Notice to MHProNews readers. Stating the obvious, evidence-based reporting that provides news with expert analysis has its advantages. With the passage of time, the accumulation of years of research, testimony, third-party reports, plus industry trends, several things have become apparent.
While there are financially significant and politically connected players in our industry that wield significant influence, the many could still beat the money.
Indeed, even the motivated actions of a few, down to even one motivated and thoughtful citizen in each state, could result in significant and positive changes in our profession.
To explore those ideas, consider the following.
What will be dubbed for now the Manufactured Housing Accountability Project (MHAP) is going to spotlight the following message to Attorney General Keith Ellison. The message below was conveyed by email on 4.10.2021. It should speak for itself. The header and a few attachments are not shown below, but the email is substantially the same as sent to several state officials in Minnesota.
4.10.2021 via email
Office of Minnesota Attorney General Keith Ellison
445 Minnesota Street, Suite 1400
St. Paul, MN 55101-2131
CCs: Minnesota House and Senate Leadership
Other MN AG Office members (see full cc list, below).
RE: Media outreach regarding allegations involving the manufactured housing industry.
Dear Attorney General Keith Ellison, et al,
Racial bias and corporate excesses, which include claims of a range of illegalities, are arguably among the most important and pernicious issues facing our nation and the State of MN. While then Representative Ellison was in Congress, along with some House colleagues, a formal statement was made about evidence of racial bias and allegations of other problematic practices by Clayton Homes and their Berkshire Hathaway-affiliated lenders who operate in the manufactured housing industry. Part of that statement is shown in the quote below.
To buttress the validity of the concerns those House members expressed is this pull quote from Donna Feir, Ph.D. Her statement was made due to research performed for the Minneapolis Federal Reserve. Feir cited some of the same reporting by the Seattle Times that sparked then Rep. Ellison’s comments, quoted above.
I am hereby providing your office via this message evidence compiled from legal and other research that has been conducted by third parties as well as our own MHProNews investigations, reports, and exert analysis. It includes substantial evidence of what Sam Strommen at Knudson Law has called a “felony” case of possible antitrust, RICO, and other violations.
Strommen’s allegations point to members of the manufactured housing industry which include Clayton Homes, 21st Mortgage Corp, other Berkshire-owned (BRK) brands, and other companies that are often seen as ‘leading’ members of the Manufactured Housing Institute (MHI).
By way of introduction, MHProNews is the acknowledged largest and most-read trade media serving the manufactured housing industry. As trade media, we strive to provide watchdog reports for purported wrongdoing, and we receive tips that aid that goal from a range of sources. As trade media, we also play the role of advocate for ‘white-hat’ firms plus seek to advocate for current and potential manufactured home consumers’ interests. Those interests involve matters which include, but are not limited to, claims of racial bias, market manipulation, conflicts of interest, predatory business practices, and other evidence-based credible concerns about injustices and purported illegalities. Personally speaking, as a person inspired by faith, it is my view that the long-term interests of a profession are ideally and pragmatically best achieved by honestly and honorably serving the interests of the consumer and public.
We get millions of visits every year. Our readers include those on Capitol Hill, those in various state offices, attorneys, investors, thousands of professionals, researchers, nonprofits, advocates, and others. Our research and reports have been cited by the CFPB, the National Association of Realtors, a range of NGOs, academics, media, and others. Following one of our tips akin to this letter, for example, HUD did an internal investigation that ultimately resulted in the discharge/separation of an Office of Manufactured Housing Program (HUD OMHP) staffer. Several at HUD and the FHFA know us.
With that backdrop, the following.
As a roughly 30-year veteran of the manufactured home profession, which includes over a decade of writing and publishing, in my expert view, the claim then Rep. Ellison and your colleagues made was based upon what appears to be substantial evidence.
That begs this question. Now that Keith Ellison is Minnesota’s Attorney General, have you considered looking into state-level antitrust, RICO, deceptive trade practices, and other allegations that harm the interests of consumers and small businesses in your state?
If so, I am not aware of something similar since Rep. Ellison left Congress.
Please be advised that we have had several contacts with state attorneys general offices in other states. For example, One Democratic state AG’s office forwarded our concerns to the federal Consumer Financial Protection Bureau. The CFPB, in turn, has contacted me. Two Republican-led assistant state AGs in their respective antitrust divisions have reached out to me via email and phone. Prior to the Strommen report, which is linked here and below, I was told that our reports had credible evidence of antitrust, RICO, and possibly other market manipulation and consumer-connected violations.
In my view, the body of evidence has only grown since then, and is supported by Strommen’s contentions, as well as by research performed by James A. Schmitz, a Minneapolis Federal Reserve researcher, and his colleagues who have written a series of reports on “sabotaging monopolies” and what they see as evidence of collusion between people at HUD and private interests that include builders. These purportedly corrupt practices, say Schmitz and their colleagues, are fueling the affordable housing crisis.
