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- 06/27/17--01:56: _More than 30 nuclea...
- 06/28/17--02:05: _Repeated radiation ...
- 06/28/17--14:33: _Center's alarming f...
- 07/05/17--09:20: _Florida lobbyist tu...
- 07/07/17--02:02: _Become a #CitizenSl...
- 07/07/17--14:38: _Virginia Supreme Co...
- 07/13/17--02:02: _Refugee screeners c...
- 07/13/17--20:47: _Steve Bannon misrep...
- 07/17/17--11:03: _Natural gas buildin...
- 07/19/17--14:06: _Fraud and billing m...
- 07/27/17--11:31: _Steve Bannon has a ...
- 07/28/17--02:02: _Who is killing the ...
- 07/28/17--09:01: _Whistleblowers: Uni...
- 07/31/17--02:02: _Saving face: Facebo...
- 08/01/17--07:40: _Super PACs already ...
- 08/01/17--01:56: _Nuclear weapons con...
- 08/01/17--09:01: _Pakistani PM disqua...
- 08/01/17--15:26: _House Ethics Commit...
- 08/02/17--02:02: _Three Donald Trump ...
- 08/03/17--12:34: _Senator cites Cente...
- 07/05/17--09:20: Florida lobbyist turning Trump ties into mega-millions
- 07/07/17--02:02: Become a #CitizenSleuth and uncover Trump administration mysteries
- 07/13/17--02:02: Refugee screeners criticize bill to narrow eligibility
- 07/13/17--20:47: Steve Bannon misreports $2 million debt in financial disclosure
- 07/17/17--11:03: Natural gas building boom fuels climate worries, enrages landowners
- 07/27/17--11:31: Steve Bannon has a shadow press office. It may violate federal law.
- 07/28/17--02:02: Who is killing the CFPB’s arbitration rule?
- 07/31/17--02:02: Saving face: Facebook wants access without limits
- 08/01/17--07:40: Super PACs already racing toward 2018 — and 2020
- 08/01/17--09:01: Pakistani PM disqualified by court over Panama Papers links
- 08/01/17--15:26: House Ethics Committee scolds, doesn't punish Roger Williams
- 08/02/17--02:02: Three Donald Trump appointees owe IRS back taxes
In the summer of 2011, Los Alamos National Laboratory presented a happy self-portrait to the public. The lab’s news releases bragged of promotions, awards, pacts with neighboring Native American tribes and great feats of science that spilled from the design of the nation’s nuclear weapons.
But that year something alarming happened at Los Alamos that the lab kept quiet. A pair of workers with cavalier attitudes nearly doomed a room full of colleagues by stuffing so much plutonium into a small space that they came close to triggering an accidental nuclear chain reaction, all to get some photos.
Only a few spare documents describing the incident are readily found in the public domain. Fewer still explain what consequences the carelessness at Los Alamos has had for the Department of Energy and its national security mission. But when the Center for Public Integrity’s national security team of Jeff Smith and Patrick Malone learned of the near-nuclear mishap and sensed its broader impact, they decided to dig deeper.
Our main finding: The Los Alamos contractor’s inattention to safety crimped critical aspects of nuclear weapons-related work for so long that it would make a no-nukes protester envious. In addition, with excellent reporting help by Peter Cary, ample evidence turned up that even in modern times the nation’s premier nuclear weapons labs and plants are a dangerous place to work: Workers are seriously injured by explosions, shocks, burns, falls and the inhalation of radioactive dust. The accident rate appears to be going up. And yet the program established by the Department of Energy to guarantee the safety of its workers appears to have made little to no headway in reducing those risks, as the government itself admits.
We presented the results of our year-long investigation over the past two weeks in five articles totaling around 20,000 words, co-published with The Washington Post, USA Today, a variety of Gannett newspapers, Scientific American, Salon, and many regional newspapers and radio/television stations. A video about the project prepared by CPI and Gannett can be found at the top of the Gannett story here. And a National Public Radio interview with Jeff Smith for NPR’s “All Things Considered” program on June 27 can be found here. A member of the House of Representatives from Nevada has called for congressional hearings into the issues we raised.
Malone has been interviewed about the series by the Washington bureau of Sinclair Broadcasting, which has one of the country’s largest networks. And on Friday, Smith will also appear on the NPR radio program, “Science Friday,” hosted by Ira Flatow. It is live and will air at 2:20 pm.
Lobbyist Brian Ballard has for years been a power player in Florida, plying the corridors of the state capitol in Tallahassee on behalf of A-list clients such as Google, Uber, Honda — even the New York Yankees.
Now, the 55-year-old University of Florida Hall of Fame member — a major Donald Trump fundraiser who also worked on the president’s transition — is out to prove he can translate his state-level lobbying chops into policy victories for a slew of new clients in Washington, D.C.
And he must ply his trade in the nation’s capital without looking as if he’s selling access to a president who has promised to stand up to special interests — a tricky course to navigate that has quickly tripped up other Trump alumni such as former campaign manager-turned-lobbyist CoreyLewandowski.
“There's a lot of blurred lines you know,” Ballard said. “It's easy to say ‘oh you are Trump’s person, you get this and that,’ but I don't think it works out that way.”
But more than a few special interests apparently believe it does work that way, as Ballard hasn’t had to work hard to land fresh business.
