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- 09/23/15--02:00: _Catholic super PAC ...
- 09/23/15--02:01: _Hedge funds get che...
- 09/25/15--10:35: _Salary only part of...
- 09/25/15--10:00: _S.C. governor plays...
- 09/25/15--10:39: _Capitol Gains: S.C....
- 09/25/15--12:00: _Shop on Amazon.com,...
- 09/27/15--02:46: _Center wins two Onl...
- 09/28/15--02:00: _Presidential candid...
- 09/28/15--11:50: _Test your money-in-...
- 09/28/15--16:09: _FEC employees: a be...
- 09/29/15--02:00: _Cell phone lobby wi...
- 09/29/15--11:34: _FEC to hackers: We'...
- 09/29/15--12:24: _'Sweeping reforms' ...
- 09/30/15--14:24: _Shift billions in p...
- 09/30/15--15:03: _Johns Hopkins termi...
- 10/01/15--02:00: _2015 state ad wars ...
- 10/01/15--02:00: _Who’s trying to inf...
- 10/01/15--02:02: _Outside groups play...
- 10/01/15--11:34: _Clean-air advocates...
- 10/01/15--14:36: _Bipartisan alliance...
- 09/23/15--02:00: Catholic super PAC bides time as Pope Francis visits Washington
- 09/23/15--02:01: Hedge funds get cheap homes, homeowners get the boot
- 09/25/15--10:35: Salary only part of S.C. lawmakers’ compensation
- 09/25/15--10:00: S.C. governor plays political football
- 09/25/15--10:39: Capitol Gains: S.C. politicians use office to pad pockets
- Rep. Rick Quinn, R-Cayce, poured more than $105,000 into his own company and his father’s since 2009, accounting for nearly 80 percent of the campaign funds he spent.
- Democratic Rep. Gilda Cobb-Hunter of Orangeburg spent $4,500 in campaign cash to buy drawings and prints by her husband, an artist.
- Former House Majority Leader Jim Merrill of Daniel Island earned more than $215,000 from fellow lawmakers who in many cases simply described the Republican’s public relations work as “campaign expense,” “consulting” or “mail.”
- When candidates ran afoul of ethics laws, at least 26 used campaign money to pay their fines.
- As with Clemmons, Rep. Michael Pitts, a Republican from Laurens on the House Ethics Committee, also enjoyed trips out West, spending nearly $6,000 jetting to Alaska, Oregon, South Dakota and Montana to hobnob with “sportsmen legislators.” Pitts said the summits were “mostly business” concerning hunting and fishing laws and initiatives. But photos from these events show Pitts and others proudly posing with freshly killed pheasants and other game.
“You do get an opportunity to do something while you’re there,” Pitts said of the hunting junkets. “The goal there is for the state hosting it to show off their natural resources. But that’s absolutely not the focus of (the trips).”
- Rep. Bill Sandifer III, R-Seneca, dipped into his campaign war chest to pay about $6,000 for charter plane “air taxis.”
- State Treasurer Curtis Loftis, a Republican, paid three parking tickets, saving him $35. Loftis did not return calls seeking comment.
- State Senate President Pro Tempore Hugh Leatherman spent more than $109,000 between August 2009 and August 2015 on presents, describing them with labels such as “constituent gifts,” “Christmas ornaments” and “constituent flowers.” Leatherman is on the Senate Ethics Committee. “He has given Christmas ornaments to constituents for years, and frankly, they look forward to receiving them,” said Robby Dawkins, the Florence Republican’s chief of staff.
- Cobb-Hunter reported giving constituents more than $3,600 in jewelry bought from an Orangeburg shop. She said she presented pins, earrings and necklaces to campaign workers and other supporters to show her thanks at Christmas, graduations and other special times.
- Kent Williams, the senator from Marion, spent more than $7,000 on football tickets to Clemson University, the University of South Carolina, South Carolina State and Benedict College games. He said he distributes the tickets to youths and campaign volunteers.
- Between 2011 and 2014, Clemson board members, alumni and others gave Gov. Nikki Haley more than $116,000 worth of football tickets, which appears to be allowed under state rules.
- The Myrtle Beach Chamber of Commerce gave more than $16,000 in gifts to 39 lawmakers and other state candidates. Those included corkscrews, tumblers, wine holders and thousands of dollars in food and lodging.
- State Sen. Vincent Sheheen, a Democrat from Camden, and at least five other lawmakers flew to Turkey — $7,000 trips provided by South Carolina Dialogue Foundation, since renamed the Atlantic Institute-South Carolina, and unspecified Turkish sponsors. The group’s purpose is to increase dialogue and ties between the United States and Turkey. Its origins are in the Movement, which characterizes itself as a transnational network of moderate, pacifist Islamic organizations. Sheheen, who twice ran unsuccessfully for governor, said in an interview that trips such as these help broaden the horizons of state leaders. He did not respond to follow-up questions about the trips’ sponsors.
- The Heritage Classic Foundation gave at least $47,000 worth of gifts — mostly tickets to the golf tournament it sponsors. The state began subsidizing the golf tournament after Verizon dropped its sponsorship in 2011.
- 09/25/15--12:00: Shop on Amazon.com, help elect Bernie Sanders?
- 09/27/15--02:46: Center wins two Online Journalism Awards
- 09/28/15--02:00: Presidential candidates in fantasy land over health care
- 09/28/15--11:50: Test your money-in-politics IQ
- 09/28/15--16:09: FEC employees: a bedraggled lot
- 09/29/15--02:00: Cell phone lobby win means 'more people will die'
- Within two years, wireless carriers would have to provide the location of a 911 call from indoors to within 50 meters 67 percent of the time. Within five years, carriers would have to deliver that level of accuracy for 80 percent of all indoor calls.
- Within three years, carriers would be required to provide the vertical location, such as a floor in a building, of a wireless caller to within three meters 67 percent of the time and 80 percent of the time within five years.
- 09/29/15--11:34: FEC to hackers: We're ready this time if government shuts down
- 09/29/15--12:24: 'Sweeping reforms' proposed for black lung benefit program
- 09/30/15--15:03: Johns Hopkins terminates black lung program
- 10/01/15--02:00: 2015 state ad wars tracker
- 10/01/15--02:00: Who’s trying to influence the 2015 elections?
- 10/01/15--02:02: Outside groups playing bigger role in 2015 state elections
- 10/01/15--11:34: Clean-air advocates upset with EPA ozone decision
Pope Francis’s first visit to the United States has already ignited political passions in the nation’s capital.
But the nation’s most prominent Catholic super PAC is keeping a decidedly low profile as the pontiff visits the White House on Wednesday and U.S. Capitol on Thursday.
Officials with CatholicVote.org Candidate Fund, a super PAC affiliated with Chicago-based nonprofit group CatholicVote.org, say they’re waiting until the 2016 election season is further along before they actively raise and spend money.
When CatholicVote.org Candidate Fund does spool up its 2016 efforts, Republicans are almost certain to earn the support of the super PAC.
Democratic presidential hopefuls Bernie Sanders and Hillary Clinton are not suitable candidates for Catholic voters given their stances on abortion, said Josh Mercer, political director of CatholicVote.org.
Vice President Joe Biden — a devout Catholic and potential candidate — won’t receive an endorsement from CatholicVote.org, either, Mercer said.
“It’s one thing for a candidate to support abortion,” Mercer said. “But it’s another thing when they claim to speak for Catholics.”
Biden recently spoke with “The Late Show” host Stephen Colbert about maintaining his Catholic faith following the death of his son Beau Biden.
Which GOP presidential candidate will the super PAC support? CatholicVote.org Candidate Fund hasn’t yet decided, Mercer said.
Mercer said abortion and religious freedom are issues CatholicVote.org will focus on ahead of 2016, and that the super PAC, which formed in 2011 and may raise and spend unlimited amounts of money, will not be used exclusively in the presidential race.
“There are very big state races that are just as important,” Mercer said. “The goal is also to put the Senate in pro-life hands.”
Although a notable political player, this group of lay-led Catholics isn’t the only voice in the 2016 choir.
The presidential election alone is already rife with religious undertones, as evident during the Sept. 16 Republican presidential debate, where candidates faced off on the right of Kim Davis, a county clerk in Kentucky, to deny same-sex couples marriage licenses on the basis of her religious beliefs.
Two pro-Bobby Jindal operations — the American Future Project and Believe Again — put religious freedom front and center of their ads. Believe Again, a super PAC, spent $293,000 this week on ads in which Jindal, Louisiana’s governor, tells the story of his religious conversion from Hinduism to Christianity.
Meanwhile Sen. Ted Cruz’s campaign has asked supporters to “sacrifice” money to his campaign. He’s also released ads that draw on his faith.
Ahead of Pope Francis’ visit to Washington, D.C., groups closely connected to the Catholic church have also been lobbying Congress on a variety of policy issues.
The National Republican Campaign Committee also endeavored to build its supporter list by urging people to “sign” an electronic card welcoming Pope Francis.
Though CatholicVote.org touts its nonpartisanship, the super PAC has previously made sizable expenditures in support of Republicans.
The super PAC raised $476,000 during 2012, spending more than half of that money on messages that either supported Republican Mitt Romney’s failed presidential run or criticized President Barack Obama.
More recently, the super PAC spent a more modest $6,000 in 2014 to boost four congressional Republican candidates, including Rep. Alex Mooney, R-W. Va.
The super PAC also supported three failed Republican campaigns: Kirk Jorgensen of California, Jim Tracy of Tennessee and Francisco “Quico” Canseco of Texas.
It had about $99,000 left in its coffer as of June 30, according to filings with the Federal Election Commission.
Ads sponsored by CatholicVote.org in 2012 focused on issues as well as political candidates.
One ad — it criticized Obamacare for requiring employers to cover contraceptives in company healthcare — features Michigan businessman John C. Kennedy, chief executive officer and president of Autocam Corp.
Julius Uwansc was in trouble with his mortgage after refinancing in 2009, just after the real estate bubble popped. Like millions of others, he found himself owing more on his house than it was worth.
The Nigerian-born father of four moved into his house on Richardson Road in Gwynn Oak, Maryland, in 2005. “We loved it because it has this big yard where the kids can play,” Uwansc says.
But soon after closing on the loan, Uwansc began having trouble making payments. He believed he had worked out a loan modification with Bank of America in 2011 after signing paperwork, but the bank disputed the terms Uwansc thought he had secured. When he didn’t pay the amount the bank said he owed, it claimed he was in default.
Uwansc’s mortgage was insured by the Federal Housing Administration, meaning if he failed to make payments, the bank would typically be paid the full value of what was left of the mortgage, plus costs associated with servicing the debt.
Bank of America filed for a claim and received payment. The mortgage was then transferred to the Department of Housing and Urban Development, which oversees the FHA.
Normally at this point, instead of taking over the mortgage, HUD regulations would require the bank to work with the borrower during a pre-foreclosure stage. If there’s no way to keep the homeowner in the home, HUD shepherds the property through the foreclosure process.
But not in this case.
Seven years after the real estate market crashed and took the economy down with it, major investors are again buying mortgages by the thousands. But instead of dealing with shady subprime lenders, they are buying many of those same shaky loans from the government — at a significant discount.
Under a special government program, in December 2013, HUD sold Uwansc’s mortgage along with 802 others to a fund created by Oaktree Capital, a hedge fund.
It was a great deal for Oaktree. The fund bought the pool of mortgages for about two-thirds of the $105.7 million HUD estimated the homes were worth. Uwansc, who now faces foreclosure through the new servicer of the loan, Selene Finance, was unaware that any of this had transpired.
“Whatever deal that went on between Bank of America, Selene and HUD is not known to me,” he says. Uwansc maintains he has complied with the terms of his modification and has filed lawsuits against both Bank of America and Selene.
HUD has sold thousands of mortgages this way. The idea is to shore up FHA’s hemorrhaging finances and give borrowers some breathing room to work things out with a new mortgage-holder so the loans will start “re-performing,” as HUD puts it.
But some housing advocates claim that only the first goal seems to have been met. They claim that HUD, tasked with creating strong communities and affordable housing, is instead primarily facilitating a massive wealth transfer, with thousands of homes going from distressed borrowers to wealthy investors simply looking to profit. Fannie Mae and Freddie Mac, who together with HUD directly or indirectly insure 70 percent of the country’s mortgages, began similar sales this summer.
In 2010, HUD launched the mortgage sales program — now known as the Distressed Asset Stabilization Program, or DASP — under intense pressure from Congress to improve its finances. HUD can’t reduce the principal owed on mortgages it holds for homeowners, but it can sell the mortgages in bulk to investors at a steep discount — at times as little as 41 percent of the mortgages’ collective value.
The agency, through the FHA, insures loans to lower-income and first-time homebuyers. During the 2008 financial crisis and subsequent recession, many of those homeowners fell behind on their mortgage payments and foreclosures loomed.
Meanwhile, the FHA, due to an onslaught of claims, was desperately in need of a funding infusion.
The DASP program has a dual purpose: to lessen the impact of FHA insurance claims on defaulted mortgages on HUD’s finances, and according to a statement in April by Genger Charles, then the acting commissioner of HUD’s Office of Housing, to provide borrowers “a second chance at avoiding foreclosure.” Through DASP, lenders cash in on an FHA insurance claim on mortgages that are at least six months delinquent and HUD takes ownership of the mortgages. HUD then sells those mortgages to the highest bidder in bulk auctions.
Over 98,000 loans have been funneled through the DASP system since it began in 2010, with mortgages amounting to more than $16.7 billion in total debt.
The sales have helped the FHA insurance fund become solvent. According to an analysis of HUD’s sales results by the Center for Public Integrity, buyers have paid HUD $11.2 billion over the course of these auctions. The fund currently holds $4.8 billion, after being $16 billion in the red two years ago.
But when it comes to helping homeowners avoid foreclosure, the results are unimpressive. The program, it was hoped, would help homeowners because the investors who bought the loans were expected to offer better terms to borrowers. As part of the initiative, HUD included a stipulation that buyers must wait six months (it has since been bumped up to a full year) to foreclose to allow borrowers a chance to work with their new creditors.
“Once we sell [the mortgage] for something less than the principal balance,” explains HUD spokesperson Brian Sullivan, the lender “has more room to work with the homeowner.”
