghorbani a ‘flawed writer’ who used ‘unjustified logic.’
What’s the difference between Allen and Ghorbani then and now? One industry observer told MHProNews,
“The common ground is found in the Arab Maxim, “My enemies enemy is my friend.” Suggesting, a marriage of convince between the two, complete with Allen admittedly accepting “paid adverting” from a Ghorbani-led MHARR.”
Some allege that Allen’s self-admitted agitating actions are precisely how Allen, in his so-called “COBA7 affiliates” or Ghorbani, through MHARR members dues, rail against MHI or those they opt to target: MHI, their ‘big company’ members or perceived allies (including, but not limited to, little company MHProNews), as a means of justifying receiving income from others.
Note that Allen went on a similar path in his Community-Investor blog and his paid Allen Report newsletter, in attacking MHI, as was documented by MHProNews previously, when again using Allen’s own words, he blasted MHI essentially for not buying him out. That full report, with numerous quotes from Allen’s writings, is linked here.
Contrast Allen 3 years ago tilting against MHARR, and saying in part: “(In our case, ‘our conflict’ allows federal legislators to ‘divide & conquer us’, so to speak, when it comes to our effectively confronting onerous legislation – like what’s on the Congressional horizon at present!)...” meaning, Allen in 2011 decried the disunity in DC between MHARR and MHI as being harmful to the industry. In that statement, Allen echoes the sentiments shared by a recent Industry Voices OpEd, linked here. Yet Allen, we are told, has allegedly chastised that writer.
But who is the one who has flip-flopped, and why?
Selling Red Herrings?
“These agitating voices point their fingers at MHI – us, or others – and allegedly and essentially say, ‘look how they fail to protect you. And don’t forget to send us your cash, check or credit card ok’s so we can keep telling you how bad those others are.’…
“But IMHO and as others also allege, one of many problems is they fail to provide a balanced report, or they take some information out of context or get it completely wrong. Furthermore, why don’t they show any results of their own? Yet they boldly ask others to send them a check. Does it sound like someone is selling red herrings?” Kovach quipped.
Google defines a red herring:
1. a dried smoked herring, which is turned red by the smoke.
2.something, esp. a clue, that is or is intended to be misleading or distracting.
“the book is fast-paced, exciting, and full of red herrings”
Ghorbani’s “Oops” over the Pam Danner, HUD Career Administrator Appointment?
Part of the recent controversy is about the appointment of Pam Danner as HUD’s Career Administrator for their Manufactured Housing program. A non-association source with ties to the federal government sent MHProNews this comment about Ghorbani’s message to Danner and HUD.
“…Congress changed the law. It’s in the current budget act that HUD can now hire the Administrator as a career position. This is typical of the way Danny misrepresents things. He gets away with it because most of the people who read his letter bombs don’t know any better.”
That statement was verified by another party who told MHProNews that the budget act passed last December 2013 contained the Congressional change, making the HUD MH position a career vs. non-career appointment. Ghorbani’s MHARR release on the subject is linked here. Why does it not reflect that fact?
It should also be noted that sources at MHI tell us that their staff and finance members have meet with key players in the Senate on GSE reform. Sources tell us that a report on that is expected at the “proper time.”
So the MHARR messages that imply that MHI is not “at the table” are not only inaccurate, MHI has personally engaged with seasoned finance and government relations professionals, while what MHARR has done is send a memo drafted by those who have little or no experience in financial matters.
Which approach might benefit the MH industry most?
“If it wasn’t so sad, it would be funny, wouldn’t it?” Kovach asked, adding “Will Danny look up the new law, realize the error and apologize to Pam Danner, HUD, MHI and all in the industry for yet another fact error before launching into his attack? Will he apologize to MHI for saying that they’ve not been at the table, when in fact they were the only ones from the industry present in a Senate Banking meeting? When will Danny learn to ask questions first, and get the facts before sounding off? Or doesn’t his pattern reflect badly on himself and MHARR?”
The Right to do Wrong?
“Its America. People have the right to sell information or a service; I guess, even the right to sell a service that provides few if any measurable results…” Kovach commented.
“But doesn’t this go beyond just burning money on so-called information or services that turn out to allegedly be self-serving vehicles that benefit those who use their bully pulpits, yet produce no measurable results? Doesn’t this in fact cost the industry’s business people their hard earned dollars too? Doesn’t a lack of unity on key issues cost retailers, communities, manufacturers, suppliers and others? Isn’t that what Allen himself argued in 2011?”