Since opening his Washington, D.C., office in January — the new digs are just three blocks away from the White House and stocked with prominent influence brokers — Ballard has signed 35 federal-level clients. Most haven’t previously worked with him.
The list includes less-than-First-World foreign governments — Turkey and the Dominican Republican, for two — and brand-name companies and organizations, such as Amazon.com Inc., American Airlines, tobacco giant Reynolds American, private prison firm Geo Group Inc., Prudential Financial Inc., NextEra Energy Inc., the U.S. Sugar Corporation and the American Health Care Association.
In just five months, Ballard Partners’ federal lobbying operation has generated nearly $4 million in current and contracted business from foreign and domestic lobbying clients, according to a Center for Public Integrity review of lobbying records filed with the U.S. Congress and Department of Justice. That’s as much lobbying money as some established firms make in a year.
Ballard, whose firm remains a powerhouse in the Sunshine State, said he’s always been interested in entering the Washington, D.C., lobbying market.
“It seemed,” he said, “that this was the time if we were ever going to do it.”
Pressed on why he chose to launch his Washington lobbying business now, Ballard didn’t specifically mention Trump — for whom he raised 2020 re-election campaign money as recently as June 28 at Trump’s hotel in Washington, D.C.
Instead, Ballard broadly touted his long-standing relationships with Republican congressmen, governors and pre-Trump presidential candidates, such as John McCain and Mitt Romney.
“All relationships come into play,” said Ballard, who splits time between Washington and Tallahassee and lives out of a D.C. hotel about three nights each week while he searches for a home in the nation’s capital.
Ballard’s Trump connections are clearly part of his allure. And when a firm such as Ballard Partners hits the D.C. market, potential lobbying clients — such as the Dominican Republic — notice.
The island nation’s decision to hire Ballard’s firm is a big switch from their prior lobbying choices, Squire Patton Boggs and Steptoe and Johnson, both established K Street players.
Ballard has met with the ambassador personally and helped the country’s “orientation” with the Trump administration, said Felipe Herrera, counselor for the Dominican Republic’s embassy in the United States. Herrera wouldn’t give details on what this “orientation” entailed.
Ballard’s rapid ascent is a familiar Washington story — but the moral of the story is more than a little unclear.
For some veterans of D.C. political battles, this is simply how the system works: Hard work and access are rewarded, and prospective clients are justifiably searching for those who can best argue their interests.
For others, the Ballard tale represents but the latest cynical example that well-heeled insiders call the tune and the rest of us are left on the outside looking in — hardly the draining of the swamp that Trump has repeatedly promised.
Lisa Gilbert, vice president of legislative affairs at political reform group Public Citizen, described Ballard Partners’ connections to Trump as “an example of transactional favor building” and inherently problematic.
“You have an obligation to someone who helped you out in the past,” Gilbert said.
Added Steve Spaulding, chief of strategy for political reform group Common Cause: “People are cashing in on their connections for those willing to pay.”
Ballard has seemingly always been a man in a hurry. After graduating from the University of Florida and its law school, Ballard became the director of operations to then-Florida Gov. Bob Martinez at the tender age of 26.
Ballard has been a household name in Tallahassee ever since, serving in various roles for a variety of Republican politicians, including former Florida Gov. Charlie Crist and current Gov. Rick Scott. He served as the Florida finance chairman for the Republican presidential campaigns of both McCain in 2008 and Romney in 2012.
While generally in league with Republicans, Ballard isn’t a conservative caricature. He’s occasionallygiven Democrats money, touts his environmentalist credentials and has over the years lobbied for hundreds of clients, each of which have their own political agendas. He hires bona fide liberals to work at his firm.
Ballard even married into politics, as his wife, Kathryn, is the daughter of Jim Smith, a one-time Florida gubernatorial candidate who also served last century as Florida secretary of state and attorney general. Ballard and his father-in-law also worked together for many years.
Perhaps not surprisingly, Ballard’s official firm biography boasts that he “is one of the top political insiders in Florida.”
Whether they’re fans or foes of Ballard, Florida politicos tend to agree with this self-assessment.
“One of the three or four hardest working lobbyists in Florida's capitol,” said Peter Schorsch, publisher of FloridaPolitics.com and INFLUENCE Magazine, which tracks the governmental affairs industry in Florida. “Even after building the highest-grossing firm in the state, he still walks the hallways himself. Truly, a general who leads from the front.”
Ballard’s far-flung Florida operation has offices in Tallahassee, Tampa, Orlando, Fort Lauderdale, Coral Gables and Jacksonville. Tony Boselli, the former all-pro offensive tackle for the Jacksonville Jaguars, is a managing partner based in the Jacksonville office.
Then there’s Ballard’s West Palm Beach office —an eight-minute drive to Trump’s Mar-a-Lago Club resort, which Trump has dubbed the “winter White House.”
On Ballard’s Florida client list from 2013 to 2016? The Trump Organization.
Yet Ballard didn’t initially throw his support behind Trump’s presidential candidacy. He first supported the presidential bid of former Florida Gov. Jeb Bush. In late 2015, he abandoned Bush and backed Sen. Marco Rubio.
When Rubio quit the race in early 2016, Ballard backed Trump, whom he first interacted with three decades earlier while working as a young gubernatorial staffer for Martinez.
Trump, of course, won the presidency. And Ballard, who’d help The Donald raise millions of dollars in his quest to best Democrat Hillary Clinton, even cast a vote for Trump as a member of the Electoral College.