But the new owners of these mortgages are more likely to flip the homes for a profit or take advantage of the booming rental market, say some advocates. The transactions may make good financial sense, but they can leave struggling homeowners like Julius Uwansc in the dark, and in some cases on the streets.
“The investors are there to make money,” says Diane Cippalone, a mortgage servicing consultant to the National Fair Housing Alliance, a nonprofit organization. “They are not there to do neighborhood revitalization or neighborhood stabilization.
A quarterly report on the program from 2014 reported that 11 percent of borrowers were making payments — meaning the homeowners were still in their homes — after their mortgage was sold through DASP. HUD calls these loans “re-performing.”
But even that paltry success rate is questionable. The definition of “re-performing” is “fairly loose,” says Geoffry Walsh, a staff attorney at the National Consumer Law Center. As HUD defines it, re-performing means payments were received for six months after the sale. “It doesn’t mean that anybody determined what is affordable to the homeowner, just that the buyer was able to extract six monthly payments from the borrower,” he continues.
HUD’s post-sale reports show that 6,427 mortgages, or 16.9 percent of those sold between 2010 and 2013, have successfully avoided foreclosure. But this includes third-party sales or other methods that still result in a homeowner ending up without a home. Only 5.4 percent of the loans sold during that same period were performing.
The amount of principal reductions actually offered to homeowners under the program by the new mortgage owners is unknown. HUD does not require new servicers to report the types of loan modifications given, and it did not respond to questions about reporting requirements.
HUD points to dramatic declines in FHA foreclosures as evidence that the market may be returning to pre-crisis stability. But by selling loans right before the foreclosure process begins, Daren Blomquist, the vice president of RealtyTrac, says HUD may be using DASP to create “ghost inventories” where foreclosures are still likely—they just aren’t immediately visible on the record books.
“This process of selling loans, aside from whether it’s working, it has the added bonus of making the foreclosure numbers look better in the short term,” says Blomquist.
FHA’s insurance fund was depleted when millions of homeowners defaulted on their mortgages during the recent recession. Meanwhile, Wall Street investors developed a thirst for non-performing loans, and DASP was an opportunity to unload mortgages while satisfying that thirst.
These non-performing loans appeal to investors because they are bought at a steep discount.
“There’s a substantial amount of profit to be made whether you go to resell those homes, or take a more humanistic approach and convert these loans to performing,” said Jack McCabe, who consults with investors on the real estate market.
In a February, 2014 report for the Federal Reserve Bank of San Francisco, FHA Commissioner Carole Galante calls DASP “a win-win-win situation for all involved”: The FHA washes its hands of bad mortgages, the investor gets a valuable asset, and homeowners stand to benefit from more affordable loan terms from the new buyer.
But consider the December 2013 sale of Julius Uwansc’s mortgage. Oaktree paid $68.6 million for the 803 Baltimore mortgages, about 65 percent of the $105.7 million HUD says they were worth. That means even if the company doesn’t collect a dime on any of the mortgages, even after legal fees and other expenses, it can more than make its money back by foreclosing and selling the homes. (Oaktree declined to comment on the outcomes of loans bought through DASP.)
Many of the loans sold through DASP are indeed close to foreclosure, and many have already started the process. But HUD apparently thought it had put some brakes on the incentive to quickly foreclose and sell the homes with that stipulation that buyers wait six months to foreclose and try to work things out with the borrowers.
Depending on secrecy
FHA loans by law offer extra protections against foreclosure. In order to obtain that FHA insurance, a loan servicer, the company that collects payments and administers the loan, must make a series of efforts to modify loan terms to help owners keep their homes.
A lender can file a claim and turn the loan over to HUD for sale only when all these efforts have failed. The loans in DASP, according to HUD spokesman Sullivan, “are all headed to foreclosure — 100 percent of them — because they’ve exhausted their loss-mitigation options.”
But legal advocates and several borrowers say they have seen otherwise. The original lender reports that they’ve taken all the necessary steps, and HUD essentially takes their word for it, says the NCLC’s Geoff Walsh. “We’re hearing from a lot of homeowners that were still involved in loss mitigation,” he says, and could avoid foreclosure through normal FHA pathways.
Uwansc says he had no idea his mortgage was up for sale. Walsh says, “The program depends on secrecy. The program depends on the homeowner not knowing that their loan is being sold.”
Walsh says if borrowers are notified that their loan may be sold they can advocate for better terms under FHA protection, before the sale to new creditors without such stipulations. So far, he adds, HUD has rebuffed requests that borrowers be informed of their position before the sale.
The history of Uwansc’s loan intertwines with the confusion that followed the financial collapses of 2008. After refinancing in 2009, Uwansc’s lender was Countrywide Financial, the nation’s largest subprime lender at the time. Countrywide was bought by Bank of America, which assumed its loan portfolio.
Bank of America approved Uwansc for a trial loan modification in 2011, but the bank disputed its validity. An offer of a permanent loan modification claimed he was in default, despite the fact he never missed a payment during the trial period, Uwansc said. Bank of America declined to comment on the case, but says in court documents he signed the loan modification paperwork but with alterations, making the contract invalid. He was able to make payments during the trial period under the new terms. The bank, however, held him responsible for the original mortgage terms, and claimed he owed as much as $37,000. Meanwhile, a letter from Bank of America’s “Office of the CEO and President” assured Uwansc he was current with his payments and explained that notices of debt were standard procedure that would be corrected once his modification was finalized.
Uwansc says he doesn’t remember altering the first contract, but the bank sent another set of documents, still claiming Uwansc had defaulted on the his mortgage. Despite the default language, he signed the contract. Bank of America acknowledges receiving the signed agreement needed to finalize the modification, this time with no alterations. A few months later, Uwansc’s mortgage ended up on HUD’s auction block for distressed loans, even though Uwansc and people inside Bank of America thought it was current.
Months after that, Uwansc’s loan was sold through DASP to DC Residential IV, a fund created by the hedge fund firm Oaktree Capital to buy loans from HUD. The servicer hired to collect payments is Selene Finance, whose investors include Lewis Ranieri, one of the pioneers of mortgage securitization.
Selene treated the Uwansc mortgage as in default, and Uwansc alleges in a complaint against Selene in a Maryland Circuit Court that it “continued to threaten him with foreclosure and it never conducted any reasonable investigation” into the mortgage.
“The first discussion that took place between me and Selene wasn’t cordial at all,” says Uwansc. “They didn’t want to hear from me. All they wanted to know was when I was going to pay…. I knew from the word go that I have not defaulted in any way.”
Selene declined to comment for this article. In sworn testimony a representative said Selene was unaware of the loan modification, but paperwork presented in that same testimony showed Uwansc made Selene aware of the issue as early as March 6, 2014.
In the lawsuit, Uwansc explained how he wrote to Selene to formally request that it correct its records and included a copy of his final modification as proof that he had, in fact, been making the payments required.
Selene never recognized the modification and, operating off the terms of his original mortgage from 2009, stopped accepting his payments in December of 2014 and notified him of its intent to foreclose if his family didn’t pay the entire balance of his loan plus interest and fees, adding up to as much as $217,479. Uwansc’s lawsuits against Bank of America and Selene are still pending, but if Selene succeeds in foreclosing, Oaktree will own a home that was valued at $250,000 in 2009.
‘The right solutions’
HUD has announced changes to its latest rounds of sales meant to address criticism from consumer advocates. In addition to requiring new servicers to evaluate borrowers for modification programs similar to those offered by the government, HUD says it will also strengthen the requirements for loans sold through pools specifically targeted to help neighborhoods with a rash of foreclosures. HUD will also offer smaller pools to incentivize more nonprofits to buy in. Currently just 2 percent of the mortgages sold through DASP have gone to nonprofits. Buyers must now wait one year to complete the foreclosure process on newly acquired loans, double the six-month moratorium in place from 2010-2014.
“These changes reflect our desire to make improvements that encourage investors to work with delinquent borrowers to find the right solutions for dealing with the potential loss of their home,” explained Charles, the temporary FHA chief at the time.
Servicers flocking to DASP, however, have many tools to meet HUD’s re-performing benchmarks and still ensure a quick foreclosure once the one-year waiting period is over. Phillip Robinson is a lawyer with the Maryland Consumer Law Center and represents Julius Uwansc. Robinson says other clients have been offered loan modifications with the provision that they offer interior inspections of the home, something Robinson says he has only seen with loans sold through DASP. “The reason they want interior inspection is that they want to get an idea if they can make money off foreclosing,” says Robinson. “They’re not looking to modify and certainly not looking to do principal reductions.”
Other loan modification offers made by servicers on behalf of DASP buyers look like a good deal for homeowners looking for smaller payments immediately, but dig a hole too large to climb out once a trial payment period is over. Many modification offers from DASP buyers create a large “balloon payment” due after the trial period while permanent changes are under consideration, or are contingent on an up-front payment, a practice which wouldn’t be allowed if the mortgages were still under the protection of FHA regulations.
Diane Cippalone has collected about 20 examples of these modifications. “Its completely unrealistic to ask someone who’s had a financial mishap to think that they could have in the meantime saved thousands of dollars to pay the up-front amounts to the servicers,” Cippalone says.
No help from HUD
That’s the kind of modification offered to Sandy Lopaz.
Lopaz bought her home in Cinnaminson, New Jersey, in 1987, and refinanced in 2008. She lost her job later the next year and asked Chase Home Finance for a loan modification.
Around this time, both Lopaz’s parents were in failing health. Her daughter was suffering through a “mystery diagnosis” that took three years to sort out. Under these circumstances, Lopaz filed for bankruptcy in 2011. In a letter to the Consumer Financial Protection Bureau, Lopaz says Chase didn’t pursue foreclosure because they couldn’t prove they owned her mortgage at the time. She wrote a letter to HUD detailing the problems with her mortgage to that point, asking them to hold off on paying an FHA claim until the issues were resolved. “I applied for a dozen modifications, and begged HUD to investigate,” she says.
Chase sent Lopaz a notice of foreclosure in 2012, but later gave the mortgage to HUD in exchange for a $190,356.49 insurance claim. On October 30, 2013 HUD auctioned her mortgage through DASP. LVS Title Trust I, a fund started by PIMCO but administered by US Bank, placed the winning bid. Her new servicer, BSI, denied Lopaz’s requests for loan modifications that would include principal reductions.
US Bank filed for foreclosure in June and then in September offered Lopaz a modification. A New Jersey court held a mediation session with Lopaz and the law firm handling her foreclosure case by phone. A summary of that conversation, prepared by a court officer, says the new plan would lead to a balloon payment of over $70,000. “That’s financial suicide,” says Lopaz. “I want to save my home, I don’t want to make a few payments then go into foreclosure again.” She rejected the offer.
Her mortgage was sold to a new trust in March, MART Legal Trust 2015-NPL1, with UMB Bank as a trustee. BSI still services the loan, and according to emails from that company as recently as April, Lopaz still faces an open foreclosure case. BSI said it could not comment on specific mortgages without a release waiver signed. Lopaz signed the waiver, but BSI has yet to respond to requests for an interview.
“I put my kitchen cabinets together from kits when I was eight months pregnant,” Lopaz says. “I know I paid so much more than these people and they are trying to paint me out to be the deadbeat.”
The tip of the iceberg
While Lopaz waits for another day in foreclosure court, HUD continues selling non-performing loans. Their latest round of bidding on July 16, HUD put 7,837 mortgages up for auction with an unpaid principal balance of over $1.37 billion. Fannie Mae and Freddie Mac, two government entities that hold the rights to many more mortgages, have also begun similar programs. Fannie Mae announced the winners of its latest bid on August 20. The highest bidders bought $767 million in unpaid mortgages, about 3,900 loans. Freddie Mac announced a similar sale, $591 million in mortgages totaling 3,577, in July, following a larger sale in March.
“The goal of non-performing loans sales is to be able to offer borrowers additional options to avoid foreclosure, while also reducing the number of seriously delinquent loans in Fannie Mae’s portfolio,” Joy Cianci, Fannie Mae’s senior vice president for credit portfolio management explained in the announcement. The justification for these sales is similar to HUD’s own reasoning that offers no real help to homeowners like Julius Uwansc.
Some legal experts say the requirements for these sales are stricter than the HUD auctions. Considering Fannie Mae and Freddie Mac guarantee nearly half the country’s single family mortgages as of 2014, the sales represent an opportunity for investors to grab an even larger share of the housing market.“This is becoming a significant force in the mortgage market,” Steven Sharpe, an attorney with the Legal Aid Society of Southwest Ohio.
Sharpe says HUD has two obligations. “One is to strengthen homeownership, and two is to do so in a way that bears in mind the fund.” For that reason, housing advocates say programs like DASP need to make sure borrowers voices are heard before, and that mortgage lenders are held accountable after the sale. As Sharpe puts it, “avoiding unnecessary foreclosures is good for everyone.”
Alison Fitzgerald contributed to this report
Look up the annual pay South Carolina’s part-time House and Senate members receive, and you’ll likely find this misleading amount: $10,400.
All House and Senate members are paid more than double that amount and many receive closer to four times that much, with most of the income coming in the form of $1,000-a-month payments for “in-district expenses” that are, in fact, treated as taxable income and are counted toward lawmakers’ pensions.
So, they really receive $22,400 as a baseline, with the House speaker and Senate president receiving an extra $11,000. Then lawmakers are paid another $140 each day the Legislature is in session, which is worth roughly $8,000 to $10,000 more per year. The session is roughly five months, running from early January to the first Thursday in June.
The $140-per-day payments are called per-diems or subsistence payments, rather than compensation. That money is described as a subsistence payment to cover meals and lodging, but lawmakers receive it regardless of where they live, regardless of actual expenses. If the daily payments were considered compensation, however, that could run afoul of the state Constitution, which says “members of the General Assembly shall not receive any compensation for more than forty days of any one session.”
The salary, in-district expenses and per-diem money add up to about $30,000. Then lawmakers get an extra $600 if they head any of the more than two dozen committees, $600 for postage and mileage money for one round-trip to Columbia each week of the session — roughly $120 per trip for a Charleston-area lawmaker. Some also receive thousands of dollars from counties that don’t provide office space and staff for the delegation.
