ObamaCare bites the dust, Eurocensors try grind Twitter under its bootheel, a lot of Ukrainian drone and missile strikes, Keir Starmer’s fingerprints are all over lots of censorship efforts, some homegrown Austin fraud, and the history of human occupation of north America just got a radical update.
On Thursday afternoon, the Senate rejected extending Obamacare subsidies, refusing to let taxpayers mask the skyrocketing costs of health insurance premiums caused by Barack Obama’s 2010 signature legislation.
“Senators rejected a Democratic bill to extend the subsidies for three years and a Republican alternative that would have created new health savings accounts — an unceremonious end to a monthslong effort by Democrats to prevent the COVID-19-era subsidies from expiring on Jan. 1,” the Associated Press reported. “Ahead of the votes, Senate Democratic Leader Chuck Schumer of New York warned Republicans that if they did not vote to extend the tax credits, ‘there won’t be another chance to act,’ before premiums rise for many people who buy insurance off the ACA marketplaces.”
Just a reminder that Schumer and the Democrats got absolutely nothing from their shutdown stunt. (Hat tip: Stephen Green at Instapundit.)
Europe is ramping up its war on free speech by targeting X with fines for not submitting itself to censorship regulations demanded by the European Union.
The EU levied a fine of $140 million against X, the first-ever penalty under Europe’s Digital Services Act. Europe decided that the website’s blue checkmark symbol is misleading, that it won’t give Europe access to data that will help it investigate free speech on the platform, and that it does not have a proper catalog of the ads available on the platform for Europe to examine.
This has been part of a two-year pressure campaign against X, as Europe does not believe in free speech, and X CEO Elon Musk has reduced the level of censorship on the platform. Europeans can claim that this isn’t about free speech but “transparency” all they want, but the 2023 investigation opened into X was focused on “disinformation” and “illegal content.” Now, Europe wants access to a list of X’s advertisers, wants its “researchers” to have access to the website’s algorithm to scrutinize “algorithmic bias” and “hate speech,” and to alter how the website runs with respect to its blue checkmark system.
“Note the Soros connection. As Mike Benz has repeatedly highlighted, the co-mingling of Soros and the Blob is real.”
Revelations that aren’t even shocking anymore: “Black Lives Matter Director Spent Millions in Donations on Homes, Shopping, Vacations, Indictment Alleges.”
Oklahoma City Black Lives Matter Executive Director Tashella Sheri Amore Dickerson has been charged with 20 counts of wire fraud and five counts of money laundering after allegedly spending millions in donations on personal indulgences.
Dickerson took over as the director of Black Lives Matter OKC (BLMOCK) in 2016 and since 2020 has raised more than $5.6 million for what donors believed was a national bail fund. The bail fund was also supplemented by grants through the Community Justice Exchange, Massachusetts Bail Fund, and Minnesota Freedom Fund.
The indictment alleges that from June 2020 to October 2025, Dickerson used at least $3.15 million in bail fund donations and grant money to supplement her lifestyle. Dickerson allegedly embezzled the funds to pay for personal shopping sprees, $50,000 in food and grocery delivery, trips to Jamaica and the Dominican Republic, as well as a personal vehicle and six Oklahoma City properties registered in her name.
The indictment explains that Dickerson allegedly used interstate wire communications to send false reports to Alliance for Global Justice, a fiscal sponsor to BLMOCK, which only permitted the group to use its funds in ways compliant with its 501(c)3 nonprofit status. Dickerson, however, did not disclose how she was allegedly using the funds for personal gain.
If convicted, Dickerson faces up to 20 years in federal prison and a $250,000 fine per count of wire fraud. For each count of money laundering, she faces ten years in prison and a fine of up to $250,000, or twice the amount of criminally derived property.
So was there any #BlackLivesMatter director who wasn’t using donated money as their personal piggy bank?
The scientific journal Nature has retracted a paper published in April 2024 that overestimated the economic effects of climate change and influenced central banks worldwide to create risk management scenarios.
The article predicted a 62% drop in worldwide economic output by 2100 if carbon emissions were to continue without reduction.
On Wednesday, the three scientists who worked on the study retracted it, citing “substantial” issues with the paper.
The climate study’s findings were undermined by an article published by a separate team of economists earlier this year in Nature, calling into question problems with the data for Uzbekistan that skewed the climate study’s conclusions.