All the while, Ballard’s national profile has continued to increase, and he’s “doing it without being a peacock like so many of the other new faces to the city who have ties to Trump,” Schorsch said. “Brian's acting like he's been to the end zone before.”
This year, for example, Ballard joined the Republican National Committee’s national finance leadership team. He also served as vice chairman of Trump’s inaugural committee and as a member of the Trump presidential transition finance committee.
These are credentials many clients find attractive.
For example, Wallace Cheves, managing partner of Sky Boat Gaming and a new client for Ballard, said he signed on because of Ballard’s “class A name on national issues with the Republican party.”
Ballard’s D.C. office is now heavy on Trump campaign and transition veterans such as Susie Wiles and Dan McFaul. While Ballard may downplay his Trump ties, Wiles and McFaul aren’t being as shy about their connections.
McFaul’s Ballard Partners biography advertises his role as a Trump presidential transition team member and notes he was responsible for “recruiting and vetting potential appointees to the upcoming administration, specifically for the Department of Defense, Department of Veterans Affairs, the Armed Services and the Intelligence community.”
Lobbying disclosure records show McFaul is now lobbying the Department of Veterans Affairs for a Ballard client, Veterans Evaluation Services. The company declined to comment.
Wiles helped lead Trump’s Florida effort during the presidential campaign — a decisive March 2016 victory for Trump over Rubio.
Wiles’ biography describes her as “Florida’s Senior Strategist for the Donald J. Trump Campaign.” The biography further mentions that “Florida, the largest of the swing states in the 2016 cycle, was a winning state for Trump/Pence.”
Wiles’ long history in Florida politics includes a stint as chief of staff for John Delaney, the one-time mayor of Jacksonville who’s now president of the University of North Florida.
Delaney told the Center for Public Integrity that Wiles was poised to take a position in the Trump White House but decided against it.
“She likes to help her friends and she felt she could be more effective from outside the White House,” Delaney said.
Wiles declined to discuss particulars of the prospective Trump administration job beyond saying it related to her prior work both inside and outside government. (Her past clients have ranged from education interests to railroads.)
Does Wiles have qualms about using her ties to Washington political machinery — Trump, especially — to score points for paying clients?
"I wish the system didn't require it, that you could make a change where you wouldn't have to rely on that, but the government is so big and is based on influence by special interests,” Wiles said. “I wish it was different but this is the way it is.”
Trump’s “drain the swamp” mantra and executive order squelching certain lobbying activity doesn’t apply to his presidential campaign officials or transition team members, and several of them now work for lobbying clients — with mixed results.
Take Lewandowski, Trump’s first campaign manager. He launched a lobbying firm with another former Trump staffer. But Lewandowski faced accusations he was selling access to Trump, and he left the firm last month.
For Ballard, though, it’s been full steam ahead —with a stable that includes not just Trump supporters, but also more traditional D.C. power players. For instance, Ballard has also hired former Rep. Robert Wexler, D-Fla., who is quarterbacking the firm’s contract with Turkey.
While in Congress, Wexler served on the House Foreign Affairs Committee.
Former Rep. Bob Livingston, R-La., a lobbyist who himself once advocated for Turkey, recalls lobbying Wexler on Turkey’s behalf back in those days.
“He was very effective, bright and articulate” with a “genuine interest in Turkish issues,” Livingston said of Wexler.
Wexler calls lobbying “the same as lawyering, an honorable effort that serves a valid purpose.”
Also on Ballard’s team: Otto Reich, a former ambassador to Venezuela and prominent official in the administrations of presidents Ronald Reagan, George H. W. Bush and George W. Bush.
Reich, who at Ballard Partners specializes in international affairs, has been a controversial figure since the 1980s, when the U.S. General Accounting Office found he engaged in “prohibited covert propaganda” in a bid to sway public opinion in support of Nicaraguan contras.
Foreign clients now account for a significant share of Ballard Partners’ business. Disclosures filed with the Department of Justice show Ballard Partners has secured three high-dollar foreign clients among his nearly two-dozen domestic clients: Turkey, the Dominican Republic and the Socialist Party of Albania.
The firm’s contracts with those three clients are collectively worth more than $2.6 million annually, according to disclosures filed with the Department of Justice.
Turkey’s relations with the United States have grown especially complicated this year after Turkish President Recep Tayyip Erdogan’s security detail attacked and beat peaceful protestors outside the Turkish Embassy grounds in Washington, D.C.
More broadly, Turkey’s international reputation has become imperiled following its jailing of dissidents and journalists. Turkey is also pressuring the United States to extradite Fethullah Gulen, a Muslim cleric with close ties to U.S. politicians who Turkey blames for a failed coup attempt last year.
Meanwhile, two other Ballard clients — Univision and the Socialist Party of Albania — appear eager to court Trump’s administration after their own campaign-season conflicts.
Univision, a Spanish-language television network headquartered in New York City, refused to broadcast the Trump-owned Miss Universe and Miss USA pageants after he made disparaging remarks about Mexican immigrants while campaigning.
Trump later sued Univision for $500 million. The lawsuit has since been settled.
Trump himself booted Univision journalist Jorge Ramos from a campaign press conference in 2015.
Univision is now turning to Ballard to help mend the rocky relationship between Trump and the network.
Jessica Herrera-Flannigan, executive vice president of government and corporate affairs at Univision, declined an interview request. But she said in a written statement that the network hired Ballard Partners to “advise us on changing government policies and regulations, as well as on general telecommunications, immigration and small business issues.”
