The Iron Triangle and its role in the Berkshire moat in manufactured housing will be unpacked step-by-step in this news/analysis. An industry insider with obvious ties to the Manufactured Housing Institute (MHI) sent the following message: “One of the most basic rules of advocacy — never make assumptions against your own interests.” Attached with that comment to MHProNews was a copy of the MHI letter signed by “Lesli Gooch, Ph.D. Chief Executive Officer” or CEO of MHI to “Mr. Clinton Jones, General Counsel, Federal Housing Finance Agency” with regards to “Advanced Notice of Rulemaking – Enterprise Housing Goals (RIN 2590-AB12).” The purpose of those comments is supposed to be obtaining more financing for HUD Code manufactured homes. There have been federal mandates which include those mandated by law in the Housing and Economic Recovery Act (HERA) of 2008.
Which begs the question. Why is Gooch – who Fannie Mae pumped her up as the “Wonder Women of Housing” advocacy (see further below) presiding over the second full year of production and shipment declines in HUD Code manufactured homes? What kind of “wonder” is that, during an affordable housing crisis which is witnessing red-hot sales in far more expensive conventional housing resales or even costlier new conventional home construction?
Another insider message stated that Gooch’s letter – see it attached below, and formally made on behalf of MHI – once more undermining HUD Code manufactured homes? Why are they giving so much effort to their clearly failed “CrossModTM homes” project? How does the “Wonder Women of Housing” explain that their own focus groups and research have both been proven wrong and wrong again?
Wonder how that works?
That push for Berkshire Hathaway owned Clayton Homes supported CrossModTM, per several industry sources that includes MHI’s own members, is not prudent advocacy either. It is arguably either “lunacy or betrayal” – said an electronic message to MHProNews that is arguably designed to harm independent producers, retailers and others – including consumers – while benefiting MHI’s so-called big three. Source once more confirmed there is no traction on the CrossModTM. Wonder why are they are pushing on a failed program? If common sense reigned, why are they not pushing instead for ALL HUD Code manufactured homes, as the laws on the federal books already require?
Wonder, wonder, wonder…Woman
How these pointed claims against Gooch may be understood based on evidence and common sense will follow. So too will the entire contents of Gooch’s “meandering missive” to Clinton Jones at FHFA and how this “posturing” connects to the Iron Triangle.
Another insider noted to MHProNews that there is nothing new in the MHI email.
More specifically, that source said there is “nothing she [Gooch] didn’t already state verbally during the [recent FHFA] “listening” session.” Gooch’s listening session comments were previously reported at the link below.
- For those lacking a smart phone, calendar, or other modern time-keeping method, the year is 2021.
- HERA and the Duty to Serve (DTS) Manufactured Housing passed in 2008.
- Wonder Woman – what has what happened at MHI during the last 12-13 years? How many letters like the latest one have been written?
Over a dozen years have gone by – and FHFA has not yet enforced the mandated intention of Congress for the mortgage financing enterprise giants of Fannie Mae and Freddie Mac? How does that make Gooch the “Wonder Women of Housing” – or are mainstream conventional housing sources praising her because conventional housing interests are thrilled how Gooch has subverted her own industry on Berkshire Hathaway’s and their allies behalf?
Who is trying to fool whom? And for do you wonder for what reasons and motivations? The investigators question applies. Cui bono? Who is benefiting? The reverse also should be asked. Who is being harmed by this decade plus pattern of MHI leadership’s failure to deliver on existing laws?
This news-analysis and commentary will take a fresh look at some of the players, Gooch’s memo to Clinton Jones at FHFA and more attached and linked information.
To understand how these elements play into the Iron Triangle, details about Clinton Jones and Lesli Gooch are necessary.
The Iron Triangle will be more formally defined and then applied further below.
About Clinton Jones, J.D.
Per a download from the FHFA website, “Clinton Jones is the Senior Advisor for Legal Affairs and Policy to FHFA Director Mark Calabria. Prior to joining FHFA, Jones was a senior staff member of the U.S. House of Representatives’ Committee on Financial Services. There, he served in various positions, including General Counsel and Senior Counsel for Housing and Insurance over a 24-year period. Jones was also a Vice President at Fannie Mae and prior to that served as an Attorney Advisor for the U.S. Department of Housing and Urban Development. He is currently an adjunct faculty member at Howard University. Jones received his J.D. and Masters in City & Regional Planning and Bachelor of Science degrees from the University of North Carolina at Chapel Hill.”
About Lesli Elaine McCollum Gooch
Ballotpedia provides some biographical information from 2014 which gives us useful historic insights on Ms. Gooch.
“Lesli Elaine McCollum Gooch was a 2014 Republican candidate who sought election to the U.S. House to represent the 31st Congressional District of California. She is currently the senior policy director to retiring Rep. Gary Miller.”
Gooch served as an intern for the Clerk of the United States Supreme Court while in college. She then earned her Ph.D. in political science from the Carl Albert Congressional Research and Studies Center at the University of Oklahoma. She is currently the policy director for retiring Rep. Gary Miller.
In a sizable field of candidates, Gooch came in third in her failed 2014 race. Ballotpedia said it like this: “Gooch ran in the 2014 election for the U.S. House to represent California’s 31st District. Gooch was defeated in the blanket primary on June 3, 2014.”
Failure is not necessarily a shameful thing, so long as useful lessons are learned and applied.
Additionally, prior to her being made CEO of MHI, Freddie Mac’s Rural Housing Symposium provided this bio of Ms. Gooch.