According to the New York Post, if the numbers for the Central Asian nation were excluded from the data set, the projected economic decline of 62% would actually be a far less catastrophic 23%.
The problem is that the faulty numbers, which was nearly 3 times typical estimates, had generated headlines and excitement among policymakers around the world including the Organization for Economic Co-operation and Development and the World Bank.
The study was also used last year, to model the expected impact of climate change by the Network for Greening the Financial System (NGFS).
The NGFS is a worldwide network of central banks and financial supervisors with more than 150 members across nearly 90 countries.
Members of the NGFS include the People’s Bank of China, the European Central Bank, the Bank of England – and, until earlier this year, the Federal Reserve.
The climate study’s authors, Maximilian Kotz, Anders Levermann and Leonie Wenz of the Potsdam Institute in Germany, reviewed and amended their paper over the summer in light of the discrepancy and the retracted the study after acknowledging that their errors were “too substantial for a correction.”
“Oopsie! Sorry to make you destroy your economy over nothing!”
“Clandestine Campaign To Defund ZeroHedge, The Federalist & Breitbart Traced To Kier Starmer Operation.”
Very early into the COVID-19 pandemic, ZeroHedge suggested that a little-known Chinese lab in Wuhan might know something about the novel coronavirus sweeping the globe. As a result, and as you know, we were subject to an intense demonetization / deplatforming campaign that included getting kicked off of Twitter, PayPal, Facebook and other platforms, dropped by our advertisers, and targeted by MSM hit pieces which colluded with foreign ‘watchdogs’ to inflict maximum damage.
These same groups also targeted outlets including The Federalist and Breitbart over various reporting, which suffered similar fates.
Now, thanks to a new book by investigative journalist Paul Holden that builds on reporting by Matt Taibbi, Paul Thacker and others, we learn that the origin of these campaigns, launched years before the pandemic, was none other than UK Prime Minister Kier Starmer’s political machine, which began targeting left-wing outlets speaking critically of Starmer such as The Canary, and then went after conservative outlets in America – just in time for the 2020 US election.
Documents and internal accounts, many drawn from newly disclosed materials, reveal a coordinated project that operated behind a veil of anonymity, misdirection, and unreported political financing.
This murky operation known as the Stop Funding Fake News (SFFN) was launched and resourced through a think tank, Labour Together, that would later be fined for failing to declare £739,000 in donations between 2018 and 2020. Said funds helped underpin this clandestine anti-media strategy which affected news outlets from the UK to the United States.
At the center of the effort was Morgan McSweeney, a political strategist who has since become Starmer’s chief of staff and, according to public commentary by prominent journalists, one of the most powerful unelected figures in the modern Labour Party.
The newly disclosed materials reveal that SFFN was not in fact some grassroots, anonymous activist collective it claimed to be, but a political weapon forged by senior Labour figures and funded by millionaire donors, including individuals active in pro-Israel political advocacy.
The goal: destabilize independent media ecosystems aligned with Labour’s left under Jeremy Corbyn, elevate Starmer’s leadership bid, and delegitimize outlets – domestic and foreign – that threatened the faction’s consolidation of power.
Publicly, SFFN claimed to be run by anonymous activists. Privately, it was shaped by McSweeney and operated from the same small office suite in South London that housed Labour Together.
SFFN ultimately migrated under the umbrella of the Center for Countering Digital Hate (CCDH), an organization that grew out of a corporate shell once controlled solely by McSweeney.
British political operative and CCDH head Imran Ahmed
CCDH would later present SFFN as one of its signature initiatives.
Three Fronts of a Political Offensive
The documents reported by Holden reveal a three-part strategy that reshaped the British political landscape – and reverberated into U.S. media and politics. In a nutshell, this is how the sausage was made:
Destabilizing Jeremy Corbyn’s Leadership
SFFN’s narrative interventions were designed to amplify an “antisemitism crisis” that dogged Corbyn, boosting controversies and legitimizing a media ecosystem hostile to Labour’s left. This influence work aligned directly with the political interests of the centrist faction preparing for a post-Corbyn future.
Engineering Starmer’s Rise
Labour Together later claimed credit for helping deliver Starmer’s 2020 leadership victory, with McSweeney acting as his campaign chief. After Starmer won the July 2024 general election, McSweeney formally became chief of staff, solidifying the faction’s institutional dominance.