The Socialist Party of Albania, currently the ruling party in the Balkan nation, also has some fences to mend: Edi Rama, the current prime minister and party leader, said during the campaign that Trump represented a “threat to Albanian-American ties.”
The party did not return requests for comment. Nor did several other Ballard clients, including the American Health Care Association.
Several others refused to respond to a request for comment on why they chose Ballard’s firm — Amazon and American Airlines among them.
Ballard maintains the firm’s Washington office is “trying to honor the president and administration by not marketing relationships.”
“We don't like to beat our chest,” Ballard said, “or talk about things that are inappropriate.”
And given his burgeoning lobbying business, Ballard Partners apparently doesn’t have to.
Dave Levinthal contributed to this report.
This story was co-published by The Daily Beast.
Since Donald Trump became president in January, he and more than 400 of his appointees have together filed thousands of pages worth of information concerning their assets, income, business ties — and potential conflicts of interest.
The Center for Public Integrity and Reveal from The Center for Investigative Reporting are today asking you help us tell the stories that are hidden in these records by becoming a #CitizenSleuth.
Scour our searchable, sortable and public database of Trump administration financial disclosures to probe the mysterious companies contained within.
Or perhaps you have a tip about how a key Trump administration official’s friends or colleagues stand to benefit from knowing a presidential confidant.
Maybe you’ll simply spot something that looks strange — missing data, possible errors, someone's unusual work history or a business listing that doesn’t actually exist.
We’ve worked hard to make these complex records as easy to understand as possible. And we’re here to investigate your tips and answer your questions.
● Leave a public comment within our database. Start at the first tab, on the lower left, and work your way across from left to right. If you see something interesting, make a note in the “Comments” section available for every cell in the spreadsheet.
● Email tips to email@example.com.
● Reach out to us on Twitter using the hashtag #CitizenSleuth, first employed earlier this year as part of a successful effort to unmask donors to Trump’s inaugural committee.
Some of the people you’ll find in the #CitizenSleuth database are household names, such as Secretary of Energy Rick Perry, Trump chief strategist Stephen K. Bannon and Trump himself. (Trump administration officials are listed in alphabetical order.)
But you’ll find hundreds of other Trump administration officials who serve in critical capacities with minimal fanfare and news coverage.
These under-the-radar hires are no less important. Already, they’re helping shape U.S. policy on matters ranging from military affairs to environmental protection to student debt.
One way to better understand the Trump administration is to understand the vested interests of the president’s lieutenants, whose salaries are now paid for by U.S. taxpayers. After all, you can learn a lot about a person by knowing who they’ve worked for, how they've made money or, for that matter, to whom they owe money.
We know this much: Taken together, Trump appointees reported affiliations with at least 950 different limited liability companies/partnerships, at least 350 different corporations and more than 200 nonprofit groups at the time they accepted federal government jobs.
About the #CitizenSleuth project:
The #CitizenSleuth project evolved from an earlier Center for Public Integritycollaboration with ProPublica — a fellow Pulitzer Prize-winning nonprofit news organization — which originally obtained Trump administration disclosure forms from government sources and made the disclosures available as PDF files.
Center for Public Integrity’s news developer Chris Zubak-Skees, with the assistance of Dow Jones New Fund intern Iuliia Alieva, extracted data from these disclosure reports and their subsequent amendments using a software tool Zubak-Skees created and made the information searchable and sortable.
Center for Public Integrity staffers also spent dozens of hours cleaning and reformatting data — particularly for Trump’s financial disclosures — before releasing it as part of the Trump administration financial database.
Wilkie’s earlier #CitizenSleuth crowdsourcing project helped identify several errors and anomalies in Trump’s inauguration fundraising disclosures and led to Trump amending and reissuing a mandatory report to the Federal Election Commission.
Washington, D.C.-based correspondent Amy Walters and investigative reporter Matt Smith will lead reporting efforts for Reveal, the Peabody Award-winning program from The Center for Investigative Reporting and PRX, heard on more than 420 public radio stations nationwide.
The Virginia Supreme Court has ruled against an appeal by the Center for Public Integrity asking that state regulators be required to release financial documents filed by title-loan companies.
Rather than deciding whether the financial reports were public records exempted from disclosure, the court issued a procedural ruling Thursday that the Center failed to show how Virginia’s State Corporation Commission erred in not releasing the reports. The SCC regulates utilities, banks, insurance and securities companies.
“Even if the Commission ultimately had concluded that the Center's interpretation of [the law] was correct, that would only mean that the statute does not prohibit the Commission from releasing the reports,” the court wrote in its opinion in Center for Public Integrity against TitleMax of Virginia, Inc., et al. “It would not mean that the Commission is required to release them.”
Scott Surovell, who argued the case for the Center, said the Supreme Court took a “hyper-technical view of our argument,” rather than ruling on whether a corporation can be considered an individual, whose financial information cannot be released.
The Supreme Court case grew out of a 2015 Center for Public Integrity investigation into the business practices of the nation’s three largest title-loan lenders, TitleMax of Virginia Inc.; Anderson Financial Services LLC, doing business as LoanMax; and Fast Auto Loans Inc.
The ruling does nothing to address what Surovell called the “real problem,” which is that the SCC isn’t subject to Virginia’s freedom of information act, which means it is not clear what the commission must disclose to the public.