“Dr. Lesli Gooch is the Executive Vice President of Advocacy and Communications for MHI. She leads MHI’s advocacy and communications team and the work they do in Washington is crucial for the success of the manufactured housing industry. In the five years she has served at MHI, Dr. Gooch has assembled a strong bipartisan team that under her leadership has secured a number of key legislative and regulatory accomplishments.
Dr. Gooch joined MHI after serving across a variety of vantage points in Washington – including as a congressional staff member, congressional candidate, lobbyist, and political scientist focused on Congress. Well-respected on both sides of the aisle, Dr. Gooch is known for her ability to successfully execute policy and political goals. She currently serves on the Freddie Mac Affordable Housing Advisory Council. She was named in M Report’s “Wonder Women of Housing” as one of the top females impacting the housing industry.
Dr. Gooch has a Ph.D. in Political Science from the Carl Albert Congressional Research and Studies Center at the University of Oklahoma. Her dissertation, When Politics is Personal: The Role of Personal Policy Interests in Legislative Activity, was based on interviews she conducted with more than 60 members of the U.S. House of Representatives and explores the motivations of members in selecting issues to champion in Congress.”
There is no objective person that could reasonably say that Gooch lacks useful experiences or education. For clarity, we are not mocking the “Wonder Women of Housing.” Nor is MHProNews mocking those who put and kept her in place – or who oddly praised her wonder-ful performance – despite years of failure.
More appropriately, we are unpacking why and how this Iron Triangle system works in the manufactured housing field and the purported Berkshire moat in manufactured housing. Because, as noted above, books, reports, videos, and articles have been done on the Iron Triangle. Why has this insight not yet been applied to manufactured housing by others besides us is worth wondering about too.
At about 2:22 in the video above the Khan Academy points out that if the bureaucracy
are not as gung ho on the laws they are administering, they might drag their feet.
Let’s examine these two personalities in more detail, based on their own and/or their apparent Iron Triangle allies, in order to and see how they may relate to the so-called Iron Triangle of Washington, D.C. politics, regulations, and money.
Clinton Jones, J.D.:
- Clinton Jones reports directly to FHFA Mark Calabria.
- Jones bio says he “was a senior staff member of the U.S. House of Representatives’ Committee on Financial Services.”
- Financial Services is one of the powerhouse committees in the House when it comes to housing, which does not get sold in volume without robust access to financing.
- Jones served in various positions at the Financial Services Committee, including General Counsel and Senior Counsel for Housing and Insurance over a 24-year period.
- Jones was also a Vice President at Fannie Mae.
- Jones served as an Attorney Advisor for the U.S. Department of Housing and Urban Development.
- He is currently an adjunct faculty member at Howard University. Jones received his J.D. and Masters in City & Regional Planning.
Rephrased, Jones has extensive experience with several of the key players needed by any authentic manufactured housing advocate to accomplish the broad interests of independent HUD Code manufactured home professionals, affordable housing supporters, and potentially millions of possible consumers seek new or refinancing options for modern manufactured homes. Isn’t it fair to say that if Jones wanted to see manufactured housing advance, he has had roles that for years allowed him to do so?
Hold that thought.
Then, there is the “Wonder Woman of Housing” – “Dr. Gooch.”
- “Lesli Gooch is [then was] the Executive Vice President of Advocacy and Communications for MHI.” In fairness, this is from the Freddie Mac website, which is one of the two Government Sponsored Enterprises (GSEs) that the DTS mandate from HERA 2008 applies to – they have an interest in this person. Note too, as MHProNews has documented, that both Fannie and Freddie paid MHI to co-sponsor MHI events.
- Oddly, after Fannie touts her being “M Report’s “Wonder Women of Housing” as one of the top females impacting the housing industry,” and saying how Gooch “secured a number of key legislative and regulatory accomplishments,” there is not a single accomplishment listed. Why not? Is the list too long? Is her wonder too dazzling for mere mortal eyes? Or was the flowery language used to cover up a lack of accomplishments for anyone other than moat builders in manufactured housing? Hold those questions, and let’s press on.
- “Gooch has assembled a strong bipartisan team that under her leadership has secured a number of key legislative and regulatory accomplishments.” More tall talk, still no list of actual accomplishments.
- As MHProNews has previously reported, Gooch has a proven ability for her keen role in handing out MHI PAC checks, and getting video or photo opportunities (photo ops) with key people in Washington, D.C.
- But beyond photos and handing out checks that may be useful in getting questions asked in hearings that MHI then regurgitates to their trusting members in emails that are not posted on their own website. Those trusting members are often the targets for acquisitions and/or elimination by those larger members who grasp the moat-building and iron triangle games.
Here is a collage of Jim Gray’s LinkedIn profile. We are using it to illustrate his purported foot-dragging role in the Iron Triangle too.
We at MHProNews are deliberately not calling out specific lawmakers at this time for tactical reasons. But once they are contacted, if there is a failure to act in an appropriate and timely fashion, then a MHProNews follow up to this report may add examples of lawmakers and/or legislative staff that have been duly informed but failed to act.
The Case For Consumers and Independent’s Sabotage and Betrayal
As a disclosure, this writer was an independent retailer for years and profitably sold the business well before the crazy days around and after 2000. I had years of experience working with lenders and producers. In time, as a manufactured home land-lease community management professional who was widely applauded by those I worked with and for, which was followed by professional consulting that continues. That is said not to brag, but to explain that I should have realized sooner what was occurring in our profession. After all, among the things I learned to do is spot corruption in a business. I could embarrass (but won’t today) still well known companies that suffered due to internal corruption.