Add it all up and the typical House or Senate member takes home roughly $30,000 to $35,000 from the state — about triple the official salary – on top of whatever they earn in their day jobs. Charleston-area Sen. Larry Grooms, for example, reported state income of $35,032 for 2015.
Finally, lawmakers elected before 2012 enjoy generous pensions, far more valuable than other state employees receive. Lawmakers eligible to collect those pensions can claim them instead of their smaller $10,400 salaries, while still collecting the $12,000 for in-district expenses and the per diem payments.
For example, Sen. Hugh Leatherman in March reported income of $67,346 related to his legislative duties, with $36,149 from the retirement system accounting for more than half. The pension rules were changed for those elected in 2012 or later in response to the state’s pension fund shortfall, giving recently-elected lawmakers benefits similar to other retirement system participants.
This story was jointly produced by The Post and Courier and the Center for Public Integrity.
South Carolina Gov. Nikki Haley received an estimated $380,000 worth of free football passes to University of South Carolina and Clemson University football games during her first four years as governor — and the state says there’s nothing wrong with that.
Despite the amount, and the fact that both universities lobby hard for state dollars every year, the Republican governor received a seal of approval from the state ethics commission last week after The Post and Courier and the Center for Public Integrity raised the issue with the governor’s office.
Both USC and Clemson are classified under ethics laws as “lobbyist’s principals,” which means they pay lobbyists to court lawmakers and other state officials to get support for their budgets and initiatives. As such, they can’t give state officials any gift valued at more than $60 a day, up to $480 per year — including football tickets.
Still, the state’s ethics rules leave ways of getting around those limits.
In the case of USC, Haley was provided use of a “suite” at Williams-Brice Stadium. It’s not clear exactly what that suite is worth, but the school advertises other suites as having indoor lounge seating, sliding windows, private restrooms, a sink, a refrigerator and high-definition television monitors — currently leased for $66,000 a year.
Such a gift would far exceed the limit, but Haley did not report the suite as a gift because, her staff explained, it is given to the governor’s office, not to her specifically, for use in economic recruitment and other state business. So therefore, neither limits nor disclosure requirements apply.
When asked about the suite, the governor’s office sought a ruling by the South Carolina Ethics Commission. Haley’s chief legal counsel, Holly G. Pisarik, argued in a letter to its executive director, Herb Hayden, that the football suite and tickets are an agency-to-agency arrangement for the benefit of the state, one that’s existed “for decades and spanning many administrations.”
Ethics Commission attorney Michael Burchstead told the Associated Press that it was a “close question.”
But the commission ruled on Sept. 16, because, after all, football season was underway, that the suite and tickets aren’t gifts to the governor as long as the use is for state purposes.
In addition to the generosity accorded the governor by the Gamecocks, Haley also received more than $116,300 in free access to Clemson University football suites between 2011 and 2014, according to her state ethics filings. Such a big number would also appear to violate limits.
But in this case, Clemson Tiger trustees and fans, not the university, provided Haley with use of a suite for the team’s home games. Those individuals do not face the same limits as the school — despite the fact that trustees each receive four free tickets from the school to every home game.
“We adopted the practice several years ago in the interest of transparency and to assure the public that the box was not being funded with public dollars,” Clemson spokeswoman Cathy Sams said.
South Carolina elected officials and candidates have what amounts to a personal ATM that dispensed nearly $100 million since 2009 for such things as car repairs, football tickets, male-enhancement pills, GoPro cameras, overseas junkets and gasoline.
A joint investigation by The Center for Public Integrity and The Post and Courier also found state lawmakers and candidates used this cash machine to hire their own companies, pay parking tickets, purchase an AARP membership — and even buy a used BMW convertible for “parades.”
The money funding this political cash machine comes from candidates’ campaign accounts, reimbursements from state government and outright gifts from special interests.
The inner workings of this cash network typically remain hidden unless prosecutors subpoena questionable receipts and other evidence locked away from public view, as happened in the case of ex-House Speaker Bobby Harrell.
The Republican’s conviction last year for misusing campaign money to pay for his private plane left many in the state capital wondering whether other lawmakers would be charged. At least one active criminal investigation is underway, and a handful of lawmakers have been mentioned in a State Law Enforcement Division report.
Amid this backdrop, The Post and Courier/Center for Public Integrity’s investigation found questionable spending under the state’s ethics laws to be pervasive and unrelated to party affiliation or geography. The investigation raises fresh questions about the shadowy ways candidates and elected officials spend money. Consider:
Longtime critics of the state’s ethics rules say the system is flawed and designed to protect cozy relationships and influence-peddling. Lawmakers created a state Ethics Commission to enforce laws – for everyone but themselves. House and Senate lawmakers each have their own separate ethics committees to take complaints and police themselves. “We have zero jurisdiction over members of the General Assembly,” said Herb Hayden, executive director of the Ethics Commission.
To better understand spending patterns, the Center for Public Integrity and The Post and Courier analyzed public records of more than 100,000 expenses, gifts, travel and reimbursements (search the candidates' expenditures here).
Taken together, this information provides the most comprehensive look yet at how state elected officials and candidates spent and received millions of dollars over the past seven years. It exposes how lawmakers and candidates cloak expenditures with vague terms such as “travel,” “unknown” and “incidentals.” It shows how they follow a murky ethics rulebook that allows nearly unlimited spending.
To be sure, many lawmakers fulfill their public duties with honesty and without milking their campaign accounts and other sources. The Post and Courier/Center for Public Integrity investigation found that many expenditures, reimbursements and gifts were perfectly appropriate transactions related to campaigning, policy exploration and simple expenses related to being in the public eye. Others were legal but of questionable judgment. And some appeared to cross clear ethical lines.
Murky ethics laws
At first glance, South Carolina’s ethics laws seem straightforward:
“No candidate, committee, public official, or political party may use campaign funds to defray personal expenses which are unrelated to the campaign or the office if the candidate is an officeholder nor may these funds be converted to personal use.”
The laws also prohibit public officials from using their positions to “obtain an economic interest for himself, a family member, an individual with whom he is associated, or a business with which he is associated.”
In practice, candidates in South Carolina and elsewhere often stretch the boundary between what’s personal and what’s for their campaigns. Federal ethics laws, similar to those in South Carolina, allow candidates to use funds for both campaign- and office-related expenses. As in South Carolina, funds in some cases may even be used for gifts, provided that only a small amount is spent and that they are not for family members, said Paul S. Ryan, senior counsel with Campaign Legal Center, a Washington, D.C.-based nonprofit opposed to the influence of big money on local and national politics.
But many states have struggled to close loopholes in their ethics laws. About half the states surveyed in 2012 for potential corruption risks earned D’s and F’s in the Center for Public Integrity’s State Integrity Investigation. South Carolina ranked 45th out of 50, largely because of its weak regulations.
Even when legal, some expenses still might not be appropriate, said Jessica Levinson, a professor at Loyola Law School who specializes in campaign finance.
“The line should be drawn a bit more stringently to really say these are funds that were given to allow you, legislator, to get your message out to obtain voters, and these aren’t funds that were given out so that you could obtain personal perks,” said Levinson, also president of Los Angeles’ Ethics Commission. “A lot of what we’re seeing here looks more like personal perks than bona fide governmental or legislative purposes.”
Consider transactions by Rep. Alan Clemmons, a Republican real estate lawyer from Myrtle Beach.
An Eagle Scout and avid hunter, Clemmons made national headlines earlier this year for sponsoring a bill to add three weeks of gun rights classes in public schools. Using a mix of campaign money and gifts, he flew to Israel in 2014 to foster ties between that country and South Carolina. He also flew to New Orleans that year to visit Port Fourchon, an offshore drilling supply port, and to the luxury Streamsong golf resort in Central Florida to discuss “legislative matters” with U.S. Rep. Dennis Ross, a Republican from Florida.
Before a trip out West in 2014, Clemmons used campaign money to buy two GoPro video cameras and a GoPro bike mount from Best Buy.
That same day, his campaign spent $107 at a Bass Pro Shops store in Myrtle Beach. In a campaign disclosure form, he described the Bass Pro Shops purchase as “campaign camping equipment.” When asked about this expenditure, Clemmons said the item was a backup battery and that the entry on his campaign form was an embarrassing mistake and should have simply said “campaign equipment.”
He used his campaign accounts to buy two hunting licenses from Utah’s Division of Wildlife Resources in the first half of 2014. Clemmons explained that he mistakenly used his campaign’s debit card and reimbursed his campaign three weeks later, after discovering the error.
Later, he used his campaign account to reimburse himself $1,753 for another trip in 2014 to New Mexico to meet U.S. Rep. Steve Pearce. Clemmons said that he and the Republican congressman from New Mexico discussed management of public lands and other unspecified legislative matters .
He and Pearce also went hunting, and a YouTube video of their trip shows them in camouflage blasting three turkeys. In response to the Post and Courier/Center for Public Integrity’s questions about those expenses, Clemmons said he had decided to reimburse his campaign $792.12.
“My additional time in New Mexico resulted in significant personal benefit and [the expenditures] are, therefore, more appropriately a personal expense,” he said in a written response.
Since 2009, Clemmons also forked over more than $25,000 for neckties and scarves from a company in Taiwan. The ties and scarves have the S.C. House Seal on the front. He said he distributed them to members of the House, a practice that he said helped cement relationships among its members and further his legislative goals. Receipts provided by Clemmons show orders for more than 1,500 ties and scarves.
Clemmons is far from alone. Other lawmakers spent campaign cash and received gifts in ways large and small. Other examples:
The state’s loose ethics laws are “a tangled mess” that make almost any expense allowable, said John Crangle, director of Common Cause South Carolina.
At one time, lobbyists provided lawmakers with cash and other freebies, but that practice ended in 1991 after the federal Operation Lost Trust corruption sting. Lost Trust led to 27 convictions and guilty pleas and fueled new ethics laws that put heavy restrictions on lobbyists.
“Now,” Crangle said, instead of lobbyist money, “you see people using campaign funds to get these freebies.”
Out one pocket, into another
Another practice that’s ripe for abuse: Lawmakers spend thousands of dollars in campaign cash to hire each other’s companies.
One beneficiary of this practice is Jim Merrill, the representative of Daniel Island, and his public relations company, Geechee Communications.
Since 2008, state lawmakers from both parties spent more than $215,000 to hire Merrill or his company. Lawmakers often describe the spending merely as “campaign expense,” “consulting” and “mail.”
In an interview, Merrill said that most people tend to take their business to people they know. If he had a toothache and he knew a dentist, he’d go to that person, he said. Same with lawmakers. “My job just happens to be direct mail.”
Other lawmakers used campaign cash to hire their own companies or those run by family members. One standout is Rick Quinn, the representative from Cayce. Since 2009, Quinn poured more than $41,000 from his campaign into Mail Marketing Strategies, which he owns. “I find myself to be the cheapest mail marketing company I can find,” he said, adding that he charges himself only “actual costs.”
In an interview, he initially said he would be “happy” to produce receipts and invoices for his company’s work. In his campaign disclosures, Quinn described his company’s work in vague terms such as “Mailing-Postage” and “District Newsletter & Postage.” Later, Quinn declined to produce his company’s invoices and receipts, writing in an email: “I have included great detail on my publicly reported ethics disclosures describing those reimbursements.” The entries on his forms, however, don’t describe specifics and costs of work done.
Quinn paid even more money — $63,000 — to Richard Quinn & Associates, a political consulting company run by his father. “If there was someone cheaper, I would use them,” Quinn said.
Quinn’s father is one of the South’s most influential GOP strategists, known for his work for such candidates as John McCain, Ronald Reagan and Strom Thurmond. In an interview, Richard Quinn said, “I can assure you that he never got RQ&A to do work that was never done. And it was usually done at cost.” He added that he had no ethical concerns about his son hiring his company: “Why not use a family member you trust?”
A similar refrain can be heard from Rep. David Hiott, who owns a printing company in Pickens. Since 2009, the Republican paid his company $8,000 for campaign materials. During this time, 14 other legislative candidates spent at least $65,000 with Hiott’s company.
“I’m the only printer in town,” Hiott said, adding that he had no ethical problems with charging himself for work. Asked whether he would produce receipts for the work he did for his own campaign, he said: “I’m not going to open my books to individuals.”
In Orangeburg, Gilda Cobb-Hunter saw no problem with using $4,500 in campaign money to buy artwork by her husband, Terry Hunter. The Democratic representative used the drawings and prints to decorate her office. “I didn’t give it a second thought because I thought it was appropriate for my office and I thought it was an allowable expenditure.”
Some lawmakers also donated campaign cash to nonprofits that they run or where their family members work. For instance, W. Brian White, a Republican representative from Anderson and chairman of the powerful House Ways and Means Committee, gave more than $9,000 in campaign cash to the nonprofit Tri-County Technical College Foundation. White’s wife, Courtney, works there as a fundraiser. His campaign also pumped nearly $10,000 into Anderson Interfaith Ministries, where White’s wife is vice chair of the board of directors. White and his wife did not return numerous phone calls and emails.
Running for office has its perks, and for many lawmakers, they include free fill-ups at the pump.
State Sen. Kent Williams of Marion often gassed up his SUV two or three times a week since 2009, spending more than $28,000 at gas stations. Asked whether he used the gas for personal trips or the campaign, the Democrat said: “Every day is an election day. People come up to me when I worship in church, when I’m eating breakfast, when I go out to lunch.”
Orangeburg Sen. John Matthews Jr., a member of the Senate Ethics Committee, was another prolific fuel purchaser, spending more than $13,400 since 2009. Through 2012, the Democrat described these transactions as “gas” purchases on his campaign disclosure forms but in 2013 began describing them instead as “incidentals.” Asked why, Matthews said: “It just fits better in my reports.” He added that the change was not related to the ethics case against former Lt. Gov. Ken Ard, a Republican who in 2012 pleaded guilty to violating state ethics laws, including a charge that he purchased gasoline for personal use.
Former Sen. John Yancey McGill, D-Kingstree, also was a frequent filler, shelling out at least $17,000 from his campaign account on gas, much of it from a station within sight of his real estate office. Aside from his campaign coffers, he also tapped taxpayers for driving expenses. During the past four years, he received more than $11,700 in mileage reimbursements. His campaign also covered $888 in “travel expense/car repairs” from a tire and service center in Kingstree. McGill did not respond to numerous requests for comment.