Silencing Dissenting Media
SFFN’s most aggressive project was an astroturf campaign against media outlets perceived as ideological threats. Targets spanned both the left (such as The Canary and Evolve Politics) and the right, as noted above.
In each case, the tactic was the same: identify advertisers appearing on targeted sites, publicly shame them through social media threads, and provide tools – including downloadable blocklists – to automatically exclude those outlets from programmatic advertising networks. The effort succeeded in devastating the business model of some targets; others survived but saw sustained pressure.
Corbyn is a dirty commie fossil who would have been a disaster as PM, but it looks like Starmer is a far nastier piece of work.
More UK rape gang coverup: “A former Metropolitan Police officer was accused of being involved in a London paedophile ring while serving with the force, but the case was ‘brushed under the carpet’ and ‘covered up,’ an LBC investigation has discovered.”
The Met launched a criminal investigation at the time into the allegations made by one of the complainants. She said the officer had abused her multiple times as a child and shared her with other “important men” at a hotel in Park Lane in central London. LBC understands the other men included an MP and a judge.
The victim also claimed that the officer targeted other “pretty girls” who were in the care system over several years.
LBC can reveal the officer was allowed to retire as a Custody Sergeant while under investigation. In 2012, officers under criminal investigation could only retire with permission from a senior officer.
LBC used to be London Broadcasting Company. (Hat tip: Instapundit.”)
The U.S. seized a large oil tanker off the coast of Venezuela as it traveled to Cuba.
“As you probably know, we’ve just seized a tanker on the coasts of Venezuela, large tanker, very large, largest one ever seized, actually, and other things are happening, so you’ll be seeing that later, and you’ll be talking about that later with some other people,” President Donald Trump said at the White House.
President Trump: “As you probably know, we just seized a tanker on the coast of Venezuela — a large tanker, very large.” pic.twitter.com/I51NenxoIP
— CSPAN (@cspan) December 10, 2025
One reporter asked Trump what would happen to all the oil.
“We keep it, I guess,” responded Trump.
Attorney General Pam Bondi said the FBI, DHS, and the Coast Guard, with help from the Defense Department, executed the search warrant:
Today, the Federal Bureau of Investigation, Homeland Security Investigations, and the United States Coast Guard, with support from the Department of War, executed a seizure warrant for a crude oil tanker used to transport sanctioned oil from Venezuela and Iran. For multiple years, the oil tanker has been sanctioned by the United States due to its involvement in an illicit oil shipping network supporting foreign terrorist organizations. This seizure, completed off the coast of Venezuela, was conducted safely and securely—and our investigation alongside the Department of Homeland Security to prevent the transport of sanctioned oil continues.
Today, the Federal Bureau of Investigation, Homeland Security Investigations, and the United States Coast Guard, with support from the Department of War, executed a seizure warrant for a crude oil tanker used to transport sanctioned oil from Venezuela and Iran. For multiple… pic.twitter.com/dNr0oAGl5x
— Attorney General Pamela Bondi (@AGPamBondi) December 10, 2025
The U.S. placed sanctions on Venezuela’s oil company years ago.
More blue city fraud: “Austin Energy employee allegedly paid $980K to ‘fictitious vendors,’ city auditor says.”
The Austin City Auditor’s Office released a report Tuesday accusing a local couple, both of whom previously worked for the city, of defrauding the city for approximately $980,000 by sending payments to allegedly fictitious businesses.
The report focuses on the alleged actions of Mark Ybarra, who worked as a facility service specialist for Austin Energy. He was issued a city credit card by his superiors for the procurement of necessary tools and materials, the audit said.
According to the report, he used the card to “pay fictitious vendors approximately $980,000 and fraudulently reported these transactions in City records.”
“The falsified invoices he submitted were ultimately discovered by his management in Austin Energy. Some of the fictitious vendors used contact information like addresses that connected them to relatives of Mark Ybarra, or Mark himself,” reads an email to KXAN from the auditor’s office.
According to the city auditor’s report, Ybarra allegedly made payments to 22 fictitious businesses using the card. He resigned from his job in October 2023.
A grand jury indicted Ybarra on Aug. 23. He now faces a felony charge of theft greater than $300,000.
His wife, former Austin Watershed Protection employee Ambrosia Ybarra, “refused to answer questions” from city auditors. She was indicted on Sept. 15 and charged with felony theft between $150,000 and $300,000. She resigned from her job in November, the report states.