The point in part is – beyond disclosure – is that the players in this manufactured housing Iron Triangle have done a reasonably good job of posturing for years. For those who may read this and suddenly have their own “aha!” moment of the light bulb going off over your head, join the club. I had people that in their own words told me that the system was rigged, but I thought they might be mistaken. They were right. I was wrong.
Following that understanding, the next step was to document what was occurring. Or to go back in time and look with fresh eyes why something that should have worked did not work.
For instance. Before this writer’s ‘aha moment’ occurred, I arranged a separate conference at the Louisville Show some years ago with MHI leadership.
The purpose of that all-day meeting of key MHI people and others was precisely to help arrange more financing and better options for HUD Code manufactured homes. It was a goal of bringing new blood in and giving existing blood new juice.
Outside of mainstream MHVille opportunities for more HUD Code home lending were exposed by introducing professionals face to face with each other at that pre-Louisville conference. Richard J. Dick Jennison emailed written praise of that session that was to be used for publication.
There was also another, separate meeting this writer also organized. Each of these sessions had dozens of industry professionals in attendance. Both occurred in the context of a Louisville Show. At this other session, FHA approved lenders were introduced. So too was a USDA official. Lending options were explained to attendees that in some cases could allow – wait for it – land-lease communities, given a regulatory tweak – to obtain near market rate financing on par with conventional site-built homes.
Yes, something that functioned like a chattel loan but had the consumer protections of a mortgage – all on a land-lease.
What happened to those exciting opportunities for manufactured housing? What did MHI leadership do with those opportunities?
In a phrase, evidence could be produced that shows they did — nada. Nothing. Zilch.
Each of those lenders that this writer and our MHProNews platform brought together were effectively given the brush off by MHI. Those professionals told me they were ignored. MHI leaders reportedly returned no calls or messages. Nor did MHI reportedly make any follow up attempt to the various presenters.
At the time, it was odd. But in hindsight, it was the Iron Triangle at work in reverse. The Iron Triangle, in conjunction with the Berkshire “Castle and Moat” strategy were deployed to keep interested parties out of manufactured housing. The case can be made that MHI was acting as the tool of Berkshire owned interests and their allies to keep limited lending in manufactured housing – limited.
That in turn, keeps sales down. Low volume – something Gooch mentions – is de facto a barrier of entry into our profession.
As a search of the website of the Manufactured Housing Association for Regulatory Reform (MHARR) reveals, they have for years pushed consistently for the DTS option. MHARR has long said that it was MHI that was the part of the roadblock. MHARR has also pointed the finger at FHFA and the GSEs. Call me slow, call me trusting. But before my ‘aha moment,’ after several voices from inside and outside of MHI – including input from federal officials – struck me like a thunderbolt, my common response prior to my awakening was to defend MHI and their insider brands. Their most recent report on the topic is linked below.
I sat in those MHI meetings. I read those MHI emails. I read those MHI comment letters. But for some time, it failed to dawn on me that all that stuff was just window dressing. It was all kabuki theater. It was all a big con game.
Shame on me for getting fooled for a time, for which I have periodically admitted and corrected, as the Society for Professional Journalism (SPJ) and their Rule of Ethical Conduct makes clear should be done soon after an error is realized.
But there is, as legal researcher Samuel Strommen at Knudson Law wrote, possible cases for “felony” antitrust as well as RICO violations.
Let’s unpack or examine these claims, terminology, related evidence, and publicly undisputed facts.
If Gooch is some wonder woman, what is there precisely for us to wonder about?
The only thing that comes to mind is how long she pulled the wool over the eyes of too many people, myself included. Beyond that, what practical evidence do we have beyond her ability to get photo ops? What exactly have those photo ops, years of letters or emails produced?
Where is the MHI beef? Where is their measurable performance? Isn’t it obvious that the big boys at MHI like it this way, or they would have gotten rid of wonder woman years ago?
It should be noted that part of my journey of discovery as to how the game is played at MHI and their part of the Iron Triangle was a one-on-one with Gooch at an MHI meeting in Boca Raton, FL. Other MHI members were standing or walking nearby. Gooch was outraged that as an independent business and MHI member – me – was writing things that did not 100 percent fit their party narrative. Even though at that point I did not get the purported con game, nevertheless, we produced reams of reports – plus videos – that broadly pushed similar goals. Gooch condescending statements to me at Boca Raton – plus my naiveté on how duplicitous some people could be at that moment in time – were later mollified by Tim Williams.
The Williams in question was the prior MHI Chairman and is the president and CEO of Berkshire Hathaway owned 21st Mortgage Corp.
That Williams made clear in writing to MHProNews for publication that there was “no daylight” between what we as pro-growth trade publishers were saying to the manufactured housing industry’s runaway largest professional audience and what MHI claimed that they were doing.
Now, the evidence-based allegation can be made that Williams is as mendacious and duplicitous as Gooch is on questions related to manufactured housing finance. We will circle back soon Williams, to the role of Clinton Jones at FHFA, and others like Jim Gray have in this messy mix of posturing and betrayal. Because these purported Iron Triangle members have cost our industry billions in sales annually at retail. They have simultaneously cost millions of potential consumers, manufactured homeowners, and taxpayers far more.
The quote above from Dr. Carson – perhaps unwittingly – explains how the Iron Triangle in reverse – apparently deployed to limit our profession as part of the Berkshire corporate units and their allies moat – costs so many so much.