Altogether, lawmakers spent more than $139,000 buying gas since 2009, which is surprising given the Ethics Commission’s longstanding position that campaign funds cannot be used to buy fuel. The correct way to document driving expenses? “Mileage reimbursement” in the form of a log “is the only acceptable method,” the Ethics Commission reiterated in a case settling the public corruption case against Ard.
Gifts that keep giving
The political ATM is used in other ways. One common practice is to shower constituents and charities with money and gifts. Notable examples:
While they showered others with gifts, elected officials also received their fair share:
When 26 candidates were caught violating ethics laws, they dipped into their campaign accounts to pay fines – more than $133,000 over the past seven years.
Lawrence M. Noble, another senior counsel at the Campaign Legal Center, said that using campaign donations to pay ethics fines seems wrong on its face. Yet, he noted that South Carolina’s weak ethics laws and tepid enforcement are relatively common among the states.
Just a handful of lawmakers have been convicted of charges that they violated the state’s anemic ethics laws.
Former Sen. Robert Ford, D-Charleston, became the poster child of campaign abuse after prosecutors in 2014 revealed that he spent campaign money on a gym membership to Planet Fitness, which he reported as a “campaign worker-gratuity,” and bought adult novelty items from Badd Kitty, referring to them in disclosure forms simply as “purchase.”
Investigators also alleged that Ford used campaign funds to buy male-enhancement pills, a Kangen water ionizer, and pay his renter’s insurance. Ford eventually resigned and pleaded guilty to public corruption charges stemming from what prosecutors said was the misuse of more than $69,000 worth of campaign funds. He was sentenced to five years of probation.
But the most prominent ethics law case brought down Harrell, at one time one of the most powerful leaders in state government.
After stories by The Post and Courier and a complaint by the government watchdog S.C. Policy Council, prosecutors eventually accused Harrell of paying himself $294,000 from his campaign account, including $94,000 toward expenses of his private plane, which he used, among other things, to fly with family and friends to a high school baseball tournament, costs he reported as “legislative travel.” Harrell was sentenced to three years of probation but maintained to the end the expenditures were merely a reflection of differing interpretations of the state’s ethics laws.
Harrell’s prosecution triggered ongoing spin-off investigations into other lawmakers, a situation that has elevated anxiety levels throughout the state’s political ranks. “The level of ‘gotcha paranoia’ in Columbia is at an all-time high right now,” said Harrell’s son, Trey Harrell, a Charleston attorney and longtime friend of Sandifer, the Republican representative from Seneca.
Sandifer declined to comment for this story, but Harrell said that Sandifer and many other lawmakers are taking a second look at their finances or having lawyers or others review their ethics filings. Some lawmakers argue that the state’s ethics rules and legal opinions are so complex and unclear that they mess up even when they’re trying to do the right thing.
Then again, it’s helpful to remember that they make those rules.
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It turns out you can’t buy everything on Amazon.com after all.
The online retail giant is quashing an effort by a Texas teenager to use the company’s website to funnel cash into his newly formed pro-Bernie Sanders super PAC.
The Bern2016 super PAC was officially launched this week by 15-year-old Sebastian Burnham of Austin, Texas — a high school senior who cannot yet vote for his preferred candidate but is legally allowed to create a super PAC to advocate on Sanders’ behalf.
Super PACs can raise unlimited sums of money to advocate for or against federal politicians, although they cannot coordinate their spending with candidates. Conversely, the candidates themselves have virtually no control over these independent efforts.
Burnham, an active blogger who plans to study political science in college, says he wants to focus on raising money from grassroots givers — as Sanders himself has— and he thought he had developed a novel plan to do so.
Until recently, Burnham’s group stated on its website — ProgressivesForBernie.com— that pro-Sanders shoppers could use a specialized Amazon.com link to donate to the super PAC “for free.”
The idea was to have a percentage of every purchase made by users who were referred there by Bern2016 benefit the super PAC.
But Amazon.com isn’t on board.
“It has come to our attention that you are not in compliance with the Associates Program Operating Agreement,” Amazon.com wrote in an email to Burnham after questions from the Center for Public Integrity. “If you are not in compliance within five business days, we will be forced to terminate the Operating Agreement, close your Associates account and withhold advertising fees.”
In an emailed statement, Amazon.com spokesman Tom Cook said the company takes “the appropriate action” when it becomes “aware that an organization or company has violated the operating agreement.”
Burnham called the company’s decision a “setback” for his super PAC, adding that he had removed the specialized Amazon.com link but would continue searching for other similar programs that could be used.
He admitted it was “ironic” that he had launched a super PAC for a candidate who has disavowed super PAC support, but he argued that his group was different.
“I find nothing that Bernie has said that would inspire anyone to believe that our grassroots funding system is somehow unethical or unjustly sabotaging the electoral system,” Burnham said.
With whatever funds it raises, Burnham said his super PAC would produce flyers and online ads — including some praising Sanders’ “work on racial justice.” He said he was drawn to Sanders because of the U.S. senator’s support for policies that would aid the middle class and reduce poverty.
“One of the main problems with the Bernie Sanders campaign at this moment seems to be that large amounts of the electorate, especially among minorities, still have no idea who he is,” Burnham said.
“How much money we can raise, that’s up to the Bernie supporters visiting our website,” Burnham added. “We’re going to start small.”
Sanders campaign spokesman Michael Briggs did not immediately respond to a request for comment.
Earlier this summer, the Sanders campaign demanded that a separate super PAC curtail its activities, citing concerns that the group — called Americans Socially United and led by a man with a history of legal and financial problems — was "illegal and causing harmful confusion for supporters of Senator Sanders' campaign."
Currently, Amazon.com allows certain users to promote products and earn advertising fees — between 4 percent and 8.5 percent — through its “Associates” program, which Bern2016 unsuccessfully attempted to join.
Amazon.com also operates a fundraising program that allows shoppers to boost their favorite charities.
The company’s AmazonSmile Foundation donates 0.5 percent of the price of eligible purchases to customers’ preferred nonprofits. The foundation gave out about $340,000 in 2013, the most recent year for which tax records are available.
Only charities organized under Sec. 501(c)(3) of the U.S. tax code — not super PACs — are eligible to participate.
“It would be illegal under the tax code for the AmazonSmile Foundation to go anywhere near this,” campaign finance attorney Cleta Mitchell told the Center for Public Integrity.
“It strikes me that this PAC is putting Amazon in a position of being the donor to the PAC,” she continued. “This is a crazy, illegal scheme — and Amazon would be nuts to participate in this because it could get them in trouble.”
In the past, the Federal Election Commission has approved programs that allow consumers to transfer a percentage of purchases — or even airline points — to political candidates and committees, where it was explicit that the money was coming from the individual, not the company involved.
Such programs must further collect contributor information — including name, address, employer and occupation — to comply with federal disclosure laws. They must also ensure that money from prohibited sources, such as foreign nationals and government contractors, is not donated.
Burnham’s system has not yet found a way to comply with those requirements.
Until recently, his super PAC’s website stated that its “commission-based system leaves no way to track donor information and as such would cause legal troubles for Bernie's spotless campaign.”
Burnham told the Center for Public Integrity that Bern2016 would “adopt” if “it was ruled that our system was somehow in violation of FEC norms.”
Paul Ryan, a lawyer at the nonpartisan Campaign Legal Center, called Burnham’s idea a “cutting edge program” but stressed that all super PACs must track donor information and comply with other rules.
“If I were the super PAC’s lawyer, I would have gone to the FEC for an advisory opinion before launching this fundraising strategy,” Ryan said.
The Center for Public Integrity was honored with two prizes Saturday night from the the Online News Association (ONA) during the group’s annual awards banquet in Los Angeles, California.
An examination of how financial companies, private vendors, and corrections agencies increasingly charge high fees and shift the costs of basic necessities onto families of prison inmates won the Al Neuharth Innovation in Investigative Journalism Award, small category.
The two-part series also featured a 23-minute documentary produced by multimedia editor Eleanor Bell in collaboration with reporter Daniel Wagner.
A global collaboration examining the World Bank’s failure to follow its own rules for protecting vulnerable populations won the Al Neuharth Innovation in Investigative Journalism Award, large category. “Evicted & Abandoned” was reported by more than 50 journalists in 21 countries through the International Consortium of Investigative Journalists (ICIJ), a project of the Center for Public Integrity. The ICIJ teamed with the Huffington Post, the GroundTruth Project, the Investigative Fund, and more than 20 other news organizations.
ProPublica and NPR also won the Al Neuharth Innovation in Investigative Journalism Award, large category for "Insult to Injury: The Demolition of Workers' Comp" which looked at the decline of workers' compensation benefits in states around the country, and the subsequent shifting of costs of workplace accidents to taxpayers.
The awards mark the second straight year of ONA honors for the Center for Public Integrity. In 2014, the Center won the award for General Excellence in Journalism, small category for digital storytelling and use of technology. The Center won two awards out of a total of seven finalists for awards in six categories.
Launched in 2000, the Online Journalism Awards (OJA) recognize excellence in digital journalism, with a focus on independent, community, nonprofit, academic and major media.
Congratulations to all of this year’s winners.
Presidential candidates from both parties are full of sound and fury about various aspects of the U.S. health care system, but unless we as a nation get serious about big money in politics, all the noise will ultimately amount to nothing.
Every one of the Republican candidates has pledged to repeal and replace the Affordable Care Act. But I’m not sure they realize that the interests of the insurance and pharmaceutical industries, as well as hospitals and physicians, were considered first and foremost as the law was being drafted.
Yes, Obamacare has brought some needed reforms to the insurance marketplace and has enabled millions of previously uninsured Americans to finally get coverage. But health insurers have not only thrived since the law was passed, they are more profitable than ever, and that has made their executives and investors happy—and richer. The stock prices of the five largest for-profit insurers have tripled and in some cases quadrupled since the law was passed.
And now that many more people can afford to see a doctor and pick up their prescriptions and hospitals are not having to provide as much charity care, most health care providers would be just as upset as the insurers if a repeal of the law became a real possibility.
On the Democratic side, Hillary Clinton and Bernie Sanders have both announced plans to fix some of the problems not addressed by the ACA. Both of them said they favored allowing Medicare to negotiate with pharmaceutical companies for lower prices and they both want to make it legal for Americans to re-import drugs from Canada and elsewhere. They also criticized the outsized profits of many drug makers and pledged to force the companies to provide more information about how much they actually spend on research and development.
Clinton also proposed capping out-of-pocket drug spending for some people with chronic conditions at $250 a month. Even though her campaign acknowledged that the cap would apply to only about a million people, the proposal drew sharp rebukes from both the insurance and pharmaceutical industries.
America’s Health Insurance Plans, the industry’s largest PR and lobbying group, said it opposed any plan "that would impose arbitrary caps on insurance coverage.”
AHIP even criticized Clinton’s and Sanders’ plans to enable Medicare to negotiate for lower drug prices, saying that imposing caps and “forc(ing) government negotiation on prescription drug prices will only add to the cost pressures facing individuals and families across the country."
If you’re wondering why insurers don’t want Medicare to have the ability to negotiate with drug companies, here’s why: it would make their Medicare Advantage plans, which offered prescription drug benefits to seniors long before the traditional Medicare program could, much less attractive. The irony is that private insurers can negotiate with drug companies but the federal government cannot.
And if you’re wondering why that is, here’s why: lobbyists for drug companies and insurers have defeated every bill that has been proposed over the years to allow Medicare to negotiate for drug prices, just as they have been able to defeat every bill—even those with bipartisan support—that would allow Americans to order medications from Canadian pharmacies.
When Congress was considering legislation to add a prescription drug benefit to Medicare in 2003, industry lobbyists insisted that language that would have authorized the government to negotiate with drug companies be stripped out of the bill. Six years later, they won again when they the Obama administration caved in to pressure from the drug companies and made certain that the ACA would not include drug negotiation authority for Medicare. This despite the fact that Obama had said when he was a senator from Illinois that, “Drug negotiation is the smart thing to do and the right thing to do.”
In fact, the drug companies always win, which is why Americans pay far more than citizens of any other country for prescription medications. We pay exactly 100 percent more per capita for pharmaceuticals than the average paid by citizens of the 33 other developed countries that comprise the Organization for Economic Cooperation and Development (OECD).
Obama also once supported drug re-importation, as did Sen. John McCain, the Arizona Republican who lost to Obama in the 2008 presidential election. In 2012, two years after the passage of the Affordable Care Act, McCain teamed up with Sen. Sherrod Brown, (D-Ohio) in another attempt to get Congress to pass a drug re-importation bill.
When it became clear that his bill would not pass, McCain took to the floor to denounce the ability of well-financed special interests to control the federal government.
“What you’re about to see is the reason for the cynicism that the American people have about the way we do business in Washington. (The pharmaceutical industry)… will exert its influence again at the expense of low-income Americans who will again have to choose between medication and eating.”
Don’t expect that to change anytime soon. As long as interest groups can spend unlimited amounts of money to influence elections and can hire hundreds of lobbyists to do their bidding, millions of Americans will have to decide between health care and eating, while executives and shareholders get richer and richer.
Wendell Potter is the author of Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans and Obamacare: What’s in It for Me? What Everyone Needs to Know About the Affordable Care Act.
Hey political junkies: Think you've been following the news this month? Now is your chance to prove it!
See if you can answer these seven questions correctly in the Center for Public Integrity's latest quiz.
All questions are based on money-in-politics news we've reported on in September — a busy month that saw a papal visit to the United States, the second official GOP presidential debate and two major Republican candidates drop out of the 2016 White House race.
Federal Election Commission employees — a generally unhappy lot for years — are even more unsatisfied with their jobs than before.
That's the bleak conclusion drawn from the 2015 Federal Employee Viewpoint Survey's satisfaction index, which places the election law enforcer and regulator near the bottom of 41 small agencies ranked.
The FEC received an employee "global satisfaction" score of 43 out of 100, down a point from last year and 12 points from 2010, according to the annual survey released today by the U.S. Office of Personnel Management.
Only the Chemical Safety and Hazard Investigation Board (36) and African Development Foundation (18) received a lower score than the FEC among small agencies.