Paramount looks at the proposed Netflix-Warner Brothers merger and says “not so fast.”
Paramount Skydance has made another offer to buy Warner Bros Discovery as it seeks to trump a rival plan from Netflix to buy the company’s studio and streaming networks.
Paramount, which is backed by the billionaire Ellison family, said it was making a direct offer to shareholders of $30 (£22.50) per share to scoop up the whole of Warner Bros, including its traditional television networks.
It said its proposal was a “superior alternative” to Netflix’s, delivering more cash upfront to shareholders and greater prospect of approval by regulators.
I don’t think either of them have the best interests of movie viewers at heart…
Speaking of Netflix, remember Carl Rinsch, the director hired to produce a science fiction TV show who instead took the money and plowed it into cryptocurrency? Guilty on all counts.
“Hundreds of Porsches in Russia were rendered immobile last week, raising speculation of a hack, but the German carmaker tells The Register that its vehicles are secure. According to reports, local dealership chain Rolf traced the problem to a loss of satellite connectivity to their Vehicle Tracking Systems (VTS). This meant the systems thought a theft attempt was in progress, triggering the vehicle’s engine immobilizer. Porsche HQ was unable to help or diagnose the nature of the problem.”
Draw Mohammed winner Bosch Fawstin write to say that Patreon has frozen his account and gives different answers as to why. If anyone has a good contact there you might drop him a line. He also put up a PayPal link for donations.
Scottish comedian and actor Stanley Baxter, who also served the British Army in Burma during World War II, has died at age 99. (Previously.)
Kash Patel is following the money, and may soon release the answer to who’s funding and controlling domestic terrorists Antifa:
FBI Director Kash Patel tells Just the News that the bureau is “on the verge” of unmasking the command structure and financing for anarchist groups like Antifa that have unleashed unrest around America and has also identified potential new criminal activity related to the abuse of federal law enforcement and intelligence.
“We are looking at so many different leads on criminal activity by those who are in positions of power, and we’re not going to stop until every single one of those is fully exposed,” Patel said during a wide-ranging interview this week on the “Just the News, No Noise” television show.
When asked whether more indictments against those accused of weaponizing government may be ahead, he said: “the documents are provided either to Congress or the courts of law and we make every referral we can under the Department of Justice.
“These indictments that you’ve seen, and the ones that you’re going to see coming up here in this near future, are just the beginning,” he added.
The director, a close ally of President Donald Trump, has pressed his team to uncover tens of thousands of pages of documents long withheld from Congress that chronicle abuses by law enforcement and intelligence agencies in scandals spanning from Russiagate and Ukraine impeachment to the Jan. 6 Capitol riot and the raid of Trump’s Mar-a-Lago home in Florida.
Those documents have already led to the indictment of former FBI Director James Comey for allegedly making false statements to thwart Congress during an investigation of news leaks and the indictment Thursday of former National Security Advisor John Bolton for the mishandling of classified information.
Patel asked Americans to be patient, saying some of the abuses of a weaponized government were systematically built over many years and are complex to unravel.
“I have to remind the audience of one thing. Everybody’s like, it’s seven months. What have you guys been doing? Well, they spent 20 years building this diseased temple of corruption,” he said. “It takes a little bit of time to defeat it and beat it down. I’m not asking you to trust me. I’m asking you to look at the work the men and women of the FBI have done so far in these seven, eight months, and just imagine what we’re going to do come the year’s end.”
Patel said one area where the FBI has made rapid progress is the tracking of financing and command structures of anarchist groups like Antifa that have fomented unrest in American cities, attacks on Immigration and Customs Enforcement agents rounding up illegal immigrants and antisemitic movements on college campuses.
He said there are indications that some support may come from overseas enemies and U.S. nonprofit groups that have tax exemptions from the IRS.
“Look, the thing I can tell you is that money doesn’t lie, and the thing we’re doing at the FBI is following the money,” Patel explained. “And thanks to President Trump, we now have Antifa designated, rightfully so, as a domestic terror organization. And we have had multiple investigations going on.”
Patel said those probes are “mapping out the money, and we are using social media and the influencers that the President had here just this last week, because they’re the ones on the ground, getting us ground level intelligence, because law enforcement isn’t able to enter these spaces, and these people are brave enough to do it.”