More on Lesli Gooch, 21st’s Tim Williams, and Berkshire Hathaway
It must be difficult for Gooch and Williams to be accused of repeatedly lying, paltering, or using misdirection and deception in public. It must be hard for them to realize that the industry’s professionals are routinely being told and shown evidence that does not line up with their corporate narrative.
It must be hard for Williams, who praised this publication more than once and on the record, not to be able to make an intelligent public response to our allegations. After all, what is he supposed to say? After praising us AND using our services, once we wised up and began reporting what we were learning, how was he going to contradict himself?
Once the ‘aha moment’ occurred, the fascinating part of this is how quickly their narrative then falls apart. But part of the mantra of a con-artist is ‘never give up the con.’ They can not publicly admit that they were duping people, because criminal charges could follow, as Strommen’s legal research reasoned.
Periodically, it must be mildly embarrassing professionally for Ron Olson – a ‘name partner’ attorney at MTO law firm, and colleague of Berkshire Hathaway Vice-Chairman Charlie Munger and Berkshire board member – to be unable and/or unwilling to respond to questions raised. Those inquiries were first made to him by this writer and later by implication by Knudson law legal researcher Sam Strommen.
It must have been hellish for Gooch’s predecessor, MHI President and CEO Richard “Dick” Jennison to stand on stage in Louisville and have to publicly praise at – 21st’s Tim William’s direction – both this writer and MHProNews. Jennison had spent significant time with me. He frankly showed me some things that arguably later came back to bite him.
Jennison might have suspected that after certain questions and other events occurred, that MHProNews was on his case. Their cover story of doing so much for the industry was finally unraveling. Once someone grasps The Moat, Paltering, and the Iron Triangle many of the unanswered questions start to line up. The pieces of the puzzle of how the game at MHI was being played to undermine the industry and its independents becomes ever more apparent.
But it was this prior video to the one above that made Jennison’s purported role in this ploy start to unravel. Why?
Because who in their right mind would have argued for slow growth for an industry that at least on paper – and at several times in its history – had experienced rapid growth?
See this historic trends to illustrate just how rapidly manufactured homes could grow when the various factors lined up. The below is another example of a tool from a respected third party that for years has been missing from the MHI website. By keeping sales low, it is a barrier of entry, persistence, and exit. Failure to properly promote – while posturing promotion is the Illusion of Motion that MHARR and others have spoken about for years.
We at MHProNews waited until we began to have enough evidence of this duplicitous posturing game of paltering for profits.
Once we began to gather that evidence, long-term readers here will recall that this writer and MHProNews publicly called for Jennison and Gooch’s resignation and termination. Why?
Because we could demonstrate that they were massaging their claims to their own MHI members. They were trying to make themselves look better in the process. But what they said arguably was not the full truth. It was at best a half-truth, which is the classic definition of lying or deception by omission. It is also one of the ways that people can palter.
But Williams at 21st, instead of letting Jennison or Gooch go, double-down on them at a subsequent MHI meeting.
After a show ‘vote of confidence’ in front of the MHI board and with dozens in attendance, Jennison acted vindicated and proud.
But Williams from 21st came over to speak to me personally, one on one, after that Jennison ‘show vote.’
I congratulated Tim on a hand that was interestingly played. Heck, they are the proverbial House, they might as well own the deck, the bank, almost everything. He should have had a good hand to play.
Tim then in essence tried to reason with me. More aptly, he tried to persuade me to stay on board with the thrust of MHI’s efforts. I suspect Tim did not dream at that moment that a few years later, we at MHProNews would still peeling the layer away on the onion. How could he know? One layer at a time, we have reported and informed our readers about the various allegations.
Meanwhile, tipsters periodically provided documents and insights that furthered or ongoing investigations into the case for corruption from inside manufactured housing. Those tips often illustrate how corrupt the system appears to be.
We routinely give Clayton Homes, 21st, Vanderbilt Mortgage and Finance (VMF), MHI and others their opportunity to deny, rebut, or whatever.
- For a time, as longer term readers know, they threatened us via attorneys. We challenged them to go for it, telling them and our readers publicly how we would respond. Silence. No suit.
- Later, they used surrogates from time to time to attempt to knee cap, threaten or otherwise attempt to diminish our reports and investigations. We said periodically, these are ‘over the target reactions’ from the powers that be at MHI.
- For a time, they arguably arranged for thinly veiled threats via anonymously mailed letters sent through the U.S. Mail. If they were involved, misuse of the mails as well as misuse of the wires are possible elements in a RICO case. While there is also civil RICO, that can be a criminal offense. We published some of those mailed envelopes instead and exposed the tactic instead of backing down. The mailed stuff eventually stopped coming.
- We let them know in messages and follow ups – which MHProNews periodically later published -that clearly stated that there were BCC’s to public officials and attorneys. They were invited to respond to allegations being made – not only by this writer and publication, but by others. Time and again, the powers that be with Berkshire, or those ‘behind’ MHI declined to respond.
- All of this is significant. Because normally, the Iron Triangle, paltering, and such purportedly illegal behavior is not this documented.
- Ironically, Kevin Clayton and Tim Williams have both made statements that in the hands of a good attorney or prosecutor would be difficult for them to explain.
We periodically encourage people to be whistleblowers. There is, frankly, always some level of risk. But done prudently that risk is mild. When what is provided is useful in showing how the game is played in manufactured housing, or the kind of corrupt corporate, public officials, or nonprofit actions are occurring, the potential benefits are numerous. Keep in mind that the powers that be have slowly choked off thousands of locations in our industry. Untold numbers of professionals lost much, many all that they had worked for in building once successful businesses.
