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Junk science and junk bonds

by Donald Prothero, Nov 20 2013

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In previous posts, I’ve written about creationist Ken Ham’s efforts to get an “Ark Encounter” theme park built near his Creation “Museum” in Petersburg, Kentucky. When it was first announced, they promised to make it the Seventh Wonder of the World, and even the Governor and State Legislature of Kentucky agreed to tax breaks and new roads to help them out. The Ark model will just be the centerpiece of a huge amusement park to sucker in the rubes. According to Mark Joseph Stern, writing for Slate.com:

Like most of Ham’s projects, Ark Encounter promises to be a heady combination of hands-on fun, perverse indoctrination, and apocalyptic terror. According to Ham’s fundraising newsletters, the ark itself will contain three levels of “edu-tainment” about Noah’s menagerie—which, as noted in his magnum opus Dinosaurs of Eden, included every species of dinosaur, even T. Rex. (How did they fit? As always, Ham has an answer: “When it came to the very few dinosaur kinds that grew to a very large size, God probably sent ‘teenagers,’ NOT ‘fully grown adults’ on the Ark.”) The ark’s exhibits will likely follow the lead of the Creation Museum, intertwining spectacularly weird animatronicscomically idiotic sophism, and menacing warnings of cultural decay.

Families who tire of such cerebral activities can frolic in Ark Encounter’s other offerings, an ambitious collectionof “historically authentic” attractions. These will include “a tower of Babel with a 5D [sic] theater, a ride through the plagues of Egypt, a First Century village, drama theaters, a pre-flood village, [and an] amphitheater.” Budding zoologists can visit the petting zoo, a walk-through aviary, or live animal programs. (We’re a little too late for a live dinosaur show, though—in Ham’s world, humans hunted them to extinction literally hundreds of years ago, “for food or skins.”) It won’t be all fun and games at Ark Encounter. The ark, to Ham, is a symbol of end times, of the divine punishment humans face when we challenge God’s authority. The ark, Ham claims on the Answers in Genesis website, “was also a visual warning of the condemnation that was coming—a judgment of those who had rebelled and would not turn their hearts to God.”

Sound familiar? It does to Ham: “Why is the time right to build another Ark? Well, today there is great rebellion against God and His Word in the land. With increasing homosexual behavior and a growing acceptance of abortion, God’s hand of judgment is being seen as He withdraws the restraining influence of His Holy Spirits. [...] There is no doubt God is judging America. And one major recent sign of God’s judgment is that homosexual behavior is permeating the culture.The ark must “stand as a warning of coming judgment—to condemn those who reject God’s clear Word.” Gays, scientists, and liberals: Consider yourselves on notice. According to Ham, our current era of sin may soon be flooded by another cataclysm of divine punishment. When it arrives, those who “encounter … God’s Word” (young-earth creationists, as long as they aren’t gay) will travel through the “door of the ‘Ark’ ” to “the Lord Jesus.” Those who don’t will go to Hell—a doomsday rapture Ham feverishly anticipates.

Unfortunately, Ham’s fantasy project has run into a bit of a reality check. He’s having trouble raising money! According to Stern:

Three years after first announcing the project, he hasn’t even broken ground. The project’s first phase will require $73 million in total, and $24 million just to commence construction. (The state of Kentucky generously offered to toss in $37.5 million worth of tax breaks, though those will expire in 2014.) The next phases will require $52.6 million. Thus far, Answers in Genesis has raised $13.6 million—just 10 percent of an optimistic estimate of the total cost. For a while, Ham maintained public silence on the delay. Then, this fall, he explained the delay in a letter to Answers in Genesis donors and supporters:

In large part because of AiG’s [Answers in Genesis’] strong biblical stand against the Obamacare legislation’s mandated coverage of abortion-causing drugs, AiG pursued a change in the Ark Encounter funding structure that now includes a bond investment opportunity for you to consider. Actually, God has used this legislation for good! … [O]ur stand has created an exciting opportunity for you. Now you will be able to invest in what I believe to be to be one of the most thrilling outreaches to challenge church and culture in the USA and worldwide concerning the authority of the Word of God and the saving gospel.
I asked Answers in Genesis’ CCO, Mark Looy, exactly how the Affordable Care Act hindered the group’s fundraising abilities. He explained that “we originally planned to raise the remaining funding from a private placement equity offering for Christians who met SEC required accredited investor standards.” Those who contributed would then “participate as limited equity members in an LLC, with AiG as the controlling/operating member.” But after Obamacare was upheld, the group’s lawyers believed that “Ark Encounter would be required … to provide abortifaciants (i.e., abortion-causing drugs) under its health coverage to its employees.”

Presumably, Ham and Looy are referring to the ACA’s mandated coverage for Plan B—which, in fact, is not an abortifaciant. Regardless, the mere possibility of providing contraceptive services was, Looy says, “not acceptable to us.”

That’s clever! Blame it all on Obamacare, abortion, and birth control (even though they have the facts all wrong), and naturally their right-wing flock will immediately accept this lame and false explanation! At least it keeps the sheep from noticing that Ham’s operation is losing money at the main Creation “Museum,” and cannot even reach 10% of its goals to build even a scaled-down version of the Ark Park.

But that’s not even the best part! Guess how Answers in Genesis plans to raise the money that their previous fundraising could not scare up? Creationist junk bonds! Again, according to Stern:

The solution? “A private bond offering through a 501(c)(3) that will allow us to claim the exemption to supply abortifaciants.” Under its previous financing scheme, Ark Encounter was just another LLC. Now it’s transformed itself into an official religious nonprofit, one eligible to seize the perks that come with the title. In an executive summary sent to its supporters, Answers in Genesis makes the bonds sound like a decent investment. The group is offering bonds with 7-, 11-, and 15-year maturities, at yields between 5 and 6 percent. A 7-year bond starts at $250,000, while an 11-year bond begins at $50,000. Tempting as those rates may seem, there’s a small catch. As Answers in Genesis readily admits, the bonds “are not expected to have any substantial secondary market” and are “not an obligation of AiG.” Somewhat alarmingly, the bonds are unrated, an indication that they’re extremely risky—and almost impossible to resell. High risk, higher yield: These, in essence, are creationist junk bonds.

According to Jie Yang, Professor of Finance at Georgetown University School of Business, the bonds are very high risk. In his words:

In addition to their lack of rating and a secondary market, the bonds are callable, meaning Answers in Genesis can collect on the bond at any point before it has matured. (The buyer has no such privilege.) Moreover, the bonds are secured only by the revenues and assets of the Ark Encounter project, not by Answers in Genesis itself. “Should the project be unsuccessful,” Yang notes, “AiG holds no responsibility in meeting the interest payments of these bonds and the bonds may default.” If the project falls through, in other words, investors won’t just lose their interest payments: They’ll lose their entire investment.

If you think about it, it seems appropriate. Ken Ham’s grandiose ego trip is sinking fast and needs a boost. He’s already made a living selling junk science to the masses who don’t understand what science is about. Why not fleece them with some junk bonds as well? Sadly, there will be lots of deeply religious folks with no background in finance who will respond to his pleas, and get suckered in. That’s a real tragedy….

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2 Responses to “Junk science and junk bonds”

  1. Karen says:

    “Sadly, there will be lots of deeply religious folks with no background in finance who will respond to his pleas, and get suckered in. That’s a real tragedy…”

    The thing is, I suspect at some level Ham really believes this whole project will fly, and these aren’t junk bonds because they’re backed by Jesus Christ himself. That’s the same belief that will cause his investors to lose their money. Hopefully, relatively few people are going to be bamboozled by this.

  2. Oscar Teddy says:

    Yes those are junk bonds, yes some people are going to lose money, and unfortunately they will think this is all God’s will. They will sacrifice their money, even though they might need it, for a “higher cause”. Sad.

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