While the letter that follows was addressed this afternoon primarily to leaders connected with MHI, as the message itself says, more than one official with ties to HUD that also has reportedly performed work for MHI was also in the emailed document.
Given the ongoing downturn, the message should speak for itself. It is but one of several parallel path efforts that are underway to challenge the troubling status quo in the manufactured home industry.
RE: Media Questions About Legality and Liability, Notice, and Reply Requested
MHI Connected Ladies and Gentlemen,
“…get the stuff out that you are not proud of and be prepared to defend what you have accomplished.” – Brian Kilmeade.
There are questions over the last roughly 2½ years that I’ve put to the Manufactured Housing Institute (MHI) and/or their attorneys that have routinely gone unanswered. Some of them have been put to you and/or others who are MHI Executive Committee members, senior MHI staff, and/or outside attorneys that have or still do work for MHI.
Not replying to a question, as you know, is a constitutionally protected right. We respect the rule of law, including U.S. Constitutional law. We believe in a peaceful and proper use of rights given by God and that are protected by American law. Our intent is to respect and stay within the bounds of ethics and the law while encouraging others to do likewise.
While we have fact checked MHI and certain members from time to time, we don’t expect MHI or any organization to be perfect. People and organizations, including myself and our operation, are imperfect.
That said, when mistakes are made, once discovered or revealed, one ought to admit, correct, and atone as warranted, don’t you agree? Isn’t that what professional standards expect of mature, honest, and responsible adults — if those adults are sincere?
1) That said, people of good will can infer or deduce certain things based upon evidence of actions taken and/or inactions. People and organizations are accountable. While I’m not an attorney, it is my understanding of the law that both action and inaction can have legal consequences, depending upon variables of the issue, circumstances, and jurisdiction.
2) It is also my understanding of the law that when an organization files for nonprofit status certain commitments are made. Some of those documents executed by MHI officials are signed under penalties of perjury, but other laws also apply.
3) MHI as a trade group has made commitments to its members on its website and/or in bylaws and other documents. Statements have meaning that include accountability for claims made. Deliberate deception, for example, along with other violations of law may particularly open up a trade organization to various legal, regulatory, and other claims.
4) I’m once more asking for a copy of all MHI documents regarding bylaws, conflict of interest documents and memos, incorporation papers, antitrust statements, meeting minutes, organizational documents, and the like that should be available to members and/or prospective members. That request should cover the past 2 decades, noting I first made similar requests while our organization was still an MHI member. If there is nothing to hide, one ought to presume that this request would be honored.
5) MHI has made certain commitments and assurances to the Internal Revenue Service (IRS) the federal government, and to other jurisdictions too. MHI routinely claims to represent ‘all segments of factory-built housing’ – including, but not limited to, HUD Code manufactured home related issues. The very name, “Manufactured Housing Institute” – MHI – reflects a specific duty to address issues related to HUD Code regulated manufactured housing.
6) Manufactured housing, as MHI’s attorneys and key members certainly must know, enjoys federal enhanced preemption under the Manufactured Housing Improvement Act (MHIA) of 2000. We drew specific attention on January 9, 2019 to MHI’s lack of mention of “enhanced preemption” on the MHI website. Our LLC’s managing members have mentioned enhanced preemption in our federal comments letters, that we have reason to believe MHI and HUD staff alike have or are required to read.
7) Periodically before and since then, we have directly and/or sometimes through others asked MHI to intervene in cases involving local jurisdictions that planned to limit or bar manufactured housing. Per local sources, in each case we checked, MHI failed to address their proposed bans/limitations. That begs a question, why not contact those jurisdictions? Especially when in one or more cases, member companies were potentially impacted?
8) Given that in two cases MHProNews’ managing member contacted those local jurisdictions, and by making a legal argument based upon enhanced preemption and a related logical presentation where able to get them to relent in their stated plan, if we could do it, then why wouldn’t MHI be able to accomplish the same thing with more staff and resources?
