Following disclosure last week that Austin billionaire Robert F. Smith had reached a $140 million tax evasion settlement, more information has emerged from federal authorities and other sources.
Smith is Chairman and CEO of Vista Equity Partners, a $58 billion private equity firm with 400 direct employees and thousands more working in its portfolio companies. Perched on top of Austin's Frost Bank Tower, Vista's Austin office was founded in 2011 and is one of five offices throughout the U.S.
Smith, 57, lives in Austin's Westlake area, overlooking Lake Austin. The son of two Colorado school teachers, his net worth is estimated by Forbes to be more than $5 billion. He is regarded as the country's wealthiest Black person.
Smith is cooperating with federal investigators in exchange for non-prosecution
Smith is assisting federal authorities in their investigation of Houston resident Robert Brockman, 79. Charged with hiding $2 billion in income over 20 years in the nation's largest-ever personal tax fraud case, the feds say Brockman filed false tax returns and concealed overseas cash.
Brockman was the original investor who funded Smith's creation of Vista.
At a Thursday press conference, at which Smith's behavior was called "egregious," the U.S. Attorney for the Northern District of California David Anderson announced Brockman's indictment and Smith's cooperation agreement. Anderson said that Smith will be responsible for the following:
- Providing complete and truthful information
- Continuing work with federal prosecutors
- Attending meetings and providing documents
- Testifying before a grand jury
Money in offshore accounts was used for Smith's extravagant personal real estate
A copy of Smith's signed Oct. 7 settlement letter with the government reveals that Smith routed untaxed gains through offshore partnerships and bank accounts in Belize, Nevis, the British Virgin Islands, the Cayman Islands and Switzerland.
Smith admitted to concealing more than $200 million in income and evading subsequent taxes during a 15-year period, from 2000 to 2015.
While much of the money was routed to Smith's charitable trust, the settlement letter states that substantial funds were withdrawn for personal use in real estate acquisitions and remodeling projects, including:
- A home in Sonoma County, California that he owned with his then-wife
- A Colorado ranch property that he used personally and at which he hosted events for disadvantaged youth and wounded war veterans
- Two ski chalets in the French Alps used by Smith and his family
- A European industrial property
Smith's settlement is larger than originally stated
According to documents signed by Smith, he has agreed to:
- Pay $139 million in taxes and penalties
- Abandon a $182 million tax refund claim
- Pay interest on taxes owed
Cloudy reports at Vista
Axios reports that Smith held a call with top Vista executives last week, in which he discussed his tax settlement and disclosed that his longtime billionaire associate, Vista co-founder and president Brian N. Sheth, would be leaving the company. Axios referred to a "breakdown in the two men's relationship."
Vista's situation is unclear as investors are alarmed and the SEC, according to Axios, is poised to investigate whether Smith will be allowed to continue to run the firm.
Authorities deny that Smith's connections were a factor
U.S. Attorney Anderson specifically denied, in response to a direct question, that Smith's charitable involvements and political connections were a factor in the decision not to prosecute him.
Smith famously repaid student loans last year for all graduates of Atlanta's Morehouse College. His list of philanthropic efforts is extensive, and in 2019 he was awarded the Carnegie Medal of Philanthropy.
During the investigation period, Smith had cultivated relationships with people close to President Donald Trump, including Treasury Secretary Steven Mnuchin and the president's daughter, Ivanka, according to various reports.
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Both Prop A advocates Save Austin Now and opponents political action committee Equity PAC raised over $1 million in funding between Sept. 24 and Oct. 23 ahead of Austin's Nov. 2 election, but their efforts haven't yet been reflected in the polls.
Prop A is the most contentious ballot item this election, if passed the measure would require a minimum police staffing of just over two officers per 1,000 residents. Also on the ballot is a parkland-focused Prop B; and eight state constitutional amendments. Despite constant coverage by city and community leaders and near record-breaking funds from both sides of the Prop A debacle, under 7% of voters have gone to the polls with less than a week left of early voting.
Save Austin Now, a self-proclaimed bipartisan group that saw its first major victory when it passed an ordinance to reinstate the homeless camping ban in May, raised $1,013,896.86 in the one-month period, bringing their grand total to around $1.7 million according to Jack Craver's Austin Politics Newsletter. It's the second time the political action committee has raised over $1 million—SAN nearly broke the record for money raised in a city election after racking up $1.9 million for the camping ban in May.