Here’s Glenn Beck breaking down the various moving parts of Antifa, from the foot soldiers to the funders:
If you’ve been following the story on BattleSwarm (see here and here, just for starters), a lot of the names (George Soros, Tides Foundation, Alliance for Global justice, Open Society Foundations, ActBlue, etc.) are familiar, though he’s missing Arabella Associates, and Fidelity and Schwab are going to be a shock for some.
“Look, I’m I am not accusing anyone here. I’m just saying this is pretty much off the top of my head. I’m just showing the connections that have a very strong odor attached to them. And I’ve followed these people long enough to know this is the way it works.”
I’m hoping Patel has enough evidence to decapitate all the hydra heads once and for all.
Welcome to day three of the Schumer Shutdown! January 6 was an entirely Fed operation, Hegseth reads the brass the riot act, the Trump Administration claws back some taxpayer dollars, Ukraine hits more Russian oil refineries, Tricolor’s numerous scams, a couple of hacking attacks, Fiddy gets 50, and a Beatles demo tape leads to lunch with Sir Paul.
It’s the Friday LinkSwarm!
The “FBI disclosed to Congress that there were 275 ‘plain clothes’ agents interspersed with the crowd that gathered at the U.S. Capitol on January 6, 2021.” So it was a Fed operation top to bottom. And, of course, they lied about it to congress. I guess calling “Operation MAGA Entrapment” would have been too obvious…
There are some familiar names in this Jason Curtis Anderson list of organizations setting America on fire, but a few new ones as well.
If I were investigating the organizations who are setting America on fire, I’d start here:
Foundations:
1. Open Societies 2. Tides 3. The Neville Roy Singham funds
-Community Justice Exchange -Unity & Justice Fund -Peoples Support Foundation -United Community Fund -Arc of…
-The People’s Forum
-Party for Socialism & Liberation
-Answer Coaliton
-Code Pink
-Tricontinental Institute
-Breakthrough News
-International People’s Assembly
-Venceremos Brigade
2. PAL Action
3. Palestinian Youth Movement
4. Within Our Lifetime
5. Stop Cop City
6. Samidoun (still no arrests)
7. SJP
8. National Lawyers Guild
9. DSA (planning to disrupt military supply chain)
10. AROC (blocks ports)
11. Alliance for Global Justice
12. Dissenters
13. Indivisible
Defense Secretary Pete Hegseth gathered hundreds of the nation’s top military leaders in Quantico, Virginia Tuesday morning to lay out his vision for restoring the military’s “warrior ethos” by rolling back the left-wing indoctrination that’s taken hold at the Pentagon in recent years.
Warning the assembled generals to “do the honorable thing and resign” if they rejected his message, Hegseth called out the leaders for allowing physical fitness standards to slide while diverting valuable time and resources towards politically fashionable causes related to race, gender, and the environment.
“No more identity months, DEI offices, no more dudes in dresses,” Hegseth said. “No more climate change worship. No more division, distraction, or gender delusions. We are DONE with that sh**.”
The secretary announced that female physical fitness standards will be eliminated from combat roles, reiterating a directive that was first issued in March.
“I don’t want my son serving alongside troops who are out of shape or in combat units with females who can’t meet the same combat arms physical standards as men,” the Pentagon chief said.
All soldiers in combat roles, regardless of gender, must now meet the male physical fitness standards, Hegseth said, “because this job is life or death.”
“Each service will ensure that every requirement for every combat MOS, for every combat arms position, returns to the highest male standard only,” Hegseth said.
Basic physical fitness standards will also be applied to the highest ranking officers.
“It’s unacceptable to see fat generals and admirals in the halls of the Pentagon, and leading all around the world. It’s a bad look, and it’s not who we are!” Hegseth said. “You need to meet the height and weight standards.”
“Today, at my direction, every member of the Joint Force at every rank is required to take the PT test twice a year, as well as meet height and weight requirements twice a year. EVERY year of service.”
Summary: ““The military has been forced by foolish and reckless politicians to focus on the wrong things.”
Analysis: True.
At least the shutdown did give us this:
President Trump is trolling Chuck Schumer and Hakeem Jeffries over their obsession with giving free healthcare to criminal aliens
One story that broke a bit late to include in last week’s LinkSwarm is the Des Moines school district superintendent who turned out to be an illegal alien with a deportation order. With further digging, it seems that Guyana-born Ian Roberts lied about pretty much his entire list of academic accomplishments.