“This is why the Rand OpEd is so important.” Kovach continued. “It is a wake up call for all involved.”
“We have repeatedly offered to Danny Ghorbani, M. Mark Weiss – MHARR’s legal counsel – and the MHARR Chairman the opportunity to respond, answer questions or clear up the record on any point. As of this time, they have not done so, at least not directly to us.” Kovach said. “In fact, we have a reply from M. Mark Weiss which was followed up by a written demand that their reply not be published. Why did he reply on MHARR’s behalf at all, if they give an answer they don’t want us to publish?”
“We have evidence that they have instead replied to others, contacted one or more operations our parent operation has a contractual relationship with and have made emailed and other statements that support this allegation.” Kovach said in his role as managing member of a limited liability company. Are they attempting to influence others who have contracts with our parent company?”
Mr. Ghorbani is said to have contacted industry publishers and commentators, to run the ad which George F. Allen has said on his blog was ‘paid advertising.’
The MHARR ad came out before and after a series of public comments by Ghorbani as MHARR CEO that allegedly were aimed at the Manufactured Housing Institute (MHI) and at various times, MHProNews. This has been done by Ghorbani, Allen, and recently, a known ally of Allen’s, Michael Power on LinkedIn (see screen capture, attached below).
Sources say Ghorbani has contacted individuals with connections to operations which have contractual relationships with Lifestyle Factory Homes, LLC, the parent company to MHProNews and its related consulting and contract services operations.
“We have covered the tactics of these various individuals before.” Kovach stated. “In Allen’s own words, in a recent blog post, he called himself an ‘agitator.’ This arguably is interestingly accurate. Please see the report we did on him previously,” linked here. It should be noted that some observers opined that for some months after the linked report was published, Allen became quieter in his agitation.
“Unlike Ken Rishel, who published my letter in response to what we saw as a questionable commentary in his emailed PDF newsletter, George Allen has not published a letter in response to a post to which Allen invited Industry Commentary.” Kovach said. “That letter to Allen and his readers are also a download at the end of this column…”
“What are these fellows hiding from their followers and paid supporters?”
When asked about the renewed threat of legal action, which MHARR’s CEO and their Vice-President has been documented to having made against Tony Kovach and MHProNews previously, Kovach replied. “Would it be a surprise to anyone if we have sought legal counsel on matters related to these topics?” said Lifestyle Factory Homes, LLC’s managing member.
A number of legal references were provided for general public understanding, shown below, while specific legal advice on these related issues are being held at this time.
MHProNews was given the following reference from the dictionary.findlaw.com website:
false statement n
: a statement that is known or believed by its maker to be incorrect or untrue and is made esp. with intent to deceive or mislead [submitted a false statement to obtain the loan]
: the federal crime of concealing a material fact, making a false statement, or using documents known to be falsified see also exculpatory no doctrine compare perjury –
And from legal-dictionary.thefreedictionary.com:
Joint and Several Liability
A designation of liability by which members of a group are either individually or mutually responsible to a party in whose favor a judgment has been awarded.
Joint and several liability is a form of liability that is used in civil cases where two or more people are found liable for damages. The winning plaintiff in such a case may collect the entire judgment from any one of the parties, or from any and all of the parties in various amounts until the judgment is paid in full. In other words, if any of the defendants do not have enough money or assets to pay an equal share of the award, the other defendants must make up the difference.
Defendants in a civil suit can be held jointly and severally liable only if their concurrent acts brought about the harm to the plaintiff. The acts of the defendants do not have to be simultaneous: they must simply contribute to the same event. For example, assume that an electrician negligently installs an electrical line. Years later, another electrician inspects the line and approves it. When the plaintiff is subsequently injured by a short circuit in the line, the plaintiff may sue both electricians and hold them jointly and severally liable.
Piercing the Corporate Veil
The phrase piercing the corporate veil is used to describe the action of a court to hold corporate shareholders personally liable for the debts and liabilities of a corporation.
Corporations are separate entities from their shareholders and in normal circumstances, if a corporation is sued, the individual shareholders and officers cannot be brought into the lawsuit. But there are cases in which the corporation’s officers and shareholders could be sued for negligence or for debts; the action of bringing in these shareholders to be sued is called “piercing the corporate veil” or “lifting the corporate veil.”