The average score among small federal agencies is 62.
That's if commissioners decide anything at all: they often deadlock on votes that affect a slew of campaign issues, from how politicians spent money to the kinds of disclaimers people must place on election messages.
And the White House and Congress generally pay the agency little attention.
For example, five of six FEC commissioners continue to serve despite their terms having expired, and President Barack Obama has not nominated new commissioners for the U.S. Senate to review and formally appoint.
FEC Chairwoman Ann Ravel, a Democrat, told the Center for Public Integrity that "it's discouraging that the staff, who are hardworking and care about the agency, have these concerns. It's the commission's responsibility to try to address that going forward."
Commissioner Ellen Weintraub, also a Democrat, said she had not yet read the survey's results and declined to comment. The four other FEC commissioners, along with agency staff director Alec Palmer, could not be reached for comment.
Office of Personnel Management Acting Director Beth Cobert said in a statement that “as leaders, we know that employee engagement drives performance and is closely tied to mission success in the federal government, which means better service for our customers, the American people."
Three rank-and-file FEC employees interviewed Monday told a similar story about agency morale: that it's bad and getting worse. They spoke under condition of anonymity because they are not authorized to speak with reporters and were afraid of retribution.
The staffers' primary gripe FEC employees often don't feel as if their work is valued by agency leaders, if it's acknowledged at all.
That sentiment is broadly reflected in the satisfaction survey's subcategories.
Just 32 percent of FEC employees responding to the survey said they were satisfied with the FEC as an organization.
Even fewer, 30 percent, said they'd recommend people work at the agency.
In both these cases, the FEC ranked 39th out of 41 small federal agencies polled.
The FEC fared marginally better in terms of employee pay satisfaction and personal job satisfaction.
More than half of the FEC's staff — 163 employees — responded to the 2015 Federal Employee Viewpoint Survey.
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Joan Lantz was having trouble breathing. At 9:28 p.m. on Feb. 7, 2012, the 71-year-old picked up her cellphone and dialed 911 from her small apartment in Rock Hill, South Carolina.
“I can’t breathe,” Lantz said in a labored voice to the 911 dispatcher.
“What’s the address?” the dispatcher asked.
There’s a pause. Lantz says again, “I can’t breathe.”
“Hold on one second. I’m trying to find out where you are, OK?” the dispatcher said reassuringly.
It would take more than 13 minutes for dispatchers to determine the location where Lantz was calling from. And even then, it was just an approximate area: somewhere in the sprawling Patriot’s Crossing Apartments complex in northeast Rock Hill.
Another 44 minutes would pass before police officers, who went from apartment to apartment trying to find Lantz, kicked down the door of unit 101. There, they found Lantz lying on her couch, dead from respiratory failure. She was still clutching her cellphone.
Lantz’s death might have been prevented. Addresses pop up quickly on a dispatcher’s screen when a call comes from a landline. But dispatchers can’t always locate callers when the calls come from cellphones — especially when made from indoors.
More than 10,000 people, who would otherwise be saved, die every year when calling 911 from a cellphone because emergency dispatchers can’t get a quick and accurate location on them, the Federal Communications Commission calculated, when it proposed new 911 location rules last year for wireless phones.
The problem isn’t the dispatchers, police officers or firefighters who respond to the emergency calls. The failure is that the technologies used by wireless carriers — like industry giants AT&T Inc. and Verizon Communications Inc. — fail repeatedly to locate indoor callers.
The real tragedy, say emergency workers and cellular engineers, is that this doesn’t have to be: Technical solutions exist that can locate people calling on cellphones within seconds. But tough rules proposed by the FCC in February 2014 aimed at requiring more accurate indoor locations of callers to 911 were weakened through a nearly year-long lobbying campaign by wireless carriers.
Wireless carriers said the new rules relied too heavily on expensive proprietary technology that was untested and that accuracy claims were overhyped. They argued that commercially available technology already widely deployed, such as Wi-Fi and Bluetooth devices found in almost every business and most homes, promised to provide better location accuracy because it would give a specific street address with an apartment, floor and room number.
But more than a dozen associations representing firefighters, police, emergency medical technicians, the elderly, the deaf and technology companies said the commercial technology wasn’t developed for the demands of a 911 system and would fail during major disasters when electricity was lost. The industry’s proposal, many of the groups said, allowed the carriers to shift the cost and responsibility of locating 911 callers from the carriers to the public, making it impossible for the FCC to enforce.
But more important, many of the groups said the carriers ignored them when developing their alternate rules, relying instead on associations the carriers had lavished with hundreds of thousands of dollars of support.
“[This] … is a perfect example of how big money and big corporations can make it appear there’s been a democratic and open process, but in fact they’ve corrupted the science and bought off the very organizations that are supposed to be a watchdog in protecting the public,” said a former senior FCC official who asked to not be identified in order to speak more candidly. “And in this case, the result means more people will die.”
An ‘effing boondoggle’
In February 2014, Tom Wheeler, just three months into his new job as FCC chairman, proposed explicit rules requiring carriers to deliver accurate indoor locations for people calling 911 from their cellphones. The issue had been a big concern for Wheeler going back to the 1990s, when he was head of CTIA-The Wireless Association, which typically fights for looser regulations. But Wheeler had cast the tie-breaking vote on the association’s board to support wireless location rules.
Wheeler told a workshop the FCC convened on the issue in November 2013 that he had been convinced wireless location rules were needed after a meeting he had during his CTIA days with then-FCC Chairman Reed Hundt. The chairman had played a tape for Wheeler of a 911 wireless call from a frantic woman in Texas whose car was stuck on a railroad track. She couldn’t give the dispatcher her location, and while she was unharmed, Wheeler listened to the sound of her car being demolished by an oncoming train.
Wheeler’s proposal would have required carriers to use new technologies to meet the required accuracy. Some were already available while others had been tested but not included in handsets and would have added tens of millions of dollars a year to carriers’ costs to provide. The technology would allow emergency workers to locate people calling from indoors and from deep within cities where tall buildings can block GPS signals.
The rules also included requirements to identify for the first time what floor a person was calling from and to report to dispatchers and the FCC that they were locating the vast majority of indoor callers. The accuracy for pinpointing a caller was reduced from the previous requirement of up to 300 meters to 50 meters.
But the agency didn’t pass those rules. Instead, this past January, the commission approved a watered-down version of Wheeler’s proposed regulations. Deadlines for when carriers have to meet accuracy standards for locating wireless callers were extended and requirements specifically designating indoor-location accuracy were removed. Cheaper, untested technologies that won’t require wireless carriers to spend more money were included instead.
The final rules were a significant step forward in eventually improving locating wireless 911 callers, said an FCC official who was involved in working on the regulations and asked not to be identified so to speak candidly about the rulemaking process. But many supporters of the stricter proposal inside the FCC still weren’t satisfied with the outcome, the source admitted.
The process “was the biggest effing boondoggle ever,” said a participant in the rule-making process. The person asked for anonymity, fearing a backlash from carriers. “It represents everything that is wrong with Washington.”
Large and well-financed telecommunications companies spent millions on lobbying the FCC and relied on cozy relationships cultivated over years with the two associations representing emergency dispatchers, Association of Public-Safety Communications Officials-International (APCO) and the National Emergency Number Association (NENA), the key groups needed to support any new location rules.
In the end, they managed to convince the government to sacrifice safety to protect their bottom lines, say many public safety advocates. But wireless companies say their approach is better because it relies on commercially available, ubiquitous location technology that many popular applications use to locate callers.
Nearly two dozen individuals including lobbyists, wireless technology executives, cellular engineers, 911 operators and industry consultants declined the Center’s requests for interviews or asked to speak anonymously for this story. They said their jobs or businesses relied heavily on the carriers — in particular AT&T and Verizon, which combined account for two-thirds of all cellphone customers nationwide.
AT&T declined to comment for this article, referring questions to CTIA, which includes as members AT&T and other carriers as well as suppliers. CTIA offered a 935-word statement, which did not address a dozen questions the Center sent on specific points that appear throughout this article.
“The FCC’s rules require wireless carriers to meet quantifiable benchmarks on aggressive timelines,” Scott Bergmann, vice president of regulatory affairs at CTIA, wrote in the emailed statement. The FCC’s approach “will help save lives.”
Verizon and T-Mobile US Inc. also declined requests for interviews to answer specific questions about how the rules were negotiated. For other responses, the Center relied on excerpts from comments the companies filed with the FCC.
Officials from APCO, which has received considerable support from carriers, didn’t respond to multiple requests for an interview. In a blog posted in January, APCO said it was “proud” to have collaborated with the wireless carriers to develop an alternate set of rules that it believed would provide a better solution by delivering a specific address to 911 dispatchers.
GPS not the best
For years, the FCC has required wireless carriers to provide GPS location technology in their handsets, with accuracies up to 300 meters of a 911 caller. But dispatchers don’t always get a location when a call comes in. A 2012 study of 911 calls in five California cities showed an accurate location was being delivered between 20 percent and 49 percent of the time. Carriers disputed the findings, saying dispatchers weren’t following proper computer procedures to obtain callers’ locations.
Most recent cellphones are equipped with global positioning system hardware, which can locate callers from satellites. But while GPS works well when locating a caller standing in an open field, when the call comes from inside homes, apartments, stores, hotels, college dorms, or in downtowns where tall buildings block the signals, it performs poorly.
With an estimated 58 percent of all wireless calls coming from indoors, the FCC realized a large portion of emergency calls were likely not to deliver a location at all.
Data crunched by the FCC showed 10,120 lives would be saved each year, with an economic benefit of $92 billion annually, if police, firefighters and ambulances could reach a caller just one minute faster.
Tests performed in 2012 by an FCC-sponsored group and later by independent consultants had shown new wireless location technologies frequently provided better indoor accuracy than GPS-based technologies. The FCC now had “confidence that further advances in technology should enable us to locate callers indoors with the same degree of accuracy as outdoors,” Wheeler said in February 2014 before the agency’s commissioners approved opening the rules for public comment. The agency’s two Republican commissioners also voted in favor of releasing the proposed rules but objected to what they considered tight timelines.
At the heart of the proposed rules were two requirements:
The rules were considered aggressive but attainable by police, firefighters, medical responders, many technologists and cellular engineers.
The carriers disagreed. AT&T filed comments with the FCC in May 2014, calling the rules’ accuracy requirements “not yet technically or commercially feasible” and the “proposed timeframes … wholly unrealistic.” Verizon also said the deadlines were not attainable and that more time was needed to test if “a particular location solution will meet any new accuracy standards the Commission adopts.” T-Mobile said the FCC’s reliance on new location technologies for its proposed rules had “proven economically infeasible to deploy and maintain in comparison to other, better performing technology alternatives,” and suggested Wi-Fi technology as an alternative. Sprint Corp. made the same arguments.
Getting their way
Eleven months later, the FCC passed very different rules, regulations that were based largely on a plan called the Roadmap, which was written by the four big wireless carriers — AT&T, Verizon, Sprint and T-Mobile — in conjunction with APCO and its smaller sister, NENA, which together represent about 30 percent of the nearly 100,000 emergency dispatchers nationwide.
The rules no longer required the carriers to show they were delivering locations for indoor calls. All 911 calls, coming from outdoors and indoors, would be measured together. The percentages of calls that would have to deliver an accurate location were reduced, from 67 percent in the first two years to 40 percent. The deadline for 80 percent of calls delivering an accurate indoor location was extended from five years to six.
Removed from the rules was a requirement to deliver a location for callers in multi-story buildings. In its place is a requirement that within three years carriers come up with an independently verified way to measure vertical location and deploy by 2023 the technology to just the top 50 wireless markets nationwide. The FCC had proposed requiring carriers to provide vertical locations nationwide within three years for 67 percent of indoor calls.
The carriers also got their way in pushing for a so-called Nationwide Emergency Address Database, which would provide a dispatchable address that includes street address, apartment number, suite, floor and other location information for just 25 percent of the population. The database, which is required to be built by 2021, would be populated with the addresses of Wi-Fi and Bluetooth devices operated by companies, retail establishments and individual homeowners that smartphones access and can be used to broadcast their locations.
The carriers, CTIA, technology companies and APCO and NENA touted the new rules as a collaboration between industry and the dispatcher associations, a partnership, they frequently said, that the FCC had called for in its proposed rules, asking for “industry and public safety stakeholders to propose consensus-based, voluntary commitments.”
“The FCC’s invitation was based on a long and successful history of collaborations between wireless carriers and the public safety community to improve 9-1-1, which was repeatedly spearheaded by APCO and NENA,” including the rules passed in 2013 for texting 911, which “has already enabled life-saving communications,” CTIA’s Bergmann said in an email.
But in the end, the carriers asked only the dispatcher associations to negotiate, other groups argued. Left out were a range of associations, including police, sheriffs, firefighters, emergency medical responders, the elderly, the deaf, abused women, utility regulators and others who strongly supported the initial rules, members from these groups said.
The two groups the carriers did negotiate with — APCO and NENA — have received large financial donations from the carriers.
AARP, whose members are among the most likely demographic to call 911, described the negotiations as a “closed, opaque process” and said the “agreement would have been very different … if it had been an open and transparent process.”
The wireless companies “have far too much influence in Washington, and when you add to that APCO and NENA, it is very hard” to overcome, Kevin O’Connor, head of governmental affairs for the International Association of Fire Fighters, which supported Wheeler’s original rules, said in an interview. “The people going into fires risking their lives should be included in any negotiations and should carry a lot of weight. But unfortunately, in this case, that didn’t happen.”
In January, the FCC commissioners, three Democrats and two Republicans, voted 5-0 to approve the altered rules, but the unanimity belied the commissioners’ division. Democratic Commissioner Mignon Clyburn voted to “concur” with the rules, a position that means she didn’t agree with the changes but wasn’t going to try to stop them. “I would have preferred the rules that we originally proposed would be the ones we vote on today,” she flatly said before the vote. Clyburn didn’t respond to a request for an interview.
Commissioner Jessica Rosenworcel, also a Democrat, opposed Wheeler’s proposed rules. A frequent speaker and attendee at APCO events, Rosenworcel was the key player helping guide the creation of less stringent rules, sources inside the FCC said. Rosenworcel said the new requirements took “a lot of work and wrangling” and thanked APCO and NENA for their “insights and assistance.” Rosenworcel did not respond to a request for an interview.