According to SAN co-founder Matt Mackowiak, chairman of the Travis County GOP, most funding came from private businesses and influential community members, including:
- Private equity investor Philip Canfield, who gave two donations totaling $125,000
- The cryptically-named America 2076— $100,000
- Venture capitalist firm Gigafund's managing directors Luke Nosek and Stephen Oskoui contributed $50,000 apiece
- Venture capitalist Joe Lonsdale, real estate developer Dick Anderson and car dealer Roger Beasley—$50,000 each
- Buc-ee's owner Donald Wasek, mystery donor "L., D.K", and Julia Wilkinson of charitable group Still Water Foundation each gave $25,000
- George Soros group Open Society Policy Center—$500,000
- Washington, D.C.-based liberal social justice charity Fairness Project—$200,000
- Left-wing "dark money" fund Sixteen Thirty—$100,000
- Oklahoma oil mogul Charles Schusterman's Charles & Lynn Schusterman Family Philanthropies—$100,000
- Several unions, including the American Federation of State, County and Municipal Employees, Texas Federation of Teachers, Southwest Laborer's District Council, International Brotherhood of Electrical Workers, ACLU of Texas and Austin labor union branch Austin AFL-CIO also contributed to the group.
Those big bucks have been put to use, with both groups pumping out commercials, billboards, ads and social media efforts to sway voters to either side. According to Craver, SAN has spent all but $2,777 as of Oct. 23, gaining the backing of Austin City Council Member Mackenzie Kelly and former Austin mayors Lee Leffingwell, Lee Cooke and Ron Mullen in the process. Those who endorse the campaign cite a need for better policing amid a nationwide uptick in violence, especially as Austin Police Chief Joseph Chacon announced that APD would no longer respond to "non-emergency" calls due to an understaffed force.
Some of their advertising has been called out as misleading, including misleading tweets about the possible support of Austinite Matthew McConaughey and insinuating that Austin Democrats are voting for the bill in text ads.
— Save Austin Now | Prop A For A Safe Austin (@SaveAustinNow) October 21, 2021
The Equity PAC still had $455,000 remaining as of Oct. 23 as they relied more on supporters Mayor Steve Adler, Council member Greg Casar, 80 community organizations and even some comments from Chacon, who says the measure is "based on older methodologies," to get the word out.
Most who oppose the bill say that Prop A, which could cost between $271.5 and nearly $600 million over five years according to estimates reported by city staff, would take away funds from other essential city departments. But they're still doing plenty of advertising outreach themselves—and Prop A supporters dispute that multi-million dollar price tag and say city council members are ignoring the increase in crime after cutting police funds last year amid Black Lives Matter protests.
Despite the hot topic, Travis County Clerk Dana DeBeauvoir told CBS Austin the city may fall behind their already-low goal of 18%-19% of eligible voters reaching the polls.
"It's a slow, low turnout. We're not seeing very good numbers at all," DeBeauvoir said.
Early voting ends Friday, while Election Day comes Tuesday, Nov. 2. For a guide to voting on the election, click here.
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As Halloween makes us second guess if that cold spot was a ghost or simply the cool front, keep your guard up because there are supposed haunted grounds in the city.
Austin is largely free of widespread hauntings but that doesn't mean it doesn't have its fair share of phantoms if you know where to look. Here are some of Austin's most haunted burial grounds.
Originally called the city cemetery, Oakwood Cemetery is Austin's oldest burial ground and has been standing since the 1850s. Though record-keeping isn't as robust from its early days, with over 40 acres of land and more than 25,000 people buried, Oakwood Cemetery is said to be the permanent home to some well-known Texans: U.S. Marshall and Texas Ranger John Barclay Armstrong who passed in 1913, Alamo survivor Susanna Dickinson who passed on in 1883, radio personality John Henry Faulk who was buried in 1990.
Oakwood Cemetery is also known for its fair share of hauntings—note that not all who lie there are resting in marked graves and some of the early marked graves, like 1897's "Little Brother" gravestone, are haunting in and of themselves.
So, why should you stay away from Oakwood Cemetery at night? You might run into the ghost of the first of the Servant Girl Annihilator's victims, 17-year-old Eula Phillips, who was murdered by her then-husband with an axe. Philips is said to wander the grounds lamenting her violent death with tears. Dickinson, who died at the age of 68, may also appear to you and is said to be the most visual of specters that roam the grounds.
Oakwood Cemetery is known for graverobbing—rumor has it that university professors used to steal bodies from unmarked graves to use as cadavers for their students—so you might encounter the souls who are still roaming the cemetery, looking for their bodies.
Shoal Creek Indian Massacre Site
The historical marker is located at 24th Street at Shoal Creek. (austinghosts.com)
Shoal Creek, like nearly all of the United States, can be traced back thousands of years to 9,000 B.C. with Native American arrowheads. Settlers would camp along the mouth of the creek, including famous residents like the second president of the Republic of Texas Mirabeau Lamar, where it is said they engaged in a turf war with the Native Americans who resided right nearby. Those who weren't killed by Comanche warriors were killed by cholera and were buried along the creek. It is said that a mass grave, filled with victims of yellow fever, cholera and unexplained violence, lies beneath the creek.