Put differently, since Rep. Ellison’s and his House colleagues’ concerns were voiced, the issues and evidence have only grown. Yet, there seems to have been no noteworthy action taken by either the CFPB or the Justice Department under either the Obama-Biden or Trump-Pence Administrations.
Besides the reports linked above, please let me share a few more links that would be useful in grasping, within a few hours of reading, just how extensive the evidence that supports the concerns raised by Strommen, Feir, Schmitz, and others is. Some of our reports are relatively short. All are cross-linked to evidence that supports the allegations.
The first one following the one about MHI and racial issues, which tops 8000 words, might be a useful introduction for a legal researcher in your office.
- Thus, this outreach is first an inquiry if any such probes in allegations of illegal and corrupt practices that harm small businesses and consumers have taken place in MN yet?
- But also, if it that has not yet occurred, please consider this as evidence for such an investigation by the MN AG’s office. And consider this as a petition for redress of grievances on behalf of those who are being harmed by these practices.
Before proceeding further, let me note the following.
The Manufactured Housing Institute (MHI) CEO Lesli Gooch, Ph.D., has raised the racial equity issue recently too. However, as our analysis of what is arguably a superficially fine statement by MHI reflects, Gooch and her colleagues could have raised these same points years ago. The case is made that MHI failed to hold several of their own members credibly accused of wrongdoing to account. Put differently, while the MHI missive provides useful insights, it is arguably window-dressing, for reasons explained in our analysis.
Your AG’s office is among the states that are probing the tech giants. Once the severity and the nature of the evidence hereby submitted is digested, I believe you will see the following.
- A better understanding of how the “castle and moat” methodology preached by Warren Buffett has arguably impacted manufactured housing.
- How that Buffett mantra has also apparently been adopted by other industries that could include those you are currently investigating.
Beyond those linked above, links to additional reports, are as follows. While the next one is the longest, it may prove useful as an introduction to those who may not be familiar with manufactured housing.
There are numerous concerns involving the manufactured home community sector. This example is not from your state, but it links information and sheds light on practices that I think you will find are likely impacting thousands of residents in Minnesota and hundreds of thousands nationally. It also happens to have an oblique tie into an issue that then Rep. Ellison attempted to advocate on. The PESP report is linked further below, and most certainly impacts your state.
These items are just an introduction, but they will rapidly give an attentive reader clarity on the issues. They are similar to the reports read by other state AGs that sparked their interest. The one below, I am told – in writing – will be posted to the FHFA “Listening Session” web page. It addresses the financing issues with more specificity, and like the others, cites and links evidence accompanied by expert analysis.
This next is from the Manufactured Housing Association for Regulatory Reform (MHARR), which is a trade group that has also looked into several of these issues. This is on the financing topic. Their CEO is attorney Mark Weiss.
Last, but not least, for now from our research. Please be aware that we have reached out several times to top officials at the firms and the MHI trade group, seeking their responses to these allegations. Those contacts included those to inside and outside counsels. For instance. At Berkshire Hathaway, this is but one of the examples of contacts with Ronald L. Olson, who is a Berkshire board member and a named partner at the MTO law firm, which includes Charles “Charlie” Munger, the vice-chair and Buffett’s right hand for decades.
A list of some links to mainstream news reports and commentary that shed light on Clayton Homes and related “Castle and Moat” issues are as follows. While we would not give a blanket endorsement of all that these reports stated, they are nevertheless useful in substantiating the point that these issues are in the public eye and merit serious attention.
Kori Hale from CultureBanx writing in Forbes called out Buffett, Clayton Homes, and their lenders in April 2019 for racial bias and other problematic business practices.
GuruFocus said “Warren Buffett Can’t Escape Unethical Strategic Moats,” their specific points are linked here.
The Atlantic, without specifying how the monopolization was being accomplished, noted that the independent retailers in manufactured housing were being rapidly eliminated/consolidated, that report is linked here.
The Nation called it “The Dirty Secret Behind Warren Buffett’s Billions…” and specifies Clayton Homes among those using the strategic moat in ‘dirty’ ways.
The Jacksonville Florida Times Union summarized the connection between the John Oliver viral hit video dubbed “Mobile Homes,” MHI, Clayton Homes, and their related lenders. That op-ed was first fact-checked by an editor, before it was published not only in the one newspaper it was submitted, but at least in 5 Florida newspapers.
Seattle Times | The Mobile Home Trap – This includes items referenced by Ellison, Feir, and others.
Robin Harding, “How Warren Buffett Broke American Capitalism.” Financial Times
While each of the above were useful insights in our own research, I hope you will find that the articles above will shed a brighter light on what these others did and did not cover.
As professionals who have granular experience in manufactured housing as well as in manufactured home reporting, we have been laser-focused for years on what has gone wrong in our profession. Candidly, it took years to unravel to the current point. Numerous third-party research reports linked from MHProNews.com and MHLivingNews.com have synthesized thousands of pages into intelligible insights that could benefit your proposed probe into these troubling issues. They and that sampling of mainstream media reports should make it clear to an objective mind that there is plenty of evidence to act upon.