9) Nor did MHI communicate to us, nor to our knowledge, to the industry at large via their own emails to your members and followers, any MHI attempt to intervene in those specific local manufactured housing limitations/ban matters that we have published reports on. Knowing that the Graydon law firm has told us in writing that they are monitoring our websites on behalf of MHI, that too is an additional point that should convey MHI’s full awareness of the issues noted herein. Frankly, MHI leaders could easily know about those 5 cases without our effort via published mainstream media reports, ‘Google Alerts,’ members, etc.
10) MHI hired a full-time public relations person in recent years.
11) In the past, MHI has per our sources, had a professional who was tasked with addressing efforts to limit or ban manufactured housing with local officials, even prior to the MHIA 2000, is that correct? Our understanding that said zoning/placement-focused MHI team member was in that role prior to the Berkshire Hathaway acquisition of Clayton Homes in 2003. Kindly confirm or clarify that claim, per an MHI source that asserted knowledge.
12) Also, in the late 1990s and early 2000s, per our sources, MHI had a public relations professional that would contact media to address factual inaccuracies, including, but not limited to, terminology issues, is that correct? That same public relations professional was also involved in making sure that good news about manufactured homes would be published in newspapers or with other media when possible. If so, then why has MHI in recent years not addressed problematic media reports, such as the viral Last Week Tonight with John Oliver video, errantly named “Mobile Homes” – and why wasn’t any published rebuttal to that hit video performed?
13) For months on end, with both MHLivingNews, but more on MHProNews, have spotlighted purported failures to do the obvious that may prove useful to reverse the year-over-year downturn of the industry in the prior 9 months.
14) Using screen captures made by software called Jing, as in the examples above and below, document examples of concerns that we have published previously. These shown are from this morning at the time shown in the Eastern time zone.
15) As a manufactured housing industry veteran, publisher, and expert, my understanding of the facts vs. the claims made by MHI lead me to logically conclude that the Arlington, VA based trade group has routinely failed to do what their mission claims. But that is not my viewpoint alone.
16) Those concerns have been raised by others, such as Neal Haney and the National Association of Manufactured Housing Community Owners (NAMHCO).
17) Concerns have been publicly raised in writing and/or on video by MHI current and past members, including, but not limited to: Frank Rolfe, Dave Reynolds, Joanne Stevens, Marty Lavin, Kenny Lipschutz, among others ‘on the record.’
18) MHI member – and then Executive Committee Chairman, Nathan Smith – and MHI President Richard ‘Dick’ Jennison have both said on camera that MHI has ‘at times failed.’ Nathan Smith said the ‘industry had to be honest with itself’ in facing that reality that MHI had failed to be proactive. Smith pledged as chairman to avoid reactive behavior at MHI, and said he would strive to leave the Arlington, VA based association as a more proactive organization. What happened to those assurances? But equally important, when MHI’s own president and chairman have made such an admission, why wouldn’t MHProNews or MHLivingNews publish about such obvious concerns?
19) Far more statements of concern have been made off the record to MHProNews and/or MHLivingNews, often by MHI members that are concerned with MHI’s pattern of behavior, but also by independents that may or may not be connected to any trade association.
20) So, in the event of litigation, congressional inquiries, other federal or state probes, etc. there are numerous people that could be willing to speak to their experiences. Several MHI leaders, not just Nathan Smith or Dick Jennison, could be asked under oath about why they did – or failed to do – certain things regarding specific issues at given times.
21) Certainly there are literally thousands of manufactured home operations that have been impacted by actions such as those linked here and here, some which may be willing to speak to their experiences. Given MHI’s antitrust guidelines statement, why has MHI failed to address such published concerns? What does MHI’s code of ethical conduct require, if there is such a code at all?
22) Beyond those mentioned, prior MHI presidents and past or present vice presidents can be called to testify too. Our media arm has been in touch with some already. Each can be asked about what they know or believe; including, but not limited to, why it was only with his exit message that a former MHI president wrote what he did at this link here.