That type of Quisling style treachery will only stop when successfully confronted.
We have tried to walk the walk, not just shed happy talk.
- Keep in mind that MHI used to be a client of our LLC.
- So too was Clayton Homes a client company.
- So too was 21st Mortgage Corp a former client of our firm.
- It cost our firm money to repeatedly report on – and periodically expose – what these people were doing.
In fairness, there were tipsters too. Numbers of them. Some were from outside of MHI or even outside of our industry’s professional ranks.
- Additionally, there was years of MHARR’s ever-faithful efforts on behalf of their members. Let’s dwell on that a moment, as it is relevant.
MHARR is a producer’s trade group, not a post-production trade group. MHARR got involved in some specific post-production issues only because they must have realized (this writer’s words, not theirs) that MHI and their powers-that-be were at the root of the problem in Washington.
By contrast to MHARR, MHI claims to represent all segments of manufactured housing. If so, then does it not logically follow that the industry’s failures are to some degree laid at their feet? Then why does MHI’s corporate masters allow years of underperformance to occur? Why is Gooch still writing much the same letters she
First, as that claim has gone out via ‘the wires’ and by U.S. Mail, that arguably false or misleading claim is potentially the subject of a possible RICO action; civil and/or criminal RICO.
Next, for a time, it made no sense that MHI stopped providing news items MHProNews. They did so while we were still members and they were still ‘supporting’ us. MHI previously waned their own emails published by us for publication. For some time, they paid at times for us to publish their messages. So, what changed? Why did they change that prior to our ‘aha’ moment?
One must keep in mind that part of Warren Buffett’s mantra is to think long-term. Buffett preaches certain things, and Kevin Clayton said on video that he in turn teaches Buffett’s thinking to his team.
Kevin Clayton said that it would be okay with “Warren” if Clayton lost money for 5 years, so long as they were growing their moat. See that and much more in the report with transcript, linked above. Because if Buffett and his team play long term, so must the opposition and resistance to Buffett’s thinking and behavior must be long-term.
Because the Iron Triangle is part of what connects the dots between each of these behavior patterns. Let’s now pivot to that part of this report, analysis, and commentary.
The Iron Triangle
“An iron triangle is the term used to describe a relationship that develops between congressional committees, the federal bureaucracy and interest groups during the policy creation process.
The relationship between these three actors occurs naturally over time down to close proximity in which all of them work together. They are all seeking to maximise their gain during the policy process, and iron triangles help them to do this,” says Tutor2U on politics and the Iron Triangle.
This graphic is from left-leaning Wikipedia, which makes similar statements, illustrates that explanation.
As noted, there are articles, books, and numerous videos on the Iron Triangle. We picked these items from Tutor2U which gives captions and bullets to simplify and explain the Iron Triangle. Quoting:
Components of an Iron Triangle
- Gives Funding and Political Support to the Federal Bureaucracy
- Gives friendly legislation and oversight to Interest Groups
- Gives congressional committees the policy choices and executes that policy
- Delivers low regulation and special favours to the interest group
- Gives electoral support in the form of PACs and donations to Congressional committee members
- Delivers congressional support for the federal bureaucracy through lobbying Congress.
Iron triangles get their name because they are incredibly hard to remove once they are set in, all three components need each other in order to survive. It is not in the interests of any component to break the triangle.” ##
There is a question of legality as to how this Iron Triangle may work out in practice in some instances.
But let’s dot the i and share a hypothetical example of how this Iron Triangle works, again per Tutor2U, but noting that other sources say similarly. Typos from that source – or what may look like typos, but are rather British or Canadian English vs. American English spelling – are in the original.
“To provide a theoretical example:
The Defence committee in the House of Representatives will provide political support and appropriations to the US Department of Defence, who in return will execute the policy choices of the committee. The Defence Department will then deliver low regulation to the interest groups who are delivering congressional support through the Defence committee. Finally the interest group, which could be a defence contractor, will give electoral support to the committee members, and expect the friendly legislation and low oversight to come their way.”
They are writing about American politics.
Now let’s use a hypothetical example of how this Iron Triangle could work in manufactured housing, not the U.S. defense industry.
- Berkshire Hathaway (BRK) wants to make loans at a higher interest rate through 21st and VMF, with as little competition as possible.
- Berkshire further wants to build their moat in manufactured housing, which Kevin Clayton at Clayton Homes said on camera could even include a multi-year loss (not necessary, but useful at times), so long as their moat in manufactured housing is growing.
- Certain politicians and federal bureaucrats want the benefits outlined in the Iron Triangle examples above.
- MHI in this scenario is a tool and surrogate in the Berkshire moat-building plan. The reason that they were apparently okay with Lesli Gooch moonlighting for other housing organizations is because Berkshire’s goal is not the same as the stated goal of MHI.
- What MHI’s president and CEO stated year after year in writing and under penalties of perjury on IRS Form 990 is in this scenario is not what they are actually doing. Bear in mind that the MHI board also examines that form before it is submitted to IRS. One of several illustrations from that in depth report is shown below. Keep in mind that when asked, no one in that mix denied this, it stands publicly unchallenged. This is but one of several reasons why it is not likely that MHI, or Berkshire owned brands will ever admit to this ploy unless they are forced to through some legal process. Perjury penalties is part of what famously brought Al Capone down.