FWIW, be it the Clayton/Berkshire or Facebook/Google cases, let me make this observation and heartful suggestion. Based upon history and years of research on antitrust and monopolistic and market-manipulating practices issues, it seems to me the solution must include breaking these firms up, along with whatever punishments their actions may legally merit.
For three years, we have periodically referenced this observation by academic and tech guru, Scott Galloway. Like the arguably book-end observation by Carol Roth above, the efforts by Facebook, Google, and other giant firms for more regulations is a scam meant to give the appearance of accountability. Instead, regulations are often just part of the Warren Buffett style “Moat” that these firms purportedly deploy.
The case for market manipulation that hurts consumers, taxpayers, independent businesses, and others can be illustrated with these market share graphics.
While Berkshire Hathaway’s annual report is arguably written in a manner that obscures the information shown below, we obtained a third-party report that tends to confirm what that chart reflects.
The dramatic shift this illustrates can demonstrably be reflected to have impacted dozens of once-prosperous firms that produced affordable manufactured homes.
The pattern that you see in consolidation of manufactured housing production is taking place in the manufactured home community sector too.
As those Federal Reserve researchers cited above suggest, and applying the principles of their sabotage-monopoly thesis, powerful corporate interests can obscure the harm that they are causing. Because they, MHARR, and others allege the some of this involves collusion with federal officials, it only makes sense to approach this from both state and federal angles, to maximize the chance that true justice is done.
While conventional housing is soaring, far more affordable manufactured housing is sliding. What explains that phenomenon? Note that fewer HUD-Code manufactured homes shipped in 2020 than did in 2003, when Berkshire Hathaway completed its acquisition of Clayton Homes and their affiliated lending.
The linked reports from this message will shed light on how the Castle and Moat mechanism is an apparent part of the answer. In the linked reports, you will see Kevin Clayton and Warren Buffett’s own words — and then they are applied to this fact pattern.
As a small businessperson myself, we are a professional free enterprise. As noted, we believe in principled business that is fair to consumers and all in the mix. What is occurring in our profession is, as Robin Harding claimed, a manipulation of capital and markets in a fashion that destroys the access to the American dream of home and small business ownership. That in turn impacts jobs, opportunities, and so much more.
It is my hope that since then Rep. Ellison was engaged on these topics while in Congress, that you as public officials will take this issue to the logical next steps.
Kindly confirm your receipt of this message. Please feel free to message or call once the items have been digested. The list of those CC’d follow my contact information.
L. A. “Tony” Kovach
LifeStyle Factory Homes, LLC
MHLivingNews.com | MHProNews.com |
Senator Jeremy R. Miller (28, R)
President of the Senate
Majority Leader Paul Gazelka (R)
Minority Leader Susan Kent (DFL)
Speaker of the House Melissa Hortman
Majority Leader Ryan Winkler
Minority Leader Kurt Daudt
Deputy AG Canaday, James
Ast AG Katherine Kelley
MN AG Media Contact: John Stiles, Deputy Chief of Staff
Our normal left-right bullet headline feature will be omitted today. Other features that include the quotable quotes, market snapshots, and the manufactured home connected equities as of the closing bell on 4.10.2021 are below.
Quotes That Shed Light – Industry, American, Social, National Issues
Market Indicator Closing Summaries – Yahoo Finance Closing Tickers on MHProNews…
Featured Focus –
Where Business, Politics and Investing Can Meet
Related, Recent, and ‘Read-Hot’ Reports
Manufactured Housing Industry Investments Connected Closing Equities Tickers
Some of these firms invest in manufactured housing, or are otherwise connected, but may do other forms of investing or business activities too.
- NOTE: The chart below includes the Canadian stock, ECN, which purchased Triad Financial Services, a manufactured home industry lender
- NOTE: Drew changed its name and trading symbol at the end of 2016 to Lippert (LCII).
- NOTE: Deer Valley was largely taken private, say company insiders in a message to MHProNews on 12.15.2020, but there are still some outstanding shares of the stock from the days when it was a publicly traded firm. Thus, there is still periodic activity on DVLY.
Berkshire Hathaway is the parent company to Clayton Homes, 21st Mortgage, Vanderbilt Mortgage and other factory built housing industry suppliers.
· LCI Industries, Patrick, UFPI, and LP each are suppliers to the manufactured housing industry, among others.
· AMG, CG, and TAVFX have investments in manufactured housing related businesses. For insights from third-parties and clients about our publisher, click here.
Enjoy these ‘blast from the past’ comments.
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That’s a wrap on this installment of “News Through the Lens of Manufactured Homes and Factory-Built Housing” © where “We Provide, You Decide.” © (Affordable housing, manufactured homes, stock, investing, data, metrics, 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 MHLivingNews.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.