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Investigating Private Companies by Chris Roush


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Chris Roush presents "Investigating Private Companies" during the four-day, Reynolds Center webinar, "Investigating Private Companies and Nonprofits."

For more information about free training for business journalists, please visit

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Investigating Private Companies by Chris Roush

  1. 1. Investigating Private Companies and Nonprofits Jan. 23, 2012 Chris Roush [email_address]
  2. 2. Public vs. Private <ul><li>Business reporters spend a lot of time writing stories about publicly traded companies who file documents with the SEC </li></ul><ul><li>Makes it easier to cover business, because lots of information is disclosed. </li></ul><ul><li>Does it make reporters lazy? In some cases, I would argue yes. </li></ul>
  3. 3. Private companies <ul><li>Small companies are the backbone of local economies. </li></ul><ul><li>22.9 million, according to the U.S. Small Business Administration. </li></ul><ul><li>Small businesses provide 75 percent of the net new jobs added to the economy, and represent 99.7 percent of all employers. </li></ul><ul><li>More than half of the private work force is employed by a small business, which accounted for 52 percent of the private sector output. </li></ul>
  4. 4. <ul><li>Can sometimes be harder to find information about private companies. </li></ul><ul><li>If you look hard enough though, you’ll find what you’re looking for. </li></ul><ul><li>Many private companies will disclose the information somewhere, to someone. </li></ul>Private companies
  5. 5. <ul><li>Don’t be afraid to ask. </li></ul><ul><li>When someone tells you no, keep digging. </li></ul>Private companies
  6. 6. Basic places to look
  7. 7. The beauty of checking up <ul><li>A developer came to Nashville </li></ul><ul><li>and proposed an amusement park. </li></ul><ul><li>Annie Johnson of the Nashville </li></ul><ul><li>Business Journal looked into his </li></ul><ul><li>background. </li></ul><ul><li>She found a trail of unpaid bills, bounced checks, evictions, troubled business associates and unfulfilled plans. </li></ul><ul><li>She got to write: “In a 2006 letter related to the purchase of the San Diego property, Peterson said he received a master’s degree in business administration from Harvard University. (Harvard’s MBA Registrar has no record that Peterson attended the school.)” </li></ul>
  8. 8. Where to begin: State records <ul><li>The Secretary of State’s office has records on every business incorporated in Minnesota. </li></ul><ul><li> </li></ul><ul><li>Here you can search by company name, new corporations or by registered agent. </li></ul>
  9. 9. Where to begin: State records <ul><li>The Department of the Secretary of State’s office has records on every business incorporated in Florida: </li></ul><ul><li>Here you can search by company name, new corporations or by registered agent. </li></ul>
  10. 10. What this will show you <ul><li>Incorporation records give you a listing of a businesses officers, or executives. </li></ul><ul><li>It will also give you a mailing address and a phone number. </li></ul><ul><li>Has their license expired? If it has, that could be a sign of financial trouble. </li></ul>
  11. 11. Secretary of State records <ul><li>You can also search Department of Secretary of State records to get similar information for other operations. </li></ul><ul><li>These include nonprofit entities, limited liability corporations such as law firms and limited partnerships. </li></ul>
  12. 12. Occupational Licensing Boards <ul><li>There are regulatory boards that govern dozens of industries in Minnesota. </li></ul><ul><li>They range from acupuncture to X-ray technicians. </li></ul><ul><li>These boards have Web sites where you can also find information about businesses in these industries. </li></ul><ul><li>Nice medical database here: </li></ul><ul><li>Other health licensing boards: </li></ul>
  13. 13. Occupational Licensing Boards <ul><li>There are regulatory boards that govern dozens of industries in Florida. </li></ul><ul><li>Department of Business and Professional Regulation licenses 1 in 16 Floridians, ranging from electricians to real estate agents, from cosmetologists to professional boxers. </li></ul><ul><li>Other regulated areas include hotels, restaurants, alcohol and tobacco retailers, condominiums and mobile home parks . </li></ul>
  14. 14. Licensing board examples <ul><li>In April, the Monterey County Weekly paper in California wrote about how the state Contractors State License Board was finding and fining unlicensed contractors in the county. </li></ul><ul><li>On the same day, across the country in Massachusetts, the Falls River Herald wrote about the local liquor licensing board approving two new restaurants. </li></ul>
