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government road construction contracts. Both petitioner and Ms.
Jackson’s father had substantial experience in road construction.
Ms. Jackson kept petitioner’s involvement with Cities and its
projects confidential. Petitioner’s anonymity was likely
connected to Cities' ability to maintain its preferred status as
a minority or woman owned and operated business enterprise. As a
result, the documentation of Ms. Jackson’s and petitioner’s
relationship is somewhat terse. For example, there are notes and
some agreements that seem to characterize petitioner as a
creditor. One document reflects a loan of $90,000 and provides
for the repayment of $100,000. That note reflects interest to
petitioner in a discounted form for the use of his money.
Overall, notes exist for about one-third of the total amount
advanced by petitioner. In addition, no Cities stock was issued
in petitioner’s name. The few informal documents contain
references to petitioner, either as a silent partner or a partner
with a 50-percent share of profits from the government
construction contracts. Although Cities was the entity to which
the road contracts were awarded, in their agreements Ms. Jackson
and petitioner treated as their own any profits from such
contracts.
As part of petitioner’s involvement in the road contracting,
petitioner was provided with title to Cities’ machinery, and he,
in turn, leased the machinery to Cities in exchange for rent
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