“In FOIA world, you have to cite an exemption” to defend not releasing information, Surovell said. “In SCC world, it’s not clear what the rule is,” which leaves secret large amounts of information the commission has on file.
Surovell, who also is a Democratic state senator representing a district in Northern Virginia, said that without better guidance from the courts or Virginia’s state legislature more legal challenges to the SCC will likely occur.
The title-loan industry, which is dominated by the three Georgia-based companies, has come under fire from consumer advocates and some lawmakers as predatory, charging interest rates that can exceed 300 percent in some states and seizing the cars of borrowers who fail to repay their loans — typically low- to middle-income individuals.
The Center found that states have tried to establish tighter regulations over the industry’s lending practices, but title lenders have fended off those efforts, thanks in part to millions of dollars in campaign contributions, aggressive challenges to regulators who seek to rein them in and loan contracts written so that aggrieved borrowers have little legal recourse.
The SCC releases aggregate data on title lending in the state, reporting in 2014, for example, that nearly 500 title loan shops operated in Virginia and charged an average interest rate of 222 percent. But the agency doesn’t release information specific to each lender in its report, including detailed sales figures, volume of loans, interest rates, the number of cars repossessed when borrowers default, and how often the lenders get into trouble with state and federal regulators.
“This is important information,” Surovell said. The data can show if one lender has more loan defaults, charges much higher interest rates, repossesses more cars or has an inordinate number of regulatory judgments, he said.
“We need to know these things to understand whether the title-lending industry is working properly,” Surovell said.
As part of its investigation, the Center requested the financial reports the three title lenders file with the Bureau of Financial Institutions, which is part of the SCC. Bureau officials reported to the SCC that it could not find any legal basis for keeping the records private but also told lenders they could file petitions with the SCC if they objected.
They did. As a way to resolve the dispute, state officials gave the title loan companies a chance to submit redacted copies of their annual reports and cite a legal basis for withholding any portion of the reports. The reports were heavily redacted. In one report, Fast Auto Loans disclosed that it operates 69 stores in Virginia, but little else.
The title lenders argued to the SCC that the financial information is protected under Virginia law, which doesn’t allow the SCC to release “personal financial information,” and the SCC should treat the companies like it does any individual. The companies argued the information contained “trade secrets” and releasing it to the public would cause “irreparable damage.”
The SCC ruled in March 2016 that the term “personal financial information is ambiguous since it can be understood in more than one way for the purpose of this statute.” The commission also directed its staff to seek “clarification” of the law from the state legislature.
The Center filed an appeal with the Virginia Supreme Court.
The court noted in its written opinion that the SCC “did not resolve this ambiguity” and that it was the “historical practice” to treat the “annual reports as confidential, and there has been no statutory change that would require a change in that practice."
“As the Commission found, there is no statute ‘that would require a change in [its historic] practice’ of only releasing the cumulative data from the reports in an aggregated form,” the court ruled.
A bill that would make the reports public was introduced in the Virginia General Assembly this year by Sen. Creigh Deeds, a Democrat who represents a district including Charlottesville, Virginia. But it was tabled pending the outcome of the Supreme Court case. The bill is likely to be re-introduced.
Homeland Security employees who screen refugee applicants are objecting to proposed legislation that could narrow refugee eligibility and empower state or local officials to bar refugees from their jurisdictions.
The Republican-sponsored “Refugee Program Integrity Restoration Act of 2017,” or H.R. 2826—which would codify these changes—was approved June 28 by the House of Representatives Judiciary Committee in a 15-11 vote split along party lines. The measure would also give priority to those claiming persecution over minority religion status as compared to those asserting they faced persecution for some other reason.
Rep. Raul Labrador, R-Idaho, one of the bill’s sponsors, said in a news release that his proposal strengthens U.S. national security because it “gives states and communities the power to decline resettlement,” and fixes the annual cap for refugees at 50,000, a figure President Trump adopted that’s half what former President Obama set before leaving office. The bill would transfer power to alter that cap from the president to Congress.
The legislation would also require that refugees wait three years, instead of one, to apply for permanent residency, and would impose new and prolonged vetting procedures abroad and on U.S. soil aimed at foiling terrorists from infiltrating the refugee admissions process.
The bill echoes elements of executive orders that Trump issued in January and revised in March to temporarily stop the admission of refugees and certain nationals with other types of visas. Trump’s executive orders also urges a greater role for local jurisdictions in deciding whether refugees could be settled there. The U.S. Supreme Court has allowed portions of the March order seeking a temporary bar on admissions to go forward pending a decision on a challenge to the order.
Labrador was not available for comment, his staff said.
His bill, which has 11 co-sponsors but no floor vote scheduled yet, attempts to lock in powers for states or municipalities that have recently been rejected by federal appeals court judges.
In 2016, when Vice President Mike Pence tried, as a former governor, to block Syrian refugees from Indiana, a three-judge federal appeals court panel ruled against him, finding a lack of evidence for his arguments that the Syrians would jeopardize safety. Labrador’s bill “provides specific congressional authorization to allow local officials to determine what is best for their communities,” an aide to the House Judiciary Committee said in a statement.
On June 27, the day before the Judiciary Committee vote on Labrador’s bill, the union representing officers who vet refugee applications sent a letter of objection to Rep. Zoe Lofgren, D-California, the ranking Democrat on the Judiciary Committee’s Subcommittee on Immigration and Border Security.