Of the hauntings most commonly seen at Shoal Creek, watch out for cold spots in the middle of summer, vanishing orbs of light called "Marfa Lights," vanishing apparitions, unexplainable noises at night, sudden sickness and nightmares after visiting.
The Austin State Hospital
The Austin State Hospital is still operating. (Texas Historical Commission National Register Collection and the Portal to Texas History)
When the Austin State Hospital took in its first patients in 1861, it was meant to be a beacon of hope for the mentally ill to recover from the stressors of everyday life. On any given day, the hospital would treat and allegedly sometimes experiment on anywhere from 200-4,000 patients and after an unfortunate death, bodies that were not claimed were buried in the cemetery out back behind the hospital. When the cemetery inevitably filled up, bodies were exhumed and transferred to a burial ground just over two miles away. Though they say all the bodies were transferred, legend tells that some have been left on the still-operating hospital's grounds just six feet below.
The Austin State School and State School Farm Colony
The Austin State School is now closed, many of its 68 buildings abandoned. (Andreanna Moya Photography/CC)
These two gender-segregated facilities were originally intended for mentally-troubled juvenile offenders, many of whom never left the grounds. On the school's 436 acres, 1,800 students were housed across 68 buildings and the campus also held farmland, a swimming pool and a cemetery. Children who were not claimed were buried on-site, where about 3,000 students are buried. The school was sued in the 1960s after changing its name to the Travis State School for inadequate living conditions and closed in the late 90s. Many buildings have been taken over by charter schools but some remain empty to this day.
Tucker Cemetery's unique sight is its dozens of hand-written tombstones. (kissingtoast/CC)
Just outside the Barton Creek Greenbelt, Tucker Cemetery doesn't have many stories of haunts to its name other than anecdotes of car locks popping open on their own. However, what makes this cemetery freaky is its collection of tiny, hand-scrawled tombstones.
Keep Austin spoOoOoOoky!
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Coming off of the heels of the biggest Formula 1 race to date, Circuit of the Americas now has plans to create luxury "car condos" for racecar enthusiasts right by the track.
Located on the racetrack's storied "Turn 11," COTA will create around 178 car condos on a 22-acre plot in a partnership with real estate firm Lincoln Property Company. Presale reservations for the units began Wednesday, and the project hopes to break ground by late spring of 2022.
The 340,000 square foot space will include a 7,000-square foot amenity center with a pool, a clubhouse, a conference center, outdoor barbecue grills and more.
The luxurious car condos will be located alongside COTA's famed Turn 11. (Lincoln Property Company)
Customers can trick out their space, which can range from 1,300 square feet to 6,000+, however they'd like. In other projects, Lincoln Property's JR Gideon has seen car condo owners add in mechanic shops, basketball hoops, bars, music studios and more.
"They're really for storing luxury cars just as much as hosting," Gideon said. "You can do pretty much anything in there besides live."
Think of the ultimate man cave, though that word's not quite appropriate—according to Gideon, some female clients have also booked reservations for the project.
"I think predominately, our demographic is going to be men, yes, but we've already had a few ladies reserve units, which is awesome," Gideon said.
Along with having a trackside space, Gideon said that owning a condo has other perks, including 20% off COTA events. Most importantly, however, these car enthusiasts want to see their cars on the track, something the team is already planning for.
"If you're going to have your nice cars at the track, you want to know if you're going to be able to get them on there," Gideon said. "Right now I'm planning for two full track weekends for owners to be able to get their cars out on the track."
Marketing for the project has just begun, and almost every client so far has been from Texas and/or the Austin area. But Gideon and team expect plenty of interest from national customers as well as some international buyers as the only F1 racetrack in the States with trackside car condos.
There could be a hitch in the plan, however. COTA's 10-year contract for F1 expired last weekend, and no new deal has been finalized yet. But COTA chair Bobby Epstein feels confident in renewing a contract, especially after the sports' biggest weekend to date. Gideon and Lincoln's Seth Johnston aren't involved in contract talks but say that plenty of attractions exist at COTA outside of the U.S. Grand Prix.
And with newfound American interest in F1—Gideon, like many others, partially credits Netflix's "Drive To Survive" series—the crew is confident that there will be more projects like this to come in the future.
"With (Drive To Survive) coming out in the last couple of years and so many people watching the past race, I think there's certainly a lot of momentum around Circuit of the Americas and this project as well as other future developments at COTA," Gideon said.
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