  15. 15. Trade Associations <ul><li>Most private and small companies also belong to trade associations. Could be National Federation of Independent Business. </li></ul><ul><li>These associations may be able to tell you industry-wide figures for the state that put the industry in context. </li></ul><ul><li>They are also valuable to relay legislative issues concerning these companies. </li></ul><ul><li> </li></ul>
  16. 16. The WARN Act <ul><li>Employers who are laying off or firing workers are required to disclose such moves 60 days before they do it. </li></ul><ul><li>This is a document filed with the Minnesota Dislocated Worker Unit. </li></ul><ul><li>Regularly check for WARN act filings. </li></ul>
  17. 17. The WARN Act <ul><li>An employer must give notice if a plant will be shut down, and the shutdown will result in an employment loss for 50 or more employees during any 30-day period. </li></ul><ul><li>An employer must give notice if there is to be a mass layoff which does not result from a plant closing, but which will result in an employment loss at the site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33 percent of the employer's active workforce. </li></ul>
  18. 18. Safety and Health <ul><li>Worker complaints about unsafe or unhealthy working conditions are made in writing to the Occupational Safety and Health Division. </li></ul><ul><li>The division conducts investigations of complaints made by workers, investigations of work-related accidents and deaths, general schedule inspections of randomly picked firms, and follow-up inspections of firms previously cited for OSHA violations. </li></ul>
  19. 19. Workplace injuries <ul><li>The Occupational Safety and Health Administration inspects workplace deaths and injuries: </li></ul><ul><li>This site allows you to look at accident investigation reports and inspection reports for companies by industry. </li></ul><ul><li>Found 68 reports for Fleming Cos. Last one was last year, when company was fined $7,400 for violations at plant on Marshall Street in Minneapolis. </li></ul>
  20. 20. Workplace injuries <ul><li>The Fort Myers News-Press reported in April about an OSHA investigation into the drowning of a worker at a country club. </li></ul><ul><li>The Toledo Blade reported in April that a construction company in Ohio was fined $26,100 for failing to prevent worker safety hazards. </li></ul>
  21. 21. Bankruptcy court <ul><li> </li></ul><ul><li>The Minnesota District puts Chapter 11 filings and court dockets online. </li></ul><ul><li>Companies file for bankruptcy court protection when they can no longer pay their bills. </li></ul><ul><li>Chapter 11 filing will reorganize debt; Chapter 7 is liquidation. </li></ul>
  22. 22. My favorites
  23. 23. UCC Records <ul><li>Who owes money to whom, and how much? </li></ul><ul><li>These documents are available through the Secretary of State’s office in Minnesota. </li></ul><ul><li> </li></ul>
  24. 24. UCC Records <ul><li>A UCC filing occurs when one business sells something to another business on credit. The business that sold the tractor to the farmer, for example, filed a UCC form showing that the tractor is collateral for the loan. </li></ul>If the business that purchased the tractor fails to pay the loan, the other business can repossess the tractor. UCC forms can show whether a business is borrowing a lot of money to make purchases. This could be a sign that the company plans to expand its operations.
  25. 25. UCC Records <ul><li>When the Pittsburgh Post-Gazette investigated a church that wanted to redevelop a shopping center, it looked at its UCC filings and discovered that banks and other lenders had given it seven loans despite the fact that it had fallen behind in paying its taxes and other debts. </li></ul><ul><li>When USA Today researched former WorldCom leader Bernie Ebbers, it pored through UCC filings around the country to get a detailed list of everything he’d invested on or purchased in the past decade. That helped show the reader where the money he’d made from WorldCom had gone. </li></ul>
  26. 26. Nonprofit organizations <ul><li>Even though they’re not in operation to make money, you can still find out financial information. </li></ul><ul><li> is a Web site with information about nonprofit organizations across the country. </li></ul><ul><li>Found the financial information for 367 nonprofits in Minneapolis on this site. Some of them look like businesses to me. </li></ul>
  27. 27. Minneapolis nonprofits <ul><li>Boy Scouts of America Council: $4.9 million in revenue, $4.3 million in expenses. </li></ul><ul><li>Fremont Community Health Services: $3.22 million in revenue, $3.2 million in expenses. </li></ul><ul><li>YMCA of Metropolitan Minneapolis: $36.1 million in revenue, $35.4 million in expenses. </li></ul><ul><li>Are these really “nonprofits”? </li></ul>