Wheeler realized he didn’t have the votes to pass his original proposal without Rosenworcel, who would have likely joined the two Republican commissioners in voting against Wheeler’s rules, FCC sources said.
The two Republican commissioners preferred the altered rules. Ajit Pai said he appreciated the rule changes and that he “would like to thank Commissioner Rosenworcel in particular for helping steer the item down a better path,” a rare show of bipartisan camaraderie on the commission.
Wireless funds flow to safety groups
A few weeks after the FCC released the proposed tougher rules wireless carriers began meeting with APCO and NENA. The groups had worked together months before to form rules for texting 911, and the carriers needed the groups’ support to help roll back what they viewed as Wheeler’s heavy-handed regulations.
“You don’t have to be an Einstein to figure out what their reaction was,” Brian Fontes, NENA’s CEO, said of the carriers in an interview at his office. “They had to be apoplectic over the proposals that the commission was presenting.”
The carriers and the associations, aligning with their state chapters and groups supported by the wireless carriers, collectively spent millions of dollars to file dozens of comments in support of their alternate rules and convinced other large groups and corporations to do the same. The four carriers, CTIA, APCO and NENA — with support from large technology companies such as Cisco Systems Inc., Motorola Mobility LLC and other smaller groups — filed nearly twice as many comments and met with FCC staff more than a dozen times more than location technology companies and their supporters did during the 12 months the commission wrote the rules, according to FCC records. The record they built overwhelmed the smaller and less financed groups. And it was a record the FCC is required by law to consider.
The wireless carriers are among the best in Washington when it comes to building a strong case for their views on wireless policies because they can call on a network of organizations to file comments that support the carriers’ positions, the FCC official said. As a legal matter, the FCC has to consider all the submissions or risk future lawsuits, the official said.
TruePosition Inc., a location technology company that supported the stricter rules, formed a lobbying group called FindMe911. The group published a list of comments from dispatchers nationwide complaining about the poor location technology and created other promotional campaigns. But the effort failed against the wireless carriers’ combined spending, said one of the leaders of the campaign.
In reaching out to the public-safety stakeholders, the carriers kept the field to APCO and NENA, two associations they had long ago cultivated close relationships with by being among the top sponsors of the associations’ annual conferences. The carriers also have been among the primary sponsors of the groups’ awards banquets, workshops and seminars held on specific 911 policies.
The financial ties run deep.
APCO offers companies corporate partnerships, which includes benefits based on the amount of money a company gives such as access to APCO board members and executive staff. AT&T is a “platinum corporate partner,” the top partnership level. It requires giving the association $100,000 or more, according to APCO’s website. Verizon is a silver partner, a level bestowed to companies that donate between $40,000 and $70,000, and T-Mobile is a bronze partner, which requires a gift between $10,000 and $40,000. Sprint is not a corporate partner.
Motorola also gave $100,000 or more, and TeleCommunication Systems Inc., which develops wireless-location-based services, and Intrado Inc., which provides emergency communications systems to telecom companies, both donated between $70,000 and $100,000. TeleCommunication Systems and Intrado rely heavily on business from the largest wireless carriers, according to sources knowledgeable about the contracts who asked for anonymity for fear of retribution from the carriers.
Motorola, TeleCommunication Systems and Intrado submitted comments in December with the FCC supporting the wireless carriers’ rules. Together these six companies represent 40 percent of APCO’s corporate partners. None of APCO’s 15 corporate partners includes a company or group that supported the stricter 911 location rules.
APCO collected about $3.4 million from its conferences in 2013, which includes sponsorships from wireless carriers and the emergency wireless infrastructure companies that work closely with the telecoms, according to its financial statement filed with the Internal Revenue Service. That was 34 percent of its total revenue of $9.9 million and is typically the largest single source of income for the association.
APCO’s sister association, NENA, also holds conferences and seminars that are sponsored by the wireless companies and infrastructure companies that depend on their business. But NENA CEO Fontes denied sponsorships and other giving influence the association’s policy positions.
“I think it’s a very big problem that APCO has these sponsorships; it’s a very big problem,” said Hundt, FCC chairman during President Bill Clinton’s administration. The carriers’ sponsorships of APCO and NENA conferences and events “just create a serious conflict of interest. It’s unavoidable.”
Fontes, saying he wanted to be transparent, provided the Center for Public Integrity a printed copy of a spreadsheet showing AT&T, Sprint, T-Mobile, Verizon and CTIA gave NENA a total of almost $595,000 from 2011 to 2014. The amount is about 4 percent of NENA’s total revenues during that time.
“Some perceive that we capitulated because these carriers give a vast amount of money to NENA. Well, it’s not so,” said Fontes, who previously was head of policy at CTIA. The amount they give “is not going to make or break this organization.”
CTIA, to which AT&T referred the Center to answer questions about financial ties with APCO, did not address an emailed question about whether wireless companies used sponsorships and other donations to influence dispatcher associations. The association wrote that the FCC encouraged industry and other stakeholders to work together.
Motorola declined to comment. Intrado said in a one-sentence statement about its support of APCO and NENA that it “is a long-standing supporter” of the groups and “continues to partner with them to further our common goals.” TeleCommunication Systems did not reply to emails requesting comment. APCO Executive Director Derek Poarch and recently elected APCO President Brent Lee didn’t return emails requesting an interview.
Money also buys access to conference panels and the chance to give presentations at forums where the first kernels of rules may be formulated, with the ideas eventually making their way to the FCC for consideration. Close relationships between association leaders and corporate executives are formed over drinks at the bar and parties at corporate offices.
In March, APCO held its Emerging Technology Forum in Dallas, where AT&T’s corporate headquarters are located. The forum, which the association periodically holds, was sponsored by TeleCommunication Systems, Intrado and T-Mobile, among other companies. Speakers included David Simpson, head of the FCC’s Public Safety and Homeland Security Bureau, which was in charge of writing the wireless 911 location rules.
Most of one afternoon session included “education” on location technology and accuracy given by Verizon, Intrado, TeleCommunication Systems and Qualcomm Inc., which develops wireless communications equipment. All four companies urged the FCC to adopt the carriers’ wireless 911 location rules. Not one company or group who supported the tougher proposed rules was part of the program.
APCO also held an evening reception at AT&T’s headquarters, where the company provided attendees, APCO executives and policymakers “opportunities to meet and greet with AT&T executives,” according to the forum’s program. AT&T also advertised that “technologists from AT&T’s Foundry in Plano will be offering demos of the latest innovations in communications.”
James Thurber, a professor at American University who has studied lobbying for more than 30 years, said the practices are routine and almost universally accepted, but he says it no less undermines the public interest.
“This is one of the lobbying tools to influence public policy,” Thurber said. “The sponsors help set the parameters of the policymakers and drive the policy in the direction they like. … These companies aren’t putting $100,000 out there unless they see some return they will get. This isn’t philanthropy.”
APCO is especially amenable to wireless carriers’ demands, typically aligning itself with the companies’ positions on 911 issues, particularly with AT&T, according to executives and technologists with 911 groups, location-technology companies and former FCC staffers.
Thera Bradshaw, who sat on the APCO board and served as its president for a year, said she never felt pressure to give in to demands from wireless carriers, but when it came to including carriers’ executives on panels and presenting their points of views at “conferences and events, I’ve seen that happen.”
APCO officials didn’t respond to emails requesting comment.
One of the elements in the wireless carriers’ proposal that made it into the FCC’s final rules and irritates critics was the reliance on Wi-Fi and Bluetooth technology, which smartphones connect to for Internet access and provide location information for popular applications. Each router and device has an identifier that can be tied to the physical address where the devices are located, presumably a floor and room number in a multi-story building.
The carriers argued the ubiquitous presence of the routers and devices — in almost every business, school, and most homes — could be used to locate 911 callers indoors. Smartphones constantly look for Wi-Fi routers, which typically have a range of about 50 to 150 feet, depending on obstructions such as walls and appliances. If a person calls 911, the smartphone may determine which Wi-Fi router is closest by its signal strength, even without being connected to the Wi-Fi, and relay the router’s address to the emergency dispatch center, technologists said. If the physical address of the router is known, a smartphone could deliver the location of the router. Emergency responders would be given not only a street address, but a floor, suite or room number, a location that everyone wants, carriers argued to the FCC.
But the physical address of the Wi-Fi and Bluetooth devices would need to be stored in a national database that dispatchers could access. The carriers offered in its Roadmap to build a National Emergency Address Database to store the addresses, which would be provided to dispatchers during a 911 call. The agency agreed and required carriers to create the database by 2021.
Critics of the solution say the technology has its flaws.
Wi-Fi can fail during tornadoes, hurricanes and earthquakes when power blackouts occur, while calls to 911 increase.
Also, critics argue that carriers support the Wi-Fi solution simply because it allows them to avoid the expense of the location technologies that attach to cell towers or on top of buildings, such as TruePosition’s and NextNav’s technologies. NextNav’s product can locate callers on a specific floor and room in a building by sending a beacon out from a transmitter that uses a barometric pressure sensor in smartphones to determine how high a caller is from ground level. The technology would cost about $25 million a year for each carrier, company officials said. In comments to the FCC, wireless carriers said the technologies were too costly, and “commercially-available solutions” such as Wi-Fi could “help … carriers manage costs,” according to a CTIA filing.
The carriers’ support of Wi-Fi as a location technology is relatively new. In afiling with the FCC four years ago, T-Mobile said using Wi-Fi to locate callers “has considerable shortcomings,” including reliability, limited accuracy and that only callers who owned smartphones would have the ability to access the routers. T-Mobile urged the FCC not to consider Wi-Fi as a solution for locating 911 callers.
In response to recent inquiries, T-Mobile referred the Center to a comment it filed in December, just weeks before the FCC voted on the new rules, in which the carrier wrote that recent advancements, “including the widespread use of WiFi positioning technologies in the commercial sector,” have “led carriers and others to reconsider this technology.”
Most important, critics said, a Wi-Fi solution would leave a large portion of low-income households and the elderly with no way of being located when calling 911. About 30 percent of all U.S. households do not have a broadband Internet connection in their home, meaning they have no Wi-Fi router is needed to connect wirelessly to the Internet, according to the Pew Research Center. Most of the households without an Internet connection are low-income and the elderly. Only 52 percent of households that earn less than $30,000 a year have a connection, and only 47 percent of people older than 65 do. Poor communities as a whole also will have fewer Wi-Fi hotspots, leaving large areas in these neighborhoods with no access, critics said.
In addition, most of the poor and elderly don’t have smartphones, which are needed to read nearby Wi-Fi routers and their addresses. About 50 percent of households earning $30,000 and less don’t have a smartphone, and 73 percent of Americans older than 65 years old don’t own one, according to a 2015 Pew Research Center survey.
Won’t save as many lives
In the end, it will be the 911 dispatchers who determine how well the new rules work. And many aren’t convinced they will, given how the rules were written.
Stephen Souder, the director of the Department of Public Safety Communications for Fairfax County, Virginia, and a widely respected expert in the field, said the politics that led to the latest rules were “frustrating.”
But Souder isn’t naïve to how Washington works. He’s seen it before — many times. The FCC has been working on wireless location rules for 911 since 1994, when Souder was part of the agency’s first effort to write requirements for locating wireless callers. Those regulations, and efforts to write others in later years, were rolled back as well. As a result, some people still can’t be found when they call 911, he said, “and in fact it’s gotten worse.”
Now Souder, sitting in his office that overlooks the massive control room where dispatchers take 911 calls, seems resigned to the fact that the latest rules will likely fall short, too, and another six years or more will be lost to improving the system to the point that all callers can be located.
And people will continue to die.
“I’d like to say that these rules will save lives. I don’t know,” Souder said. “But I can absolutely say that [they] won’t save as many lives as [they] would have if [there were] tighter timelines and accuracy requirements that the first rules had.”
Two years ago, when the federal agencies last shut down because Congress failed to fund them, Chinese hackers successfully attacked the Federal Election Commission's computer and information technology systems.
The nation's political campaign and election regulator found itself powerless to the worst act of sabotage in its history: It had furloughed almost every employee at the federal government's behest.
Since then, the agency has apparently learned its lesson.
If, on Thursday, the government again shuts down, the FEC will have nearly three dozen staffers available to, in large part, defend against cyber threats. Congress, in the meantime, is attempting to advance a last-minute, temporary spending measure ahead of Wednesday's 11:59 p.m. deadline.
"There will absolutely be a skeleton crew this time to avoid a repeat of the situation in 2013," FEC Chairwoman Ann Ravel told the Center for Public Integrity. "We understand it's extremely important for crucial IT staff to be available to ensure the information we maintain is kept safe and not hacked."
Of the FEC's 327 employees, 294 would be furloughed during a shutdown, according to the FEC's "plan for agency operations in the absence of the fiscal year 2016 appropriation."
Palmer would be "authorized to recall to duty any employees necessary to meet unanticipated contingencies related to imminent threats to life or property, including electronic records or data," the FEC's shutdown protocol states.
He'd be aided in part by Acting General Counsel Daniel Petalas, who would also avoid furlough, according to the plan.
As political committees, the FEC's six commissioners — three Republican appointees, three Democratic appointees — would likewise continue working through a shutdown, as they did in 2013.
Among the FEC's primary duties is making publicly accessible millions of records about how politicians and political committees raise and spend money.
Presidential and congressional elections in 2016 are expected to easily break spending records.
In it, the Clinton campaign asks for clarity on whether valet parking services and food provided at fundraisers count as in-kind contributions.
The meeting, however, would likely be postponed if the government shuts down.
This story was co-published with Al Jazeera America.
Members of Congress on Tuesday proposed what they called “sweeping reforms” in the federal black lung benefits program, citing a 2013 investigation by the Center for Public Integrity and ABC News.
That project, “Breathless and Burdened,” revealed how doctors and lawyers, working at the behest of the coal industry, helped deny meager benefits and medical care to miners suffering from black lung. It led to the immediate suspension of the black lung program at Johns Hopkins Medical Institutions as well as policy changes within the U.S. Department of Labor.