So, he went to St. John’s with his student visa, but got his EdD from an online university no one has heard of and has a plethora of other universities listed without degrees attached.
In addition to this largely inflated and apparently fabricated professional record, Powell notes that there are some dubious awards Roberts claims which are unverifiable as well as claims to police and military service which are hard to confirm.
So who hired him? Would you believe board chair Jackie Norris, former Chief of Staff to Michelle Obama?
More: “Head of Iowa school district arrested for avoiding deportation, found with handgun after chase.”
In a 6-3 vote last Friday, the United States Supreme Court has granted the Trump administration’s emergency appeal to withhold nearly $4 billion in foreign aid funds appropriated by Congress.
The ruling by the conservative majority of the court permits the White House to withhold the funds through a pocket rescission under the Impoundment Control Act.
The move also permanently stays a lower court’s order by U.S. District Judge Amir Ali who had ruled that the administration’s freezing of the funds was likely illegal and that Congress would have to approve the decision to withhold the funding.
The lower court ruling had been temporarily blocked by Chief Justice John Roberts on Sept. 9 after a federal appeals court had declined to put Ali’s ruling on hold.
A tweet from the Department of State celebrated the ruling as a win for the president’s America First foreign policy and for Secretary of State Marco Rubio and lauded the administration’s efforts to rein in what it called, “wasteful, woke, and weaponized foreign assistance and international organization spending.”
Office of Management and Budget director Russ Vought announced that nearly “nearly $8 billion in funding for climate-related projects, which he labeled as ‘Green New Scam funding to fuel the Left’s climate agenda,’ is being canceled.”
So Keir Starmer, the man who refuses to stop importing unassimilated Muslim illegal aliens into the UK, now says they can only solve the illegal alien problem by imposing a mandatory digital ID on all citizens, without which they will not be permitted to work. “The government said the digital ID would be held on people’s mobile phones and become a mandatory part of the checks employers have to make when hiring staff. Over time, it would also be used to provide access to services such as childcare, welfare and access to tax records.”
So the Syrian immigrant who shot up a Manchester synagogue was named Jihad Al-Shamie. You put that in a novel and your editor would reject it as being too on-the-nose. (Hat tip: Stphen Green at Instapundit.)
Would-be Brett Kavanaugh assassin Nicholas Roske sentenced to eight years in prison. Prosecution asked for 30.
“ICE sting at Dallas strip club nabs 41 illegal aliens, rescues sex-trafficking victims.” “ICE busted into the Chicas Bonitas Cabaret and discovered that a tip they received was correct: Illegal aliens were sex trafficking girls to dance at this strip club. Out of 41 illegal aliens, 29 illegally worked at the club. Five were previously convicted criminals.”
“Plano Private School Teacher Gets 20 Years for Sex Crimes Against Student. Jacob Allred pleaded guilty to sexually exploiting a 15-year-old girl at Great Lakes Academy, which specializes in students with learning disorders.”
Virginia Democrats are using the power of the legal system to protect a transgender sex offender from being prosecuted for his crimes. The policy is in line with Democratic gubernatorial candidate Abigail Spanberger’s views.
Democratic leaders in Fairfax County, the largest county in Virginia, have repeatedly refused to prosecute Richard Cox, a man who has allegedly regularly exposed himself to women and girls in the girls’ locker rooms at two high schools and a recreation center. Cox is being charged for his crimes in Arlington County, where a detective testified he had child pornography and a Fairfax County children’s swim class schedule on his phone.
Republican Jack Ciatterelli has brought the race to a dead heat between himself and Democrat Mikie Sherrill.
But that’s not all.
AFTER this poll was taken, more news broke about Sherrill’s less than stellar record at the United States Naval Academy.
“A cheating scandal in the Naval Academy prevented her from walking at graduation.” Evidently her friends cheated and she refused to testify against them.
“Tricolor Auto’s Failure Has It All – ESG, Woke Capital, Illegal Immigration, Securities Fraud, Government Diversity Programs, BlackRock, etc.”
Tricolor Auto Group, the nation’s seventh largest used car dealer (and 3rd biggest in Texas and California), just filed for Chapter 7 bankruptcy – e.g. liquidation. Its target customer had been illegal aliens, and with President Trump deciding to start enforcing the nation’s immigration laws, there has suddenly been a major “market correction” in that market segment. Not only has the customer base largely evaporated, but so have loan repayments, which Tricolor also serviced.