The letter from the American Federation of Government Employees Local 505’s National Immigration and Naturalization Service Council 119 called the proposal “needlessly cruel towards the world's most vulnerable” and a “politically-driven bill that fails to achieve what it purports to accomplish.”
The letter was signed Council 119 president Michael Knowles, whose work in refugee clearance goes back to the Vietnam War; he said refugee officers were not consulted in the drafting of the bill.
“Allowing localities to reject (refugees) placement in a particular community rejects the freedom we all share in this country to live where we please,” the refugee officers wrote.
In January, Sen. Ted Cruz, R-Texas, introduced his own State Refugee Security Act”, or S. 211, to give state governors the right to block refugees if they decide federal authorities haven’t provided “adequate assurance” that the refugees don’t pose a security risk. That bill was referred to the US. Senate Committee on the Judiciary.
Picking refugees with skills?
In an interview, Knowles said that refugee officers are also concerned that Department of Homeland Security vetting of refugees might include screening to determine what “skills" those refugees could contribute to the American economy.
“Potentially, yes,” said David Lapan, Deputy Assistant Secretary for Media Operations at DHS, confirming that such a possibility is under review. “But we’re looking at a wide variety of elements,” Lapan added.
A skills test would mark a profound change in how the United States has decided, based on legislation developed after World War II, who merits protection from violence and persecution, Knowles said.
“The (current) litmus test is: Does the person have a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group or political opinion,” Knowles said. There are additional priorities, including U.S. ties, family reunification and imminent danger, but there’s been no skills test for millions of refugees admitted through the Cold War era and beyond.
While Trump has advocated more skills-based visas for immigrants, he hasn’t pushed the idea publicly for refugees. His January executive order, however, did call for all immigration programs to include “a process to evaluate the applicant’s likelihood of becoming a positively contributing member of society” and “ability to make contributions to the national interest.”
The March order dropped that specific language.
The refugee officers’ union, in its letter protesting Labrador’s bill, said that despite “rhetoric” alleging insufficient vetting by officers, refugees approved for U.S. settlement “already undergo the most extensive and careful vetting process of any immigrant seeking admission to the United States.”
The letter said that process involves “numerous layers of extremely careful vetting,” including scores of security checks, biometric reviews, multiple interviews, 100 percent supervisory review and specialized headquarters’ review for more complex cases, “particularly when a national security concern is identified.”
The process begins after United Nations screenings and can take up to two years, as appeals court judges who ruled against Pence noted in their ruling. Referrals of applicants also often come from U.S. officials, diplomatic and military, refugee officers say.
Labrador's proposal comes at a time when the number of refugees and displaced people globally is the highest it’s been since World War II, with more than 60 million people on the run, including millions of Syrians scattered through the Middle East and Europe. But there is also intense anxiety over sporadic Islamic State-inspired attacks in Europe, the bloodiest, like the Paris 2015 attack, involving radicalized European Union citizens, some of whom posed as refugees flooding, unvetted, into Europe.
Several attacks in Germany in 2016 committed by young asylum seekers also raised questions of mental illness. In 2011, two Iraqis refugees were arrested and sentenced to prison for plotting to send weapons and money to terrorists in Iraq. One of the men was linked by fingerprints to an unexploded an unexploded roadside bomb in Iraq. Iraqi refugees were re-vetted and the program was suspended and overhauled.
The letter submitted by the refugee officers argued that in elevating “minority” religion above others, Labrador’s proposal “sets the stage for the U.S. to selectively choose certain religious groups over others (such as political or ethnic affiliation) that are equally in need of protection from persecution.”
The provision extending the mandatory wait to apply for permanent legal residency to three years “places (refugees) back into a limbo, where they risk being sent back to a dangerous country,” the officers also argued. Additionally, they said they were disturbed by language that says that if “violence is not specifically directed at the person” applying, he or she can’t be declared a refugee. “Refugee officers have interviewed many individuals whose family and friends were killed by ‘bad guys’ as a way to get at the applicant who is now before (in interviews),” the officers wrote.
The refugee officers wrote that they welcome the proposal’s call for more resources for fraud detection and Government Accountability Office reviews of the vetting process.
White House Chief Strategist Stephen K. Bannon failed to properly disclose more than $2 million in mortgage debt on his required financial disclosure form — an error that was compounded when top White House ethics officers certified that Bannon's incomplete disclosure form was complete and complied with federal rules.
Instead of disclosing the creditors for the four home loans he reported, Bannon simply wrote "HOME LOAN" on each line of the form. Bannon’s form was the only one of more than 400 forms filed by Trump Administration appointees — and reviewed by the Center for Public Integrity and Reveal— that did not specifically list the creditors.
The reason mortgages and creditors are disclosed is to ensure that government officials and those entering government are paying market interest rates for their loans, and not receiving preferential treatment from creditors on the terms.
"What's most significant to me about this situation is that the chief ethics officers at the White House signed off on [Bannon's forms]," said Kathleen Clark, a professor of law at Washington University in St. Louis and an expert on government ethics.
"Individuals make mistakes. The real story is how shoddy the ethics process is in the White House," Clark said. "This raises an important question about the quality of the work that's being done, and how careful these White House ethics officers are."
The absence of such basic information on Bannon's financial disclosure appears inconsistent with the sworn statement Bannon made when submitting his documents. In it, Bannon had pledged the disclosure’s contents were "true, complete and correct to the best of my knowledge."