In a news release Tuesday, Sen. Bob Casey, D-Pa., and other lawmakers said they had introduced legislation to “level the playing field” for sick miners. Among other things, the Black Lung Benefits Act of 2015 would help miners review and rebut “potentially biased or inaccurate medical evidence developed by coal companies” and allow them to reopen cases if benefits had been denied on the basis of discredited medical opinions, the release said.
“There is undeniable evidence that, as thousands of miners are being affected by black lung, coal company lawyers are determined to exploit loopholes preventing miners and their families from receiving the benefits they deserve,” Casey said in a prepared statement. “This legislation is needed to ensure that miners are able to obtain unbiased medical evidence, ample representation and up-to-date benefit payments.”
As the legislation was being announced, the Labor Department and the National Institute for Occupational Safety and Health – part of the Centers for Disease Control and Prevention – were unveiling a memorandum of understanding the agencies said would establish a quality assurance program for X-rays used to determine whether claimants are entitled to benefits. A report by the Labor Department’s inspector general earlier this year found flaws in the X-ray reading process.
“This interagency agreement will provide a process to monitor and assess the quality of X-ray readings submitted to the U.S. Department of Labor as part of the adjudication process,” Leonard Howie III, head of the department’s Office of Workers’ Compensation Programs, said in a statement.
It’s unclear what changes, if any, have been made within the black lung unit at Johns Hopkins. A university spokeswoman did not immediately respond to a request for comment Tuesday.
In a high-profile speech Wednesday, U.S. Secretary of Education Arne Duncan urged states to shift a healthy share of local and state correctional spending on nonviolent offenders to teachers—especially to raise teachers’ salaries at high-poverty schools and help stop the “school-to-prison pipeline.”
Duncan, speaking at the National Press Club in Washington, outlined examples of students who’d committed no serious crimes but were nevertheless directed into the criminal justice system. He spoke of a boy in Denver who drew graffiti on a school bathroom wall, and who was sentenced, for vandalism, to pick up trash on a highway with adults. When the boy later tried to become a police officer, Duncan said, “the department turned him away for that youthful mistake.”
Duncan explicitly linked students’ brushes with police and prosecution with disengagement from education—and increased risk that those kids will founder at school and end up in jail as adults.
“Every day, as a society,” Duncan said, “we allow too many young people to head down a road that ends in wasted potential. Sometimes we are complicit in the journey. We need to do more to change that.”
In April, an investigation by the Center for Public Integrity analyzed national data collected by Duncan’s department in an effort to find out how often individual schools refer students to law enforcement agencies. The Center’s state-by-state analysis of 2011-12 academic year data found that Virginia’s public schools collectively referred students more often than schools in other states. A sampling of local Virginia police data showed that student arrests were mostly for relatively minor misdemeanor allegations—including disorderly conduct committed by middle-school age kids.
The Center report featured the case of an autistic 11-year-old Virginia boy—Kayleb Moon-Robinson—who was charged last fall with disorderly conduct for kicking a trash can at school. Just weeks later, the African-American sixth grader was arrested and charged with felony assault on a police officer after a school cop grabbed Kayleb for leaving class without permission and Kayleb struggled to break fee. Kayleb’s case remains in juvenile court.
Kayleb was told in court that he could face an order into detention if more complaints about his behavior were made at school.
In his speech, Duncan urged additional investment in schools so they can build counseling and support systems for troubled kids, as well as better training for teachers and staff. Specifically, Duncan said further training is needed to help school staff recognize and resist racial profiling of students. Data shows that suspensions and referrals to law enforcement fall disproportionately on children of color.
One of every three black men in America is likely to go to prison “at some point in their lives,” Duncan said, a statistic that “leaves us with no choice. We as a country must do more to change the odds.”
Children in wealthier communities across the nation benefit from greater spending on their schools, based on local and state funding formulas, he said, and these disparities are leaving lower-income minority children with fewer educational resources.
“It’s criminal, it’s criminal,” Duncan said, that schools serving lower-income communities—such as those he once led as head of Chicago schools—receive funding per child that can amount to only half what’s spent on children in richer areas nearby.
Duncan outlined a challenge. He urged states and localities to develop alternatives to incarceration for half the people who get imprisoned for nonviolent crimes in their jurisdictions. Savings of upwards of $15 billion a year could be distributed to “highest-need” schools. The money could boost teacher salaries and attract skilled teachers who would want to stay rather than flee troubled schools.
“That kind of investment wouldn’t just make teachers and struggling communities feel more valued,” Duncan said. “It would have ripple effects on our economy and civil life.”
Duncan said during him tenure in Chicago that he was troubled because “too many” students were ending up in jail. He was stunned when an inquiry showed that most of these students were getting arrested during school hours and inside the city’s schools. Most arrests in Chicago schools, he said, were for nonviolent misdemeanors.
“I know no one…had set out to criminalize the behavior of our students, or to start them down a path of incarceration. But those were the facts,” Duncan said. “Those calls to police, to put kids in jail? We were making them.”
The Center’s report in April revealed other cases of charges against kids in Virginia schools that critics in the juvenile justice system argue are inflated. A public defender told the Center that one such case involved a 12-year-old girl who was charged with disorderly conduct, resisting arrest and obstruction of justice—all in connection with a schoolyard scuffle.
The girl had clenched her fist when an officer grabbed her, and that became the foundation for charging the child with obstruction of justice, the defender said. Another case involved a 15-year-old girl who pushed a girl in the bathroom at school and kissed her. The teen ended up charged with sexual abuse—which put her into court facing prosecution on a serious charge.
Duncan said Wednesday that “in the last three decades, state and local correctional spending in this country has increased almost twice as fast as spending on elementary and secondary education. Ask yourself: What does that say about what we believe?”
Johns Hopkins Medicine said Wednesday that it has discontinued its black lung program, the subject of a Center for Public Integrity-ABC News investigation that showed how coal companies routinely beat back sick coal miners’ disability claims with help from doctors at the nationally recognized hospital.
Johns Hopkins initially suspended the program, a move that came two days after the 2013 series ran.
“The program has been suspended since November 1, 2013 and, following a thorough review, will not be resumed,” Jania Matthews, a Johns Hopkins Medicine spokeswoman, said in an emailed response to a Center query.
It’s unclear when or why the decision to end the program was made. Matthews did not respond Wednesday to a request for more details.
Miners diagnosed with black lung — an incurable and potentially fatal disease triggered by breathing coal dust — can apply for benefits and medical care through a federal program. But the coal companies liable for those payments, aided by doctors and lawyers, have pushed back to get claims denied, the Center and ABC News found.
The series, “Breathless and Burdened,” which won a Pulitzer Prize for investigative reporting, prompted policy changes by the U.S. Department of Labor and a pending proposal from members of Congress for what they called “sweeping reforms” of the benefits program.
Dr. Paul Wheeler, who headed the Johns Hopkins unit, has retired, Matthews said. Wheeler did not find a single case of severe black lung in the more than 1,500 cases decided since 2000 in which he offered an opinion, a review by the Center and ABC News found. Such a finding would automatically qualify a miner for benefits.
Last year, the Department of Labor told approximately 1,100 coal miners that their black lung benefit claims may have been wrongly denied as a result of Wheeler’s readings of their X rays.
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The Center for Public Integrity is investigating who is trying to influence the 2015 elections through television advertising, part of a broader effort to consider the sources behind political power in this country.
What is the Center tracking?
The Center created an app to track spending on political advertising on television for state-level elections around the country. The numbers are helpful barometers of how actively a candidate or group has been using television advertising.
Why should I care about the amounts spent on political television advertising?
Television advertising is one of the most popular and most expensive ways to reach voters. Tracking it provides one of the most comprehensive and comparable pictures available of campaign spending across the states. Money doesn’t always win races, but it often helps push a candidate or ballot measure to victory — or defeat. Tracking these ads helps identify who is trying to influence voters and change the outcome of elections. The ads also provide one of the most comprehensive and comparable pictures available of campaign spending across states.
How can I use this?
This information can help you see who is paying to influence your vote in the 2015 elections.
The opening views of the State Ad Wars Tracker shows at a glance when and where the biggest expenditures on TV ads have been. Browse a timeline of the ads by state and who sponsored the ad; see who’s running more this week than last; and who is running the most overall. Get key numbers and compare the size of ad buys between candidates, groups and political parties.
Who is paying for these ads?
Airtime for political advertising is purchased by candidate committees, political parties and independent groups.
What’s the difference between candidate committees, political parties and independent groups?
Political parties and independent groups are more likely to run negative ads that attack a candidate, allowing the candidate supported by the group to appear above the fray. Independent groups typically can accept money from corporations and unions, which candidates running for office cannot do in some states. Such independent groups often don’t have to disclose the same information about the sources of their funding as candidates or parties.
Where does this information come from?
The Center for Public Integrity analyzed data from Kantar Media/CMAG — CMAG stands for Campaign Media Analysis Group — which monitors television signals for political advertising nationwide. The group counts ads each time they run. Then, using a proprietary formula, it estimates how much it costs to place each ad. These may not match up exactly with the true costs of placing an ad. Think of the cost estimates as a well-informed guess, which can provide useful points of comparison.
What period does this information cover?
The information covers political television advertising that ran starting Jan. 1, 2014, geared toward the 2015 elections. To find spending on 2014 races, visit our 2014 Ad Wars tracker.
How often are these numbers updated?
The trackers will be updated weekly on Thursdays through the election and the Center for Public Integrity will be writing stories about what we find.
Which ads are included?
Kantar Media/CMAG monitors television ads that run on local broadcast TV in 211 media markets, as well as national network and national cable TV, but it doesn’t monitor local cable stations. So if an ad runs on a local cable channel, as some are expected to in the 2015 elections, it won't be counted here.
Does this include digital ads, such as those on YouTube? Ads from radio?
No, these numbers only reflect the ads that ran on television. Kantar Media/CMAG monitors most TV stations, but not local cable stations, online or the radio. It also does not include print advertisements.
How does this compare to what is available from government sources?
The estimates only cover television ads, not other kinds of political messages, such as ads that appear on radio or online. The estimates also only include how much money a candidate or organization spent to place the ad, not to make it. And it only counts the ads once they air. Records filed at the Federal Communications Commission, for example, can show TV airtime that groups pay to reserve for the future. The ad tracker also includes all ads containing overt candidate advocacy as well as “issue ads” that mention a candidate but don’t overtly call for the candidate’s election or defeat.
Why are the spending estimates different from other sources?
These numbers represent actual television ads that have already run. It doesn’t include the cost of producing the ads. It also doesn’t include ads that run on local cable, online or radio. It doesn’t include ads booked to run in the future. It does include ads that don’t expressly advocate for election or defeat. And it’s based on estimates. Counts from other sources are often different in one or more of these ways.
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Have more questions about these numbers?Want to interview one of our reporters for an article?
Email states team leader Kytja Weir or call our statehouse reporters’ hotline at 202-750-0686. Reporters should include what state and race they are writing about and their deadlines.
U.S. Sen. David Vitter, a Republican candidate for governor of Louisiana, would like voters to forget his past connection to a notorious prostitution ring.
But there’s a new political group in the Pelican State that isn’t going to let that happen.
“A New Orleans prostitute says Vitter was a regular,” say TV ads sponsored by the Louisiana Water Coalition, a group backed by a law firm that battles oil and gas companies. “We can do better than Vitter.”
Such political groups, independent from the candidates or political parties usually active on the airwaves, are playing a much larger role in state elections than a year ago, a Center for Public Integrity analysis of television advertising data shows.
So far this year, independent groups account for roughly 23 percent of TV ad dollars spent in the seven states with major races. That’s more than the 15 percent of spending that such groups had in a similar time period in 2014 races, or the nearly 19 percent of spending at this point in 2011 when voters in those states last had comparable elections.
In total, as of Sept. 28, an estimated $22.1 million has been spent airing state-level political ads on broadcast TV in those states, with roughly $5.1 million of it paid for by such independent political groups, according to a Center for Public Integrity analysis of data from media tracking firm Kantar Media/CMAG.
The firm monitors 211 media markets around the country and offers a widely accepted estimate of the money spent to air each spot. The figures do not include ads for radio, the Internet, direct mail or TV ads that aired on local cable systems. The estimates also do not include the cost of making the ads.
Though this year’s races are often drowned out by the circus surrounding the 2016 presidential candidates, the growing role of independent political groups in state races tells a broader tale of their influence up and down the ballot, from governors' races to state senate elections.
Able to do the political mudslinging that candidates themselves typically try to avoid, independent groups are airing heated television attacks on candidates for governor in Louisiana and Kentucky. A conservative Arizona group is targeting attorneys general in Louisiana and Mississippi. In an April vote in Wisconsin, a liberal group helped sink a judge’s bid to join the state’s Supreme Court. Independent groups are also airing ads supporting candidates in the races for Louisiana's education board and the New Jersey Assembly.
The door opened for such independent groups to spend more on election ads after the U.S. Supreme Court’s 2010 Citizens United ruling and related cases said nonprofits, corporations and labor unions could spend unlimited sums to convince voters to elect candidates. Dozens of states had to change their campaign finance rules to align with the court’s decision.
Just last year, a judge struck down a Louisiana law that capped donations to such independent political groups, paving the way for the Louisiana Water Coalition and others to raise unlimited funds.
With outside groups playing a larger role in state elections, voters may not know who’s behind the most vitriolic election ads they see. Some of the groups do not have to disclose their donors. Some use alternate names that obscure their identities.
Some of the outsiders running ads are true outsiders, groups coming from out of state with cash from donors around the country. They have national reach and national agendas.
In Kentucky, where Democratic Gov. Steve Beshear has served the maximum two terms, Republicans and Democrats are battling to win the loyalties of voters who have historically preferred to send Democrats to the state’s highest offices but who have voted for the GOP in the last four presidential contests.
The high stakes have led to an estimated $9 million spent to air election ads in the race so far, with independent groups spending at least $3.3 million of that.
At least seven groups have joined the fray, but among the biggest spenders are the Republican Governors Association and the Democratic Governors Association, both of which jumped in under different names after the state’s spring primary. The Washington, D.C.-based groups each push to elect governors of their party in as many states as possible.