  28. 28. Fort Lauderdale nonprofits <ul><li>Covenant House Florida Inc: $8.4 million in revenue, $8.44 million in expenses. </li></ul><ul><li>Fort Lauderdale Community Development Corp.: $1.58 million in revenue, $111,459 in expenses. </li></ul><ul><li>Museum of Discovery and Science: $4.87 million in revenue, $6 million in expenses. </li></ul><ul><li>Are these really “nonprofits”? </li></ul>
  29. 29. Nonprofit organizations <ul><li>Form 990 filed with the Internal Revenue Service. </li></ul><ul><li>Form 990 is required to be filed by tax-exempt organizations with more than $100,000 in annual receipts or total assets of at least $250,000. Form 990-EZ must be filed by smaller organizations, with at least $25,000 in annual receipts and total assets of less than $250,000. </li></ul><ul><li>The forms are public documents that reveal income, expenses, assets and liabilities; expenditures by program category; program accomplishments; names of officers, directors and key employees; compensation paid to officers, directors and key employees. </li></ul><ul><li>Most religious organizations are not required to file Form 990. </li></ul>
  30. 30. Nonprofit resources <ul><li> -- A searchable database for Form 990 filings with the Internal Revenue Service for more than 60,000 foundations. Can search by name, location or assets. More than one year may be available. </li></ul><ul><li> -- Has independent evaluations of more than 2,500 charities. Database can be searched by category, region or keyword. </li></ul>
  31. 31. Nonprofit resources <ul><li> -- The Better Business Bureau Wise Giving Alliance maintains reports on nationally soliciting charitable organizations that are the subject of donor inquiries. These reports include an evaluation of the subject charity in relation to the voluntary BBB charity standards . </li></ul>
  32. 32. Small Business Administration <ul><li>Federal agency created to help small business owners. </li></ul><ul><li>Virtually every small business is private. </li></ul><ul><li>Millions of companies registered with SBA to receive benefits or to qualify for contracts and business. </li></ul>
  33. 33. Small Business Administration <ul><li> </li></ul><ul><li>I searched for disadvantaged business enterprises in the 612 area code and found 208. (Can do a lot of other searches here.) </li></ul><ul><li>Minnesota Bearing Co. in Minneapolis was established in 1936 and had $12 million in revenue in 2002. </li></ul>
  34. 34. Small Business Administration <ul><li> </li></ul><ul><li>I searched for disadvantaged business enterprises in Fort Lauderdale and found 37. (Can do a lot of other searches here.) </li></ul><ul><li>James Singh Precision Engineering is an Asian-Pacific owned company that makes everything from metal cans to industrial valves. </li></ul>
  35. 35. Small Business Administration <ul><li>Computer Systems and Applications in St. Paul. </li></ul><ul><li>Company provides Web design and database application services. </li></ul><ul><li>15-year-old company with just $250,000 in annual revenue. </li></ul><ul><li>Contacts listed for the company and for some of its major clients. </li></ul>
  36. 36. Small Business Administration <ul><li>KVP Enterprises Inc. in Fort Lauderdale makes motors and generators. The filing for them lists contacts in Davie. </li></ul><ul><li>Pking Consulting does printing and scanning business. It’s owned by a woman, Phyllis King. </li></ul><ul><li>Sometimes these filings will list revenue and major clients. </li></ul>
  37. 37. Credit unions <ul><li>Many cities have dozens of credit unions. Yet many newspapers don’t write stories about them. </li></ul><ul><li>Credit union financial information is available online from the National Credit Union Administration. </li></ul><ul><li> Click on “Credit Union Data” on the left-hand menu to find specific information about any credit union. </li></ul>
  38. 38. Credit unions <ul><li>Net income for Honeywell Credit Union in Minneapolis rose 26% to $3.3 million in second quarter of this year. Real estate loans up a whopping 35%. </li></ul><ul><li>Minnesota Teamsters Credit saw a 24% decrease in net income for the quarter, as its investment portfolio flopped. What did it own? </li></ul><ul><li>Star Tribune Employee Credit Union reported 85% decrease in net income as loan loss reserves rose 336%. </li></ul>
  39. 39. Credit unions <ul><li>Credit Union called Med-Health in Fort Lauderdale had net income of $40,719 in the third quarter, a 148% increase from the second quarter, but down dramatically from same quarter a year earlier. </li></ul><ul><li>The Electricians Local 323 credit union in West Palm Beach made money in the third quarter for the first time in more than a year. </li></ul>Is there a turnaround story here?