The “tri colors” that the name references are the colors of the Mexican flag – red, white, and green.
While the sudden loss of customers and loan repayments was the catalyst that caused the final collapse of Tricolor, its failure has revealed so much more, including securities fraud, Wall Street ESG gimmickry, race-based federal programs, etc.
Tricolor has securitized more than $2 billion of its very high risk auto loans over the past seven years. The most recent issuance was in June of this year, with JP Morgan Chase and other money center banks peddling more than $200 million of “social bonds” to credulous investors. These securities are certified as “social bonds” by the US Treasury’s CDFI (“Community Development Financial Institution”) program because Tricolor focuses on selling its cars and financial services to underserved communities, specifically Spanish-speaking non-citizens. Tricolor’s CEO, Daniel Chu, was quoted by Barron’s in 2022 as stating, “No one else is providing meaningful dollar credit to an illegal immigrant.”
As documented in this recent Barron’s article (“Tricolor Files for Bankruptcy, The Auto Lender Was Once an ESG Favorite,”) “Financial institutions until recently touted their social bond purchases as part of their commitment to ESG—or environmental, social and governance—principles. BlackRock took a $90 million stake in Tricolor in 2021 as part of its Impact Opportunities Fund focusing on businesses and projects owned, led by, or serving members of minority groups.” Of course BlackRock was involved.
You may recall that a major contributor to the financial crash of 2008 was Wall Street wizards packaging up a bunch of sub-prime mortgages, securitizing them, and then selling those “mortgage backed securities” to investors as something other than perfumed garbage. That is effectively what Tricolor has been doing with its auto loans, with the help of Wall Street.
In a Tricolor press release from March of this year titled “Tricolor Closes $328 Million Securitization to Advance Financial Inclusion at Scale in Underserved Communities,” CEO Chu stated, ”By providing deserving people with access to reliable, affordable transportation, Tricolor, which operates across six states and ranks as the third largest used auto retailer in Texas and California, helps move them into the financial mainstream and reverse systemic financial inequities in America.” Like the other securities issuance I referenced, JP Morgan Chase also promoted these odious securities, along with Barclay’s and Fifth Third Bank.
Per Car Dealership Guy, Tricolor’s bonds have collapsed to a value of 12 cents on the dollar, virtually wiping out the investors who bought those bonds. But as bad as this all sounds so far, it’s actually worse. There was massive fraud by Tricolor, which is causing losses to all parties who did business with it.
The banks who were packaging Tricolor’s securities also had lines of credit extended to Tricolor. There was a recent regulatory filing by Fifth Third Bank revealing that it was booking a $200 million impairment (loss) for fraud involving one of its customers. In this filing, Fifth Third disclosed that there was “recently discovered alleged external fraudulent activity at a commercial borrower,” and that it “is working with the appropriate law enforcement authorities in connection with this matter.” Barron’s confirmed that this commercial borrower was Tricolor. JP Morgan Chase also has about $200 million in loans outstanding to Tricolor, so it too will almost certainly be booking a massive impairment charge for this unrecoverable debt.
Some of the news reports about the Tricolor fraud state that collateral was “double pledged,” meaning that unbeknownst to the banks lending money to Tricolor, the collateral they thought was backing up their loans was also pledged to other banks.
Tricolor was also the servicer of its “buy here – pay here” loan portfolio, remitting collected payments to the banks who securitized their loans. From my experience dealing with fraud in this arena, it is quite likely that there was some level of kiting / ponzi scheme at work, and a constant inflow of new debt was necessary to keep servicing old debt that was not supported by actual assets.
Working in Tricolor’s favor to perpetuate the fraud was the aura of woke virtuosity that kept the money flowing in, which also helped shield Tricolor from appropriate due diligence by those same woke banks throwing money at it.
Working against Tricolor was President Trump’s immigration enforcement. The Department of Homeland Security issued this press release earlier this week: “Over 2 million Illegal Aliens Out of the United States in Less than 250 days.”
Funny how, after the company’s disasterous social justice rebrand, Keir Starmer’s Labour government bailed out Jaguar/Range Rover to the tune of £1.5 billion after a hack attack, despite the company being owned by India-based Tata.