- Fannie Mae and Freddie Mac make billions in loans to conventional housing builders. Those conventional builders would rather not have to compete with far lower cost HUD Code manufactured homes.
- Fannie and Freddie will at some point exit conservatorship. Buffett led Berkshire was previously invested in both Fannie and Freddie. Berkshire has a large cash pile, and they are waiting for an “elephant sized deal,” Buffett has periodically said. Fannie and Freddie may be hoping that Berkshire will be part of their exit from conservatorship from FHFA.
- Public policy has been for some time that the FHFA wants to see Fannie and Freddie exit conservatorship. They are each led by intelligent people. They know that the GSEs need “elephant sized” investors. It just so happens that people like Warren Buffett, Bill Gates, or others in that multibillion-dollar corporation or private equity circle – some of whom are also involved in manufactured housing, other parts of the housing industry, and who may be MHI members too – are among the ones that could be that off-ramp by the Feds for the GSEs.
- Congressional representatives and U.S. Senators get campaign donations from some of these same billionaires, their corporation interests, PACs, dark money channels, etc.
- For years, lawmakers got campaign money from the GSEs. Long term thinkers might relish the day that the GSEs open up the campaign donation spigot again.
- To make this Iron Triangle work, each of the sides has to posture something in a duplicitous fashion. For instance.
- MHI’s Gooch and her predecessor has to write letters that look or sound good. MHI and their leaders have to hold meetings that look impressive and provide photo ops. But actually, they are working for the consolidators. If Berkshire, or several other larger members – examples: Skyline Champion (SKY), Cavco Industries (CVCO), Equity LifeStyle Properties (ELS), or Sun Communities (SUI), et al pulled out – then some of the MHI staff would either have to go, and/or there would be big pay cuts, and other embarrassing cutbacks.
- MHI proudly claims that they represent some 85 percent of manufactured housing production. But roughly 80 percent of that is 3 companies, Clayton Homes (BRK), Skyline-Champion (SKY), and Cavco (CVCO). All the others are targets for acquisition. That isn’t completely hypothetical. MHI’s publicly traded members have said as much.
- Manufactured housing production is dominated by Clayton Homes (about 50 percent market share), with two other de-facto or actual allies (which combined have about 30 percent market share).
- Because not many want to rock the billionaires and their corporate alliance, much of mainstream media will not touch the evidence for such concerns. Robert F. Kennedy Jr. recently unpacked that with respect to Bill Gates. But doesn’t the same principle apply to Berkshire? The obvious, evidence based answer is “yes.”
- Thus, if something doesn’t happen to hit the media headlines, then the whiff of scandal is avoided. That is thus unlikely to cost a U.S. Congressmen or Senator their seat. It is unlikely to cost some bureaucrat their job in an ugly way that may keep them from another turn at the revolving door.
- Everyone in this Iron Triangle is posturing for the cameras and media. It happens on both sides of the two major party aisle. Is it possible that some are not involved? Sure. But if so, then once they are advised, then would they not logically blow the whistle on the Iron Triangle?
- It is worth mentioning that in American politics, there is the dirty secret of Democrats and Republicans arguably limiting ballot access. It may be too far to say that there is a ‘uniparty,’ there are clear differences. Are some politicos capable of moving from one party to the next? Sure. But both Democrats and Republicans have a vested interest in keeping a serious third party from rising. There is still a reasonable appearance of political competition. There are also the apparent examples of existing third, fourth, or fifth ‘minor partes’ (Libertarian, Green, Patriot etc.). They could in theory compete successfully against Democrats or Republicans. But in practice, it rarely happens successfully.
- As popular as President Donald J. Trump has been with his base, he just said at CPAC on Sunday that there will be no new party for him. His goal is to dominate the Republican Party. Certainly, Democratic leadership feels similarly.
Rephrased, this process of play acting has been going on for years, in and out of manufactured housing. Other examples of the castle and moat being deployed in other professions could be made, but that is enough to move back to a more manufactured housing specific example.
- There is over 20 years of talk since the Manufactured Housing Improvement Act of 2000 was enacted. It was supposed to increase the amount of housing in the marketplace.
- There has been over 12 years of talk since the Duty to Serve (DTS) manufactured housing was enacted into law.
- Both of those bills the MHIA 2000 and DTS in HERA – each was widely bipartisan legislation – are in practice not moving from the law books into reality. Why not? The Iron Triangle helps explain it.
- As an added note, quite relevant, beyond new home construction there is conventional housing resales. Berkshire via Clayton happens to have a growing footprint in new conventional building. Berkshire also has an even more sizable footprint in the real estate business through Berkshire Hathaway’s realty unit.
- There is also a growing build to rent trend. Rental housing in general is hot. By constricting construction – despite happy talk and listening sessions that suggest the contrary – a few rental giants benefit. Rephrased, there is a lot of smoke and mirrors posturing to keep short-term thinkers happy. Meanwhile, long term thinkers smile all the way to the bank.
- Is there evidence for this hypothesis? Yes. Look at the laws in question. Look at the linked reports. Why aren’t those laws properly enforced, when it could seriously advance affordable home ownership for millions? Who benefits from that lack of proper enforcement of laws that would make more home ownership possible?
After over two decades, there is less home ownership in America today than in 2000.
After years of posturing care about minorities and their lack of access to affordable home ownership, there is no real progress. In fact, years of handwringing and posturing in Washington, D.C. – or at the state levels – has witnessed the overall rate of minority home ownership worsen.
Homeownership in general has also declined since 2000.