  40. 40. Banks <ul><li>Regulated by state and federal agencies. </li></ul><ul><li>Data on bank branches -- including private banks -- such as market share is available online. </li></ul><ul><li> . Go here and click on “Bank Data” to get market share info. </li></ul><ul><li> . Find any bank holding company or location insured by the FDIC. Search results will tell you the bank’s total deposits and assets, as well as financial performance . </li></ul>
  41. 41. Banks <ul><li>Bremer Bank has eight branches in Minneapolis. </li></ul><ul><li>They range in deposits from $8 million to $140 million, but only two over $100 million in deposits. </li></ul><ul><li>Where are those two branches located? Are the branches with small deposit amounts new locations, or are they candidates to be closed in the future? </li></ul>
  42. 42. Banks <ul><li>Grand Bank & Trust has one location in West Palm Beach, and locations in Jupiter, Lake Worth and Palm Beach Gardens. </li></ul><ul><li>They range in deposits from $1.9 million to $87.8 million, but only one has over $33 million in deposits. </li></ul><ul><li>Where is that one branch located? Are the branches with small deposit amounts new locations, or are they candidates to be closed in the future? </li></ul>
  43. 43. Random websites
  44. 44. Political campaign contributions <ul><li>How much did Jesse Ventura give to certain local political campaigns? </li></ul><ul><li>What about federal campaigns? </li></ul>
  45. 45. Political campaign contributions <ul><li>How much did Dwight Howard give to certain local and federal political campaigns? </li></ul><ul><li>The last database goes back to 1980. Can search company names as well. </li></ul>
  46. 46. Lobbying <ul><li>Does the company have a lobbyist, and how much are they paying them? </li></ul><ul><li>Minnesota-St. Paul Metro Airport Commission paid a Washington lobbyist $100,000 last year. What did it get in return? </li></ul><ul><li>Why was Minnesota Power paying a Washington lobbyist $165,000? </li></ul><ul><li>Minnesota Valley Alfalfa Producers Coop spends $70,000 on Washington lobbyists every year. What is it getting out of it? </li></ul>
  47. 47. Lobbying <ul><li>Florida Atlantic University paid a lobbyist $25,000 in 2000, but hasn’t paid one since. </li></ul><ul><li>Florida Cruise & Ferry Service has also been hiring lobbyists. </li></ul><ul><li>Florida Progress spent more than $720,000 on Washington lobbyists. What is it getting out of it? </li></ul>
  48. 48. Hospital financial information <ul><li> </li></ul><ul><li>Here’s the list of Minneapolis hospitals that it has financial information for: Abbott Northwestern Hospital, Children’s Hospitals and Clinics, Fairview-University Medical Center, Hennepin County Medical Center, Phillips Eye Institute, Shriners Hospital for Children and Veterans Affairs Medical Center. </li></ul><ul><li>This is a subscriber site. </li></ul>
  49. 49. Hospital financial information <ul><li>There are 13 Orlando hospitals for which it has financial information, including Arnold Palmer Hospital for Children, and Orlando Regional Medical. </li></ul><ul><li>This is also </li></ul><ul><li>a subscriber site. </li></ul>
  50. 50. Patents and Trademarks <ul><li> </li></ul><ul><li>Type in a company’s name and see what they’re getting patents for. </li></ul><ul><li>Minnesota Mining and Manufacturing has received 7,663 patents since 1976, including for a “Method of manufacturing temperature range adjusted coated optical fibers” and “terminal for libraries and the like.” </li></ul><ul><li>Information in the patent application goes a long way in explaining what a business does. </li></ul>
  51. 51. Patents and Trademarks <ul><li>Tropicana Juice has received 88 patents since 1976, including ones recently for a “beverage container body portion” and a “reduction of heartburn episodes after ingestion of orange juice.” </li></ul><ul><li>Information in the patent application goes a long way in explaining what a business does. </li></ul>
  52. 52. The EPA <ul><li> -- Click on the docket to the left on the home page to see Federal Register notices, support documents and public comments for regulations the agency publishes and various non-regulatory activities. </li></ul><ul><li>Also a nice search engine of environmental information available by ZIP Code, which lists EPA regulated businesses. </li></ul>
  53. 53. Toxic Waste <ul><li> -- The Toxic Release Inventory is a database of information about releases and transfers of toxic chemicals from manufacturing facilities. </li></ul><ul><li>Facilities must report their releases of a toxic chemical if they fulfill four criteria. This can be searched by geographic regions as well as by facility, parent company and industry. </li></ul>
  54. 54. Activists <ul><li> -- Profiles anti-consumer activist groups, along with information about the sources of their exorbitant funding. </li></ul><ul><li>Breaks them up among activist groups, foundations, celebrities and major individual players in the activist community. </li></ul>
  55. 55. Amusement parks <ul><li> -- This file lists who regulates amusement park rides on a state-by-state basis. </li></ul>
  56. 56. EEOC <ul><li> -- The Equal Employment Opportunity Commission investigates charges against businesses for unfair employment practices or discrimination. </li></ul><ul><li>“ Litigation” section on the left side of the page has a link to a monthly report on all of the actions taken by the agency. </li></ul>
  57. 57. Consumer advocates <ul><li> -- National Association of State Utility Consumer Advocates, which represents the interest of consumers before state and federal agencies in 40 states and the District of Columbia. </li></ul><ul><li>Nice list of its testimony and filings. </li></ul>
  58. 58. Consumer products <ul><li> -- Search for complaints of compliments about any product and any company at this site. </li></ul><ul><li>If you’re writing about consumer products companies, the postings here might provide some story ideas. </li></ul>
  59. 59. One last thought <ul><li>Good business writers are hard to find. </li></ul><ul><li>Make a name for yourself writing business stories, and your career will take off. </li></ul><ul><li>A knowledge of how to write business stories about private companies can be applied to any beat at a newspaper or any publication. </li></ul>