A comprehensive provider…

Newtek Business Solutions (NKBS), which describes itself as a "premier provider of business services and financial products to small and medium-sized businesses throughout the United States," also does a pretty good job taking care of its top executives.  In this recent proxy filed by Newtek, the Company discloses that one of its subsidiaries, Crystal Tech Hosting, is renting its office space in Phoenix from the subsidiary’s president and CEO, Tim Uzzanti, who is also a Newtek executive.  The annual cost of this office space (exact size undisclosed) jumped from $74,000 in the 2004 proxy to $210,000 in 2005.  Further, an unaffiliated company owned by Uzzanti is leasing 200 square feet of this space at a cost of $24,000 a year.  The catch — Uzzanti’s company, Smarter Tools, is paying its rent by providing software services.  Newtek claims that Smarter Tools is actually providing services valued at more than the $24,000 annual rent — services for which Newtek paid Smarter Tools $80,000 in 2005 as opposed to just $16,000 in 2004. Need a scorecard yet?  

Other interesting related party transactions disclosed in the proxy — the Company paid $17,000 during 2005 to lease just four cubicles in a New York City office building, down from the $28K spent in 2004 for the same space.  Newtek’s landlord for this lease was a company controlled by Robert Cohen, the father-in-law of Newtek president Jeffrey Rubin.  Additionally, the Company paid the firm of Janover Rubinroit $138,000 during 2005 for financial consulting services.  Janover Rubinroit, incidentially, is 49% owned by the father-in-law and brother-in-law of recently departed CFO Brian Wasserman. 

Ironically, financial consulting is among the "business services" Newtek claims to provide.