CATI, Inc. is a private 501c(3) organization. CATI, Inc. is an entrepreneurial type of thing that is trying to grow businesses in the Racine County area. We have no issue with their mission.
These corporations are utilizing taxpayer money and keeping it hidden through their connection with Gateway, their status as private organizations shielding them from the Open Records laws, and through a creative block on public scrutiny of such corporation through tax documents.
Bio CATT, Inc. is in Kenosha next to the main campus. It is interesting that Gateway Technical College uses the same name for BioCATT and CATI as it does for the corporations. And they created a third corporation called BioCATT Enterprises. So when they use the term BioCATT a lot of people think they are talking about Gateway, the public buildings, and what is going on at Gateway. But they could be talking about a wholly different organization. They could be talking about CATI, Inc. or BioCATT Enterprises, or BioCATT Incorporated. So it is important to cipher through that when one of the officials at Gateway starts to talk about “BioCATT is doing this or that.” Are they talking about the building and ultimately Gateway, are they talking about BioCATT Enterprises, or are they talking abut the BioCATT Incorporated?
It should be understood that BioCATT Inc. is a 501c(3) not for profit corporation. If it make any “profit” it is supposed to turn it over the GTC.
Whereas BioCATT Enterprises is a for profit corporation created by Alan Kiel and Sam Borden to make money.
Every one of these non-profit corporation has to put out a Form 990 once a year. The Form 990 is the tax form non-profit organizations file with the IRS and it is open for public inspection. And this Form 990 has about 8 categories to it. It is a very watered down form so that you can dump a lot of things into these categories.
The key to the use of these forms is in the company’s asset structure. For instance, if you look at the CATI asset structure, they claim that there were some patents that were given to them. The value of these patents was arbitrarily set at a value convenient to the company. That value has been set at $35 million. That is a convenient figure, but it can be questioned as to how that value was achieved and whether the patents could actually be sold for that amount.
Now what does that mean for the company? How does that value affect the reporting activities of the company on its IRS Form 990. What if you say, “we have a $35 million asset here?” What that means is that on your Form 990 you do not have to report certain things. You do not have to disclose on the Form 990 any amounts given or expended by the corporation unless they exceed 2% of the assets. So by having the patents at $35 million nothing would have to be disclosed unless it hits $700,000.00.
So you can look at the Form 990’s of these corporations, but there isn’t much information there. For-profit corporations use a Form 1042 and there is even less information on that form.
I think it is important to note that although GTC technically (per the legal documents) created these corporations, GTC through its board never authorized the creation of these corporations: there was no board action taken that ever authorized the creation of these private enterprises. The corporations were incorporated by individuals. For instance Sam Borden and Alan Kiel incorporated BioCATT, Inc. without any formal approval by the Gateway Board. CATI, Inc. was incorporated by another person in Racine (not one of the principals at Gateway at the time). (It was not either Gordy Csala or Matt Wager that signed the incorporation papers. It can be certain that they managed the incorporation of the entity, but it was signed by one of the lawyers of their law firm.)
It is important to note that there was no GTC authority.
Under the agreement with BioCATT, Inc., BioCATT, Inc. can rent out any room in Gateway’s facilities and the rent revenue is retained by the private corporation.
For instance, when a company like Modine in Racine contracts to have some of their employees trained (for example computer training), they work with Tom Kuger who signs his letters that he is a division of Gateway. (BioCATT, Division of Gateway). Which he is not. He is head of a separate corporation. That company thinks they are dealing with Gateway. They send their employees to the BioCATT Building. They get the training. They are told to make the check out to BioCATT Incorporated.
The money is going into the bank account for BioCATT Incorporated. Taxpayers have no idea how that money is being spent. We do know it is not coming back to Gateway. Gateway is not getting FTE’s for it. Therefore Gateway is not getting state aids for it. It is not being counted as Gateway students. Per the record, Gateway is not training these students.
Yet they are using Gateway facilities. They are using Gateway staff. They are operating rent free, using Gateway computers.
From the October 2005 issue of UPDATE, the RTA monthly newsletter