Two instances in which the corporate veil might be pierced by the court, allowing shareholders to be sued:
In the case of fraud, in which the corporation was found to be a sham that was set up for the purpose of carrying on fraudulent deals or for fraudulent purposes.
In the case of egregious and willful activity by corporate shareholders or officers which put corporate gain over public good.
MHProNews was also given the following reference from the law.Cornell.edu website:
Tortious interference is a common law tort allowing a claim for damages against a defendant who wrongfully interferes with the plaintiff’s contractual or business relationships.
And from: http://en.wikipedia.org/wiki/Tortious_interference
“Tortious interference with contract rights can occur where the tortfeasor convinces a party to breach the contract against the plaintiff, or where the tortfeasor disrupts the ability of one party to perform his obligations under the contract, thereby preventing the plaintiff from receiving the performance promised. The classic example of this tort occurs when one party induces another party to breach a contract with a third party, in circumstances where the first party has no privilege to act as it does and acts with knowledge of the existence of the contract. Such conduct is termed tortious inducement of breach of contract.”
Giving Space between MHARR members and their CEO?
“On the one hand,” Kovach continued, “we have repeatedly made the point in private to certain people associated with MHARR member companies that we respect them and other independent business people in our industry. We have at times editorially sided with some of MHARR’s positions, such as the fire sprinkler issue, vs. the position that MHI took on the same topic…”
“When Fairmont Homes provided the RV MH Hall of Fame with a display model, we showcased that effort. The point is we have proven our balanced reporting and commentary, have made it clear we have no animus towards MHARR members and routinely offer Ghorbani or those with him at MHARR to respond on our pages. If they fail to do so, that is their sole responsibility, as it is their free will choice…”
“What we don’t agree with are the alleged tactics of their CEO and some of their alleged allies of convenience. As a pro-MH Industry trade publisher we have cited others in articles we will link who have voiced their concerns about Danny Ghorbani too…”
“To rephrase, we have tried to show the daylight between MHARR members and Ghorbani…”
“What the Rand OpEd has done is suggest the clear ties of MHARR’s member dues to Danny and his published and/or emailed missives. Mr. Rand also deserves credit for pointing out the obvious fact that MHI is advancing the ball via both regulatory relief and legislative action. He also asked the question, is MHARR still relevant if they are not needed to help MHI get the job done in DC?” Kovach said. “Fair questions!”
“We have to evaluate the potential damages, time and hassle factor of the various threats and misstatements made by Ghorbani, Allen, Power or others. MHI or members of MHI may or may not opt to do so on their part as well. Clearly, if they (MHARR’s CEO and/or VP) act, then we will be left with little choice but to counter-claim…”
MHARR’s 2013 990
“The MHARR 990 is not a simple document, and we would encourage industry pros who decide to read it for themselves and get a proper understanding of how to discern it. This is public record, which we asked repeatedly that Danny and Mark to produce for us, as the law provides. They did not, so we obtained it in other ways…”
“What the 2013 MHARR 990 shows in part is that Danny Ghorbani was paid $290,500 in 2013, and was the sole employee of MHARR. It also shows dues revenues of some $477,360. This begs several questions…”
If Mark Weiss gets paid just shy of 100k, and one figures in travel, office, phones, internet and other expenses, what is left from the MHARR budget?
What is the relationship between Mark Weiss, who shows his title as Vice-President of MHARR, when he is not listed as an employee of MHARR on the form 990?
Given a budget with little-to-no apparent wiggle room, how do they actually hope to influence federal policy and legislators? Mainly by email or written statements? Through paid ads? How is that going to work for the Industry?
- When their CEO can’t work in common with others within our industry, when their response to a disagreement is to threaten to sue, as they did with us, how can they hope to accomplish their mission that the 990 filing says is to .”..improve relations…”?
The MHARR 990 for 2013 is attached as a download below.
“Beyond writing emails, publishing comments and emailed communiques like those dozens linked here, what can they point to in the last 5 years of substance that they have accomplished? When Danny rails against HUD, or rails against other FEDs, or rails against MHI…what has it achieved? What is the result of all the demands, position papers and tough talk? Where is their annual MHARR score card of accomplishments, that some other associations freely provide?”