A group called Putting Kentucky First, created by the Republican Governors Association, initially released a stream of ads labeling the Democratic nominee for governor, Attorney General Jack Conway, as an “Obama liberal” who is “putting Obama first and Kentucky Last.” It spent more than $1 million but has since said it is pulling back.
Kentucky Family Values, funded largely by the Democratic Governors Association and unions, spent an estimated $834,000 and slammed Republican Matt Bevin for not releasing his tax returns as Conway did, among other things.
“What else is Matt Bevin hiding?” the ad asks. “We can’t trust him to be for us.”
And Americans for Prosperity, a national nonprofit backed by Republican mega-donors Charles and David Koch, took to local cable on Sept. 1 to attack Conway, a spokesman for the group said.
A minor player in the 2014 Republican primary for Arizona attorney general is expanding its reach nationally, spreading its messages to Mississippi and Louisiana and demonstrating how even a small outside group can wield major influence in faraway races.
The group once known as the Arizona Public Integrity Alliance, a nonprofit that is not required to disclose its donors, has dropped the Arizona from its name but kept its eyes on attorneys general.
It spent an estimated $49,000 on ads attacking Mississippi Attorney General Jim Hood, who is the highest-ranking elected Democrat in state government and faces a re-election battle in November. That’s less than a fourth of what either candidate has spent, but still the ads are making news.
“When Mississippi took on Obamacare, Hood sat on the sideline,” the ad says. “And while Obama’s EPA pushes new regulations to increase your electric bill, Hood fumbles.”
Hood’s campaign called the group’s ads “false” and released its own TV messages suggesting Hood’s opponent was behind the independent group.
“Obviously it’s disturbing that a secret out-of-state group would place such a huge buy on TV in Mississippi,” said Jonathan Compretta, Hood’s campaign manager. “This is a lot of money to spend.”
Public Integrity Alliance also has spent an estimated $38,000 airing ads targeting Louisiana’s Republican attorney general, Buddy Caldwell.
“It’s the same old politics that held Louisiana back,” say the ads, which accuse Caldwell of hiring expensive lawyers who also gave to his campaigns. “Stop the Buddy system.”
A spokesman for Caldwell said in an email that the attorney general hired all his legal help in accordance with state law.
Public Integrity Alliance’s president, Tyler Montague, said the group decided to get involved in other states after unnamed activists asked for its help. And though he won’t disclose his donors, citing fear of retaliation, Montague said his group is trying to shed light on corruption.
“We’re not in the shadows,” he said. “We see ourselves as kind of guardians and watchdogs.”
He said the group may jump into races in more states this election season.
Some groups are homegrown, though voters watching their acrimonious ads still may not know who’s behind them.
Louisiana Water Coalition, the political action committee active in the governor’s race there, began running the ads about Vitter just days after it formed last month.
When the TV spots began running, political players in the state weren’t sure who was behind the group. Paperwork later filed with the state said a Baton Rouge law firm gave the group $600,000 in contributions and another $500,000 loan. The group spent an estimated $221,000 to air the ads through Sept. 28.
The firm, Talbot, Carmouche & Marcello, did not respond to requests for comment. The firm is known for its class-action lawsuits against energy companies for environmental damage.
The ads touch on a sore spot for Vitter. He was re-elected to the U.S. Senate in 2010 after the prostitution scandal but still avoids questions on the topic. In 2007, he acknowledged his phone number was included in the records of the notorious “D.C. Madam” Deborah Jeane Palfrey and apologized for his “serious sin.”
Vitter sent an email to supporters saying the negative ads came from lawyers threatened by Vitter’s plans to combat settlements for “frivolous lawsuits.”
“These well-funded, liberal trial lawyers are the epitome of big-money special interests. They don’t care one bit about Louisiana and our future,” Vitter’s email said. “They just care about one thing — their bulging wallets.”
Louisiana Water Coalition isn’t the only independent group in the state going negative. A federal super PAC supporting Vitter, called the Fund for Louisiana’s Future, directed most of its estimated $567,000 worth of ad spending toward attacks on Vitter’s Republican opponents. And Louisiana Rising PAC, supporting one of those opponents, is firing back primarily with attack ads chastising Vitter for his past support for the Common Core education standards.
It’s common for ads sponsored by independent groups to be attack ads, according to the Center for Public Integrity’s analysis of ads. Nearly 80 percent of the dollars they spent so far went to ads that were entirely or somewhat negative against candidates.
“Negative ads insulate the campaign,” said Kenneth R. Mayer, a professor of political science at the University of Wisconsin-Madison. “It’s not the candidate going negative; it’s someone else.”
Data reporter Ben Wieder contributed to this report.
The Environmental Protection Agency announced Thursday that the country’s anti-smog standard does not sufficiently protect Americans’ lungs and will be tightened, a move that irked groups on both sides of the debate.
The decision comes after years of wrangling over the national limit for ozone, the lung-damaging gas in smog.
The EPA said it decided to lower the legal ceiling on the amount of ozone permitted in the air from 75 parts per billion to 70, citing "extensive scientific evidence about ozone’s effects on public health and welfare."
After the EPA proposed a threshold in the range of 65 to 70 parts per billion last year, clean-air and health groups had urged the agency to rein in ozone more significantly. Earthjustice, an environmental law firm involved in a 2013 lawsuit that forced the agency to act, was among them.
“This weak-kneed action leaves children, seniors, and asthmatics without the protection doctors say they need from this dangerous pollutant,” David Baron, managing attorney at Earthjustice, said in a statement Thursday. “It will allow thousands of deaths, hospitalizations, asthma attacks, and missed school and work days that would be prevented by the much stronger standard supported by medical experts.”
The National Association of Manufacturers, which lobbied hard to leave the limit unchanged, called the decision to tighten the standard “a punch in the gut” because of the cost and economic ripple effects its members fear from tighter pollution controls.
“After an unprecedented level of outreach by manufacturers and other stakeholders, the worst-case scenario was avoided,” Jay Timmons, the trade group’s president and CEO, said in a statement. “However, make no mistake: The new ozone standard will inflict pain on companies that build things in America — and destroy job opportunities for American workers.”
The EPA’s independent scientific advisory committee of researchers and doctors has said since 2006 that the standard is too lenient. But when the EPA last lowered the limit, in 2008, officials did not set it within the 60-to-70 parts per billion range its panel recommended. President Barack Obama told the EPA to hold off in 2011, when the agency was on the verge of trying again.
This time, the EPA faced a court-ordered deadline to make a decision. The American Lung Association and three environmental groups sued in 2013 when the agency had yet to take up the matter as required.
The EPA isn’t permitted to consider cost when it sets the ozone standard, only the effect on public health. Figuring out the most cost-effective way to control smog is supposed to come after the threshold is set.
But you wouldn’t know that by listening to the ozone debates.
Opponents of anti-smog efforts have long argued that stricter rules would wreck the economy, as described in a Center for Public Integrity investigation into the 44-year history of ozone regulation.
When an area is out of compliance with the standard, state officials must come up with a plan to control the pollutants that form ground-level ozone, which is subject to EPA approval. Industry groups fear these ozone-reducing efforts will make daily business more expensive and expansions difficult or impossible.
An economic consulting group hired by the National Association of Manufacturers said in February that the rule would cost the U.S. economy $140 billion a year, with higher compliance costs rippling outward in lost jobs, higher electricity rates and other problems.
Clean-air advocates and the EPA said the dire predictions of economic disaster have never come true, and they doubt this time would be an exception. In September, an economic consulting group hired by Earthjustice contended that the manufacturers’ ozone-rule analysis “grossly inflated the cost” — in part due to what it called a $70 billion math error — while ignoring the economic value of better health.
The cost of failing to control ozone is measured in medical bills, lost work days and shortened lives, according to the EPA. Health groups urging the standard be tightened, including the American Academy of Pediatrics and the American Medical Association, pointed to studies that find respiratory problems such as asthma attacks at ozone levels below the 75 parts-per-billion threshold set in 2008. Evidence is also mounting that ozone has problematic effects on the heart, they say.
Ozone-causing pollutants come from a variety of sources, including factories, vehicles, power plants and refineries. But not all are man-made or locally produced. That’s a particular issue for areas in the West dealing with ozone-worsening wildfires and pollution wafting in from Asia.
A new NASA-led study found that only a quarter of the ozone in California and Nevada in the summer of 2008, a period rife with wildfires, was both local and man-made.
Industry groups have pointed to such “background” ozone when arguing against tightening the standard. Health advocates note that states can ask for an exemption if they are able to demonstrate that their air-quality violations were triggered by causes such as wildfires; the EPA has said it will coordinate with states to work through these issues.
Efforts to influence the EPA’s decision on the ozone standard ramped up to a fever pitch in recent weeks.
At least 21 groups, some for and some against a stricter standard, met with the White House’s Office of Management and Budget in September to try to sway officials at that agency, which has the power to change proposed rules.
Both the lung and manufacturers associations released poll results to suggest that Americans are on their side. The two groups also launched dueling ad campaigns, though not exactly on the same playing field: The lung association’s static ads appeared on websites in the Washington area for a cost the group characterized as “low six figures,” while the manufacturers’ multimillion-dollar effort put ads on television in Washington, D.C., and eight states.
One of the manufacturers’ ads focuses on ozone-forming pollutants that travel from China to the western United States. Tighter ozone rules won’t hurt China, the announcer says, “but they could cost our country more than a trillion dollars” — that’s the group’s estimate when tallying up the effect through 2040 — “and kill more than a million jobs per year.”
“We reserve this kind of advocacy for the kind of issues that matter a lot to our members, and this is one of them,” said Ross Eisenberg, vice president of energy and resources policy at the National Association of Manufacturers. “It’s not just us — it’s governors, it’s mayors, it’s other business associations, it’s unions and public officials all speaking up, Republicans, Democrats … that this is probably the wrong rule at the wrong time.”
Paul G. Billings, senior vice president for advocacy and education at the American Lung Association, said his group’s polling in August suggests that more Americans want stricter ozone standards now than last year, despite the TV ads.
“I think the public understands that the vast majority of air pollution is unfortunately homegrown,” he said. “We have the law on our side, we have the science on our side and we have the credibility of health and medical leaders supporting a much more protective standard. What industry is left with is distractions.”
A bipartisan alliance in Virginia has launched a campaign to cut the number of students arrested by police at schools and reduce the number of juveniles held in large youth prisons in that state. The alliance cites a recent Center for Public Integrity investigation into students arrested and sent to courts in Virginia as evidence supporting a need for statewide and local reforms.
Conservative and progressive participants of the new Rise for Youth campaign are urging schools to stop putting students into the justice system for minor misbehavior, and to clarify the role of school police and their training requirements. Another idea is to persuade lawmakers to exempt children from disorderly conduct criminal codes while at school.
During a press call Thursday, the group of civil rights, religious and fiscal-reform activists also recommended reforming Virginia’s mandatory felony larceny charge that must be imposed for the theft of anything worth $200 or more — a mandate imposed on children, too.
The alliance is pushing for more funds to be dispersed locally to pay for alternatives to locking up lower-level juvenile offenders in big state detention centers. Researchers have found Virginia’s juvenile prisons to be costly breeding grounds that encourage worse behavior and lead to re-arrest rates of former wards of 80 percent.
In April, the Center and Reveal, an investigative public radio program, reported that data for the 2011-12 school year showed that Virginia’s schools collectively had the nation’s highest rate of referring students to law enforcement agencies in the country. African-American and special-needs students were disproportionately referred to cops and courts in Virginia as they were nationwide.
“This is not a statistic that I think any state in America would want to be number one for,” said Craig DeRoche, a former Republican state legislator from Michigan, who directs the Justice Fellowship, a group in the alliance. The group is the policy arm of the Virginia-based Prison Fellowship, a ministry founded by convicted Watergate conspirator Chuck Colson.
DeRoche said that in Virginia “there have been some zealous zero-tolerance policies that have resulted in criminalizing everything from playground skirmishes to handcuffing fifth graders for disorderly conduct violations.”
He was joined in the call by Virginia police and children’s rights representatives.
In September, the Justice Fellowship published a report, Juvenile Justice Reform in Virginia. The study was co-authored by the conservative national Right on Crime group, which argues that incarceration costs must be reduced, and the Virginia-based Thomas Jefferson Institute for Public Policy, which promotes limited government.
Virginia’s rate of referral of students to law enforcement agencies, which the Center found to be double the national average, “merits review,” the report says. “This initial contact with the juvenile-justice system can result in stigma and exposure to other youth with more serious records, which can fuel progressively increased involvement with the system.”
The Center investigation cited a sampling of recent local police data in Virginia showing that most of arrests of schoolchildren are for low-level charges of disorderly conduct or simple assault — and they often involve middle-school kids.
One of these students interviewed by the Center, Kayleb Moon-Robinson, is an autistic African-American boy who was 11 years old last fall when he was charged with disorderly conduct for kicking a trash can at his middle school in Lynchburg, Va. Kayleb was also arrested, handcuffed and charged with felony assault on a police officer after he struggled to break free from a school cop who grabbed him around the torso in a hallway after the sixth-grader left class without permission.
Virginia public defender Linda McCausland told the Center that she has defended middle-school kids charged with three to four charges — including obstruction of justice — for clenching fists and trying to get away from officers who grab them during school fights.
McCausland had an 11-year-old client with documented mental-health problems who was automatically charged with felony theft when she stole a teacher’s cell phone, which was estimated at a value of more than $200. A charge like felony larceny can put a child into detention, McCausland said.
More than one-third of the wards in Virginia’s two big youth prisons in 2014 were placed there for felonies that were not committed against a person — such as felony theft — and more than 11 percent were admitted for misdemeanors, according to the Juvenile Justice Reform in Virginia report.
Kate Duvall, attorney at the Legal Aid Justice Center in Virginia — also a member of the new alliance — said during the press call that she had a client who was sent to juvenile jail because he was on probation for an offense and violated it by taking a cell phone to school without permission. The boy had untreated mental-health needs, she said.
Sheriff Gabe Morgan of the Virginia city of Newport News said that he supports reforms because kids put into lock-up for relatively minor offenses “are influenced the wrong way” and more likely to become adult offenders. He said there are a range of community programs that appear to be effective at treating minors in trouble. He also said his police department recently joined with school staff to undergo retraining for how to better work with children at schools.
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