Bannon, one of Trump’s most influential and controversial advisers, signed his financial disclosure on March 30. The following day, White House ethics lawyers Stefan Passantino and James Schultz both independently certified that Bannon's disclosures were complete, despite the missing information. The White House then transmitted the 12-page disclosure form to the Office of Government Ethics.
Bannon’s omissions were first spotted by volunteers for #CitizenSleuth, a project launched Friday by the Center for Public Integrity and Reveal from the Center for Investigative Reporting. The crowd-sourced investigation is examining the detailed financial disclosures from more than 400 Trump administration officials.
Bannon declined to comment on his filings. White House press officials declined to discuss the matter on the record.
In response to questions from the Center for Public Integrity, a White House official with knowledge of Bannon's filings said that the lender for the first three mystery mortgages listed — HOME LOAN #1, HOME LOAN #2 and HOME LOAN #3 — was Chase Home Loans. The creditor for HOME LOAN #4 is Quicken Loans.
As for why this information was not properly disclosed at the outset, the official, who was not authorized to speak with reporters, said there had been "a mistake," and that Bannon's disclosure forms are currently being amended. The official did not elaborate.
A Center for Public Integrity review of local property records indicates that two of Bannon’s loans currently held by Chase originally came from GreenPoint Financial, a now-defunct subprime lender. In 2007, the New York State Attorney General’s Office accused GreenPoint of discriminating against minorities. GreenPoint later settled the case for $1 million.
For government ethics experts, Bannon's incomplete filing is only the latest example of what they consider the Trump’s administration's lax attitude toward executive branch ethics and potential conflicts of interest.
The discovery of Bannon's incomplete ethics forms came less than a week after Walter Shaub, the director of the Office of Government Ethics, announced his resignation. Shaub will now join the Campaign Legal Center, a nonpartisan election reform organization.
Shaub had frequently sparred with the Trump administration, most recently over Trump’s decision in May to retroactively grant ethics waivers to a slew of senior administration officials.
This decision freed some Trump officials to ignore rules that prohibit White House employees from interacting with their former employers, who in some cases spend significant money attempting to influence federal policy.
President Barack Obama also granted ethics waivers during his administration, but Trump has been more prolific in doing so.
One of those Trump ethics waivers appeared to be specifically designed to retroactively protect Bannon, who has reportedly been in contact with his former employer, Breitbart News, since joining the Trump administration.
The White House press office did not respond to questions about Bannon’s financial disclosure forms. But Alexandra Preate, a veteran Republican public relations strategist, called the Center for Public Integrity on Bannon’s behalf. Preate has previously represented Bannon and Breitbart News and does not work for the White House. She also refused to speak on the record about Bannon’s financial disclosure.
In an effort to understand Bannon’s mortgage debt, the Center for Public Integrity reviewed property deeds and real estate records to piece together details of Bannon's four misreported loans. Taken together, the loans total $2,012,500 and span more than a decade, according to those records.
Bannon obtained two of these loans by borrowing against the value of real estate he already owned. It’s unclear what Bannon, whose business ventures have ranged from real estate to movie production, ultimately used this borrowed money for. The other two misreported debts were connected to the purchase of properties.
Starting in 2002, Bannon borrowed $382,500 from GreenPoint Financial in the form of a 30-year adjustable rate mortgage, or ARM. The 3.125 percent interest rate he reported in his disclosure in March of this year represents the current rate he pays, which is significantly lower than his initial 6.62 percent rate.
A few years later, Bannon borrowed $905,000, using another ARM from GreenPoint, this time borrowing against his home in Laguna Beach, California.
In 2006, Bannon again borrowed against his Laguna Beach house, this time taking out a $500,000 home equity line of credit from Washington Mutual.
When Washington Mutual collapsed during the subprime mortgage crisis of 2008, Bannon's mortgages were among the millions of home loans transferred to JPMorgan Chase, which paid pennies on the dollar for the debt.
In 2015, as Trump's nascent presidential campaign was heating up, Bannon borrowed $382,500 from Quicken Loans against the value of a North Carolina golf condo, also using a 30-year ARM. Bannon reported the interest rate on that loan as 4.125 percent.
Despite his property holdings, Bannon lived a largely transient lifestyle during the decade before he became the Trump campaign’s chief executive, bouncing between New York; Washington, D.C.; Florida and California. This raised questions about what state he was legally registered to vote in.
This article was co-published by Reveal.
They landed, one after another, in 2015: plans for nearly a dozen interstate pipelines to move natural gas beneath rivers, mountains and people’s yards. Like spokes on a wheel, they’d spread from Appalachia to markets in every direction.
Together these new and expanded pipelines — comprising 2,500 miles of steel in all — would double the amount of gas that could flow out of Pennsylvania, Ohio and West Virginia. The cheap fuel will benefit consumers and manufacturers, the developers promise.
But some scientists warn that the rush to more fully tap the rich Marcellus and Utica shales is bad for a dangerously warming planet, extending the country’s fossil-fuel habit by half a century. Industry consultants say there isn’t even enough demand in the United States for all the gas that would come from this boost in production.
And yet, five of the 11 pipelines already have been approved. The rest await a decision from a federal regulator that almost never says no.
The Federal Energy Regulatory Commission is charged with making sure new gas pipelines are in the public interest and have minimal impact. This is no small matter. Companies given certificates to build by FERC gain a powerful tool: eminent domain, enabling them to proceed whether affected landowners cooperate or not.