23) While it is well known that we publicly have taken issue with several purportedly controversial practices by Warren Buffett and the Berkshire Hathaway conglomerate that he is chairman of, or the money trail from Mr. Buffett’s charitable ‘donations,’ it is equally true that we as a trade publisher and LLC believe that there is ‘wheat and chaff’ to everyone and everything.
24) There are some sayings by Mr. Buffett that have become quite well known. Those quotes we have used from time to time in our articles and reports to illustrate various points, including, but not limited to, his use of the term and metaphors attached to his phrase “the Moat.”
25) But Mr. Buffett has also been arguably correct on how some things just take time, how habits can be a chain that are difficult to break, and how the rear-view mirror is clearer than the windshield.
26) Beyond reports that we have published, several have been in mainstream media, including, but not limited to, the following.
27) 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.
28) GuruFocus said “Warren Buffett Can’t Escape Unethical Strategic Moats,” their specific points are linked here.
29) 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.
30) The Seattle Times reported in 2018 and previously that, Federal Officials Investigation Practices of Warren Buffett’s Mobile Home Business.
31) 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.
32) While the New York Times did not specify Clayton Homes, it had an interesting article on the historic trends that outlined and named several industries being monopolized.
33) We strive to bear such matters and more in mind as we publish, always mindful of giving the proper disclosures regarding allegations like these that are made, and how people are deemed innocent in America until they are proven guilty in a court of law, or otherwise enter into a settlement or plea deal, etc. As noted, we strive to operate peacefully within the boundaries of the law.
That Lead Up to These Questions/Notice…
34) In the course of doing work for a client yesterday, it came more vividly to my attention that there are satirical websites established online that have a disclosure on them that they are not a political candidate’s actual campaign website – which they mimic in a comical manner – but are at least in part satirical in nature.
1) Fair use laws and legal rulings, to my understanding of the law, certainly refer to the lawful use of even copyrighted and trademarked third-party material used for analysis or fact checks – which clearly include such use by news media – and/or for satirical purposes.
2) Political cartoons and memes often use satire, and so on.
3) These are apparently lawful uses of satire and can be a lawful use of other people’s intellectual property or work product, even if said work is copyrighted and/or trademarked.
4) If my understanding of that as a managing member of our LLC is incorrect for any reason, kindly so advise, citing specifically where any purported error in reasoning in this message and/or what is linked from this message.
All of that is to tee up these questions.
35) Prior to our doing so, I’m hereby asking MHI, their big boy members, and their legal counsel(s) to individually render an opinion to me and our organization in writing your response to the following.
36) Please explain in writing any specific reasons why it would not be legal to establish a new website that would be dedicated primarily to fact checks and satire about the Manufactured Housing Institute?
37) Given the proper disclosures on the home page of such a proposed website, and linked and/disclosed throughout such a proposed site, is there a valid legal argument to be made that would prohibit under U.S. law such a projected satirical/fact-check website?
38) Furthermore, would there be any reason not to spotlight on such a hypothetical website, and/or create individual unique websites following the same notions of fact-checks and satire, that focus more specifically to individual MHI member companies that may engage in problematic, controversial behavior, or so called ‘black hat’ behavior?
39) Finally, using the principles outlined herein and linked from this message, what if other website(s) were established dedicated to fact checks and satire about specific professional person(s) involved in MHI? Is there any problem in legally doing such fact checks and satire about specific professionals in MHI leadership roles?
40) It seems to me that such website(s) would become quite popular in America, perhaps even abroad in some cases. It also seems to me that such a website may help explain why manufactured housing is underperforming as an industry, which should be of interest to investors, public officials, advocates, media, and the general public.