“We’ve asked Danny Ghorbani and M. Mark Weiss at MHARR for their accomplishments in their own words. If they won’t give one, why not? Wouldn’t they want to sound off on the largest trade media platform how great their work has been?”
By contrast, MHProNews‘ publisher has made trips to Washington DC and did follow ups which resulted in Congressman Adam Kinzinger signing onto HR 1779 and more recently with Senator Marco Rubio co-sponsoring S. 1828. What has Ghorbani, Allen or their alleged allies-of-convenience shown the industry that they can point to in the way of practical results?
“This is America. MHARR members can pay who they want, as much as they want, and those employee(s) and/or contractors of MHARR can do as little or as much as they want for their pay. Allen can make a living ‘agitating’ as he himself describes it, against MHI. They all have that right…” Kovach stated.
“But they should also realize that they are responsible for the actions or inactions of their president, and Allen is responsible for his deeds, or lack thereof…”
“But what ought to be on the minds of the MHARR board is this. What if the MHARR president has crossed one or more lines? What if their president – personally or in concert with others – puts them into potentially costly, or no win legal battles? What if their president’s words costs them retail or community customers who buy homes from MHARR plants?”
And does MHARR’s CEO or his alleged ‘my enemy’s enemy is my friend’ allies want commentary, documents and insights from federal officials and industry members from across the spectrum that demonstrates the pattern of activity in ever clearer detail to be revealed?
“Danny himself provided us in the past with some information that would not be considered good news among some key MHARR members…” Kovach says.
Airing Dirty Laundry?
“Some have asked, why should we air this ‘dirty laundry’ in public? My reply is simple. These others are allegedly the ones that put out the false or inaccurate statements, which FEDs and industry members receive. Doesn’t someone have to set the record straight? Isn’t that what a real trade journal does, analyze and comment?” Kovach queried.
MHI has opted to ignore MHARR for the last two years, the prior MHI president – Thayer Long – did sound off about MHARR in ways that the current administration at MHI has decided to avoid.
The powers that be at MHI tell MHProNews off the record that they want to stay focused on advancing HR 1779, S 1828, on engagement with CFPB, HUD and other regulators. They feel they have to stay focused on GSE reform in a fashion that truly can make a difference. They tell MHProNews privately they don’t have time for Danny Ghorbani’s or George Allen’s emailed, published and posted missives.
Manufactured Housing – We are not Alone
Kovach also pointed to the exclusive article from David Stevens, CEO and Presdient of the Mortgage Bankers Association, “Some voices want to unfairly characterize MHI as being asleep at the switch on Dodd-Frank, SAFE Act or other items…”
“The truth is that far larger lobbying groups than our MH Industry were unable to stop some of the regulatory burdens administrated by the CFPB. Look at community bankers, for example, some of whom are closing due to regulatory burdens they say can’t be met. MH is not alone…”
“Then combine that with insights from Bill Matchneer – previously with HUD and the CFPB – and his “Inside the Beltway” look at our industry’s issues. We have painted the picture of why we are where we are, not opinions, but facts from professionals across the spectrum who know. Don’t the facts, once seen and understood, belie the false allegations of those who ‘agitate’ and stir the pot, allegedly to get paid for stirring the pot?”
Or as a commentator quoted in Manufactured Housing’s Pogo, said:
“Isn’t it amazing how many thousands of peoples’ lives in this industry have been upended by the unwillingness of so few people to get along?” – See more at: http://mhmarketingsalesmanagement.com/blogs/tonykovach/manufactured-housings-pogo/#sthash.TunAPqoS.dpuf
The End Game or Solution?
One of the off-the-record statements that came into MHProNews from a sensitive source, said as follows about Rand’s OpEd:
“I would think if enough Retailers were to start quoting the writers last paragraph in public venues on multiple occasions, the independent manufacturers would start looking at Danny’s strategy a little differently.
As a manufacturer I would be very concerned if this is the strategy that a majority of Retailers suggest utilizing to stop this controversy.” ##
(Image credits: FlickrCreativeCommons, Wikicommons, LinkedIn and MHProNews)
Downloads and Attachments:
Some Related Story Links:
- MHARR’s Mission…”Improve Relations…” – Industry in Focus Report.
- A View of Manufactured Housing Finance Issues from Inside the Washington DC Beltway – Bill Matchneer
- State of the Industry – Affordability is the Key to Housing Recovery – Dave Stevens, CEO of the MBA