Only twice in the past 30 years has FERC rejected a pipeline out of hundreds proposed, according to an investigation by the Center for Public Integrity and StateImpact Pennsylvania, a public media partnership between WITF in Harrisburg and WHYY in Philadelphia. At best, FERC officials superficially probe projects’ ramifications for the changing climate, despite persistent calls by the U.S. Environmental Protection Agency for deeper analyses. FERC’s assessments of need are based largely on company filings. That’s not likely to change with a pro-infrastructure president who can now fill four open seats on the five-member commission.
“They don’t seem to pay any attention to opponents,” said Tom Hadwin, a retired utility manager from Staunton, Virginia. He doubts FERC will be swayed by the flood of written comments, including his own, and studies critiquing the Atlantic Coast pipeline. It’s the largest of the pending projects and would wind nearly 600 miles from West Virginia into his home state and North Carolina.
“FERC will issue the certificate,” Hadwin said. “They always have.”
FERC declined Center and StateImpact Pennsylvania requests to interview Cheryl A. LaFleur, its acting chairman, as well as senior officials. In response to written questions, the agency said it hasn’t kept track of the number of projects it denies. It provided a brief statement offering little insight into its pipeline-approval process. FERC spokeswoman Mary O’Driscoll wrote that, as a quasi-judicial body, “we must be very careful about what we say.”
In the statement, the agency said the Natural Gas Act of 1938 requires it to approve infrastructure projects that it finds would serve “the present or future public convenience and necessity.” FERC wouldn’t explain how it weighs competing interests; instead, it pointed to a 1999 policy outlining how it defers to market forces. That policy, still in effect, was influenced by, among others, Enron, the energy firm whose spectacular collapse in 2001 led to prosecutions and bankruptcy.
Former insiders defend the commission, describing its mandate as limited. Renewable-energy consultant Jon Wellinghoff, a FERC commissioner from 2006 to 2013, including nearly five years as its chairman, said the agency has little leeway for denying a pipeline. “It has to stay within the tracks,” he said.
Donald F. Santa Jr., a former FERC commissioner who heads the pipeline industry’s trade group, the Interstate Natural Gas Association of America, said the agency’s low denial rate merely reflects the quality of the projects. They’re so expensive to build that few make it off the drawing board into FERC applications.
“It’s the envy of the world,” Santa said, referring to the nation’s pipeline network. “It is something that has enabled us to have remarkably competitive natural gas markets that have benefited consumers and the economy.”
Two former directors of the FERC office overseeing pipelines say no project survives the vetting process without route alterations or other changes. On occasion, FERC has delayed or rescinded approval of projects that don’t meet specific conditions. But at every turn, the agency’s process favors pipeline companies, according to Center and StateImpact Pennsylvania interviews with more than 100 people, reviews of FERC records and analyses of nearly 500 pipeline cases.
Among the findings:
● It’s hard to see where FERC ends and industry begins. Dozens of agency staff members have had to recuse themselves in recent years while negotiating jobs at energy firms. Most commissioners leave FERC to work for industry as well, in some cases lobbying their successors.
● Four of six major pending pipelines in the Appalachian basin were proposed by companies planning to sell pipeline capacity to utilities they own. Analysts who have scrutinized some of these cases say this new wave of self-dealing raises the risk of companies pursuing unneeded infrastructure that utility customers would end up paying for. FERC dismissed such concerns about two pipelines approved last year.
● The Obama-era EPA repeatedly asked FERC to scrutinize projects’ climate impacts, saying in a rebuke in October that its failure to properly do so did not comply with a key environmental law.
● FERC delays appeals of its pipeline approvals for months while allowing companies to begin construction. In seven cases since 2015, gas already was flowing in the pipeline by the time opponents could challenge it in court.
In February, on his last day as a commissioner, former FERC Chairman Norman Bay recommended that the agency evaluate the cumulative effects of increased gas production in the Marcellus and Utica shales, mostly in Pennsylvania, West Virginia and Ohio — an analysis environmentalists have advocated. Bay urged the agency to be more rigorous in its reviews.
“It is inefficient to build pipelines that may not be needed over the long term and that become stranded assets,” wrote Bay, an Obama appointee.
But FERC has resisted making such reforms. Now, with FERC down to a single commissioner and temporarily without a quorum, President Donald Trump gets to reshape the agency. Among those he has tapped for the commission is a pro-gas utility regulator from Pennsylvania, Robert Powelson, who in March likened protests against pipelines to “jihad,” later calling that “an inappropriate choice of words.”
“We’ve got abundant supply,” Powelson said at a gas-industry conference. “What we don’t have is adequate pipeline infrastructure.”
Close ties with industry
In the past few years, FERC has overseen what it says is one of the largest boosts in natural-gas pipeline capacity in American history. It issued certificates in 2015 for projects that collectively can carry 14.5 billion cubic feet of gas per day. The next year, it approved an additional 17.6 billion cubic feet.
Newly built pipe has helped move Appalachian gas to markets along the East Coast and in the Midwest, the agency says.
That, in essence, explains how FERC sees its role — dating to its birth in a decade marred by energy crises. In 1977, amid a natural-gas shortage and after an oil embargo by the Organization of Petroleum Exporting Countries, Congress created the agency and placed it within, yet independent of, the new U