41) It is our understanding, based upon third-party information and what is known about other industry trade media and bloggers, that we have by far the largest and most read trade news website in the industry with MHProNews.com. So, linking from that web property of our LLC to such a proposed satirical/fact-check site could rapidly give that site an SEO lift, don’t you agree? And then using such a proposed fact-check and satire website(s) to link back to our other website(s) would likewise be useful in terms of cross traffic, SEO, and so on, don’t you agree? Please feel free to ask website or other experts about that part of my inquiry. Their reply should be included in your message to me about the legal aspect of this, please.
42) Now, with those predicates in mind, the following.
43) MHI has made certain claims in writing and/or via video, graphics, and other forms of communication that are debatably false or misleading. Among those are that the industry had momentum when it was in fact going into a downturn, or claims that the industry would promote and protect the industry when in fact the industry has been at historically low levels during most of the time that Berkshire Hathaway has been involved in the industry.
44) In conversations with both Democrats and Republicans in Washington, D.C. and with federal officials, my understanding is that MHI and certain key members behavior may constitute violations of any number of federal and/or state laws. These we have outlined previously, as but one example, linked here.
45) Beyond communications with business professionals, investors, legal minds, lawmakers and bureaucrats, we have also been in touch with manufactured homeowner resident leaders.
46) Furthermore, and as noted, we have been in contact with local officials who have told us – for instance – that MHI and/or HUD has not contacted them about federal enhanced preemption under the Manufactured Housing Improvement Act (MHIA) of 2000.
47) Last but not least, we have also communicated with nonprofit groups and attorneys regarding issues related to the linked items, concerns, and discussions touched upon in this message.
Some things just take time, as Mr. Buffett has said.
48) It seems to me that given MHI and certain of their key members (example) have arguably failed to act in the best interest of the industry and/or shareholders (in the case of publicly traded companies). In doing such alleged actions and/or failures to act, that raises potential liability, does it not? Such accountability may be civil and/or criminal in nature, depending upon the issue and circumstances. Would you concur with that? Or if you disagree, on what legal grounds would you do so?
Notices:
49) If you fail to properly and timely reply to this, it is our intention to proceed with such a plan for a unique, satirical, and fact-check website(s) dedicated to the behavior and performance of MHI and/or specific MHI member companies and/or individuals. Should you fail to reply – which is a right that we respect – and then should you later instigate any form of litigation or claims whatsoever, it would be our intention to retain a law firm on a contingency basis that would defend and countersue for damages. As a result of that process, we would then via discovery be able to obtain anything that we’ve requested herein, previously asked for, other items of interest, and that otherwise may be relevant that you have not provided as requested. That would include, but not be limited to, items that relate to allegations of RICO violations, blacklisting, etc.
50) I’m offering 5 business days for MHI, and/or key MHI members, and/or their counsel to reply with any well-reasoned legal basis or argument that would explain why such proposed separate website(s) might be barred by law in the United States. We are hereby asking each MHI connected person to provide that information requested herein.
51) Let’s presume you do reply. In that instance, if you believe and can successfully demonstrate with objective case and legal materials why it such a satirical/fact-check website might be barred by law in the United States for valid legal reasons, then the following question will be asked. Is there in that case a reason why such a fact-check and satirical website(s) with the proper disclosures – if built and hosted in a nation other than the United States also impacted by such a legal rationale?
Bear in mind that we will advise the industry of our thinking on this topic and those noted herein by publishing this message to you.
Please reply by email in the timeline allotted. Given the years of communications on such matters, you must surely be waiting for a message like this one.
Thank you. Sincerely,
Tony
L. A. ‘Tony’ Kovach
Former MHI Suppliers Division Board Member and
Managing Member
LifeStyle Factory Homes, LLC
Publisher of DBAs MHProNews.com and MHLivingNews.com, and other internet properties.
— End of extended quote from letter to MHI leaders. —
There is more to come.
Stay tuned.
That’s our afternoon installment of manufactured home “Industry News, Tips, and Views Pros Can Use” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)
Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. Connect with us on LinkedIn here and here.
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