While Gooch’s meandering missive – linked here – and her arguably Iron Triangle minded corrupt letter to Clinton Jones at FHFA seems to advocate for some good things. But MHI has done similarly for years. Where is the progress by MHI? Why do the big boys at MHI not fire those who can’t move the stated agenda?
As MHARR said some years ago, this is aptly called the Illusion of Motion, not actual progress.
Gooch’s letter also gives cover to FHFA and the GSEs. As one of our tipster’s observed, as a good advocate, you never give the other side any excuse not to do something. But Gooch did precisely that in her letter to Clinton Jones. She did similarly at the listening sessions. She is not alone. Other predecessors of hers have done that at MHI for years.
In a way, it was a blessing in disguise that Williams did not terminate Gooch and Jennison when MHProNews publicly asked for their resignation or termination. It makes her role – his, Berkshire’s, et al, – arguably more apparent in hindsight.
The Case Involving CrossModTM
Gooch is still trying to argue in her letter to FHFA’s Jones for the now obviously failed CrossModTM homes project. Where is the logic in that pushing for a clearly failed ‘growth’ project?
In hindsight, the case can be made that CrossModTM and their Fannie/Freddie equivalents of MHAdvantage® and CHOICEHome® are one of the most obvious treacheries. That, by extension, is an all-too-apparent example of how the Iron Triangle is working as part of the Moat. There is apparent collusion between industry special interests, bureaucrats, and lawmakers who either do not get it and/or are looking the other way.
CrossModTM has become such a ludicrous laugh line that even the posturing queen Gooch didn’t bother in her letter to use their much-touted trade mark symbol after the word CrossMod.
How is that “Wonder Woman” has no evidence of progress to report at all?
When manufactured housing has just finished its second full ‘year over year’ of downturn during an affordable housing crisis, the only thing to wonder about this woman is this. How has Gooch gotten away with this treachery for so long? The answer is obvious. Wonder Woman is serving the interests of the consolidators. She is serving the interests of regulators who have no love for manufactured housing, because the juice is with site builders and others.
Those too are the moat and the Iron Triangle working together.
- It must be mentioned how miraculous it was that Fannie, Freddie, plus Clayton, Skyline-Champion and Cavco backed MHI all developed standards that are so similar in creating CrossModTM. The Fannie/Freddie equivalents of MHAdvantage®, CHOICEHome®, and CrossModTM is striking. Why is it that none of the three sets of groups released their closed-door meeting notes? Is that apparent indirect evidence of collusion not another big tell in the Iron Triangle?
Again, the Gooch letter on behalf of MHI to FHFA’s Jones is linked here.
There are a few more i’s to dot, and t’s to cross.
An insider provided MHProNews with a document that used to be on the old MHI website. It is shown below. Note Mark Calabria’s name near the top right corner that is underlined?
Notice how that document references in 2003 the push for full implementation of the enhanced preemption clause from the MHIA 2000, otherwise known as the 2000 Reform law?
With the Iron Triangle in mind, note how Mark Calabria used to be at HUD, and now is at FHFA?
Note too since that starting in 2003, that Berkshire began to exercise their muscle in manufactured housing.
It is axiomatic in Washington, D.C. that there are no coincidences.
- How many children – including many minorities – and their parents are growing up in substandard rental housing?
- How many adults are paying more for rent than what they would be paying to own a HUD Code manufactured home which could be building them equity?
- Cui bono? Who benefits? Who is harmed?
The other day, yet another call came into our office from a couple that had a Vanderbilt Mortgage and Finance (VMF) loan. They apparently have good credit. They want a lower interest rate. They told us that when they talk to a banker, as soon as they hear it is a Vanderbilt loan, they are told that they cannot be helped.
Superior Choice Union told MHProNews that they thought that the GSEs are making a mistake.
Several lenders are making loans in manufactured housing profitably. Yes, in the case of Superior, Triad Financial Services has a program that makes their success easier. But the entire charade of an argument that the GSEs need to get their feet wet on chattel lending before they go in full bore is obviously absurd. MHProNews blew that argument up at Tunica several years ago. Paul Barretto, then with Fannie Mae, has now gone on to another revolving door deal.
It is self-evident that the GSEs could execute a program successfully, because others in manufactured housing have done so too.
The case can be made that it is a combination of the:
- Iron Triangle,
- moats that keep the manufactured home industry artificially smaller than it should be,
- which in turn acts as a barrier for entry, persistence, and exit that profits a few handsomely at a cost to the many.
No wonder Sam Strommen at Knudson Law called this den of vipers a “Rube Goldberg Machine of Human Suffering.”
This is the scandalous tragedy of what has gone wrong in manufactured housing. It is perhaps made worse still by the notion that groups like MHAction or Prosperity Now benefit – often through dark money channels – from Buffett’s donations too.
It is all a serious series of interconnected shell game. A few get richer, while many get poorer.
When things started looking up in the last few years during the Trump Administration, arguably a new con is deployed where two weeks ‘to stop the spread’ of COVID19 become almost a year. Dr. Fauci is perhaps among the most blatantly overpaid, pompous, and corrupt public official in the federal government. He has contradicted himself so many times, sometimes within days of his prior stance, that one wonders how he has held on?
The Iron Triangle and the “Deep State” sheds light on Fauci and COVID19 that too.
The points here are several. The Iron Triangle is at work in manufactured housing, but in other professions too. The Iron Triangle and the Moat are at work in manufactured housing, but in other professions too.
Summary and Conclusion
There is plenty of evidence that such corruption in our profession is hardly a one-off. President Dwight D. “Ike” Eisenhower (R) warned America about the military-industrial complex decades ago.
President John F. “Jack” Kennedy was so disgusted with the Central Intelligence Agency (CIA) that he said he would break it into a thousand pieces and would scatter it into the winds. President Kennedy was murdered on national television. There are voices like that of his nephew and the son of assassinated Senator Robert F. “Bobby” Kennedy – Robert F. Kennedy Jr. – who has spent decades of his life fighting corporate corruption and the harm it does to children, farmers, and fishermen, among others.
President Trump was not assassinated by a bullet. He was never a saint, but his character was impugned and maligned in ways that effectively assassinated him in the minds of millions.
This writer was an MHI member for years. I sat on one of the MHI boards. I was elected by my peers. MHI leaders cheered us verbally and in writing for some time. I’m not an idiot, but I admit I did get played. I knew something was wrong in our industry. It made no sense to me why people said the right things but did not do the right things.
On the value of hindsight and history, Buffett was right.
Mark Twain was right too. It is easier to lie than it is to prove the lie.
One Paragraph Summary
Our evidence- and rational-argument could be summed up simply. Gooch and MHI are corrupt pawns of Warren Buffett, Kevin Clayton, Tim Williams/21st, and a handful of smaller players that are happy to work with Berkshire at subverting manufactured housing from within. The Iron Triangle is part of the Moat. People posture while they hope no one notices the lack of progress and accountability. The rest are the details.
But without evidence and reason – which takes far more words than the summary above to begin to ‘prove’ – it sounds too fantastic. It sounds like fiction. It might be brushed off as a conspiracy theory.
Two Kennedys are dead. Both were killed on live television. Decades later, much of the country does not believe the official cover stories. Neither does the nephew and son, RJK Jr., believe the cover stories.
In our industry’s instance, the case can be made that thousands upon thousands of independent were put out of business by the machinations of the Berkshire moat with sharks in the water’ scheme. The sharks in the water include members of the Iron Triangle.
It is a tragedy when someone’s life work, sometimes businesses that were successful for decades, can be swiftly ripped from under a person, family or partners. That has been done by manipulating the credit markets and access to capital. It has been done by weaponizing several of the manufactured housing industry’s institutions.
Thankfully, MHARR has stayed faithful. They and few of us have spoken out. Thankfully, a legal researcher at Knudson Law took the time to say, yes, this looks like “felony” antitrust and possible “RICO” violations involving Berkshire and other brands at MHI.
We have all witnessed in recent months just how brazen the big tech giants have become. The parallel case can be made that Tim Williams/21st was just as brazen when he said he was glad that the GSE’s pilot project had failed.
So, in the light of the above, there is clarity. Lesli Gooch’s letter to Clinton Jones at FHFA is an apparent sham. That’s the logical takeaway of this news, analysis, and fact check.
I stood on stage in Washington, D.C. in December of 2019 with several members of FHFA, Fannie Mae, Freddie Mac, Lesli Gooch, and dozens of others in the room. Jones and Calabria attended parts of the meeting, but I can’t say for sure that they were in the room when I spoke.
That noted, I said to all present that what they have done is a corrupt disgrace.
That 5 slide, cross-linked PowerPoint is as apt today as it was then. Not one of them dared challenged that presentation, even though I said it to their faces in front of their peers! Where was the lawyers to sue us out of existence?
Instead, there was a deafening silence.
That focused talk was later repeated virtually. Do you think Mark Calabria, who is reportedly a periodic reader of our site, might have known what was coming that day in December? Look at his body language in the photo above. Posturing smiling, but he is not exactly embracing Tony, is he?
It would be tempting to say that it was fun shaking hands with Jim Gray, who later exited in his own apparent Iron Triangle move from FHFA to a nonprofit with ties to manufactured housing interested parties, plus those who care about protecting the site-built industry’s moat too.
But that story – then and now – only scratches the surface of how many lives these corrupt people have arguably messed up.
How many trillions have been wasted on broken promises that they should have figured out decades ago? How many trillions were wasted on housing and other programs that were never going to come to pass?
America would be a better and richer place if that kind of corruption is rooted out.
Abraham Lincoln said it well. You can fool some of the people, some of the time. You can fool all of the people, some of the time. But you can’t fool all of the people all of the time.
What the alliance between billionaires, their corporate interests, big tech, and big government threaten is a way of re-writing and eliminating the parts of history that are not convenient to their narrative.
Therefor, now is the time for the decent people of our industry and millions of all backgrounds in the USA to make their voices unmistakably heard. Corrupt elections, dead Kennedys, or corrupt Iron Triangles deployed by moat-builders are all peas in a pod.
- If lawmakers won’t do their jobs honestly, and change their ways if/as needed, then sweep them out of office.
- If bureaucrats have played such games, they should be barred from office and prosecuted whenever possible.
- Wherever private interests have broken the law, they should be prosecuted whenever possible.
Otherwise, Buffett is right.
Otherwise, Buffett’s class, the corrupt wealthy have rigged the system and they have won. That’s more than enough said for today. But for those who are hungry to learn more, see the related reports.
Stay tuned for more of what is ‘behind the curtains’ as well as what is obvious and in your face reports. It is all here, at the runaway largest and most-read source for authentic manufactured home “Industry News, Tips, and Views Pros Can Use” © where “We Provide, You Decide.” © ## (Affordable housing, manufactured homes, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)
By L.A. “Tony” Kovach – for MHProNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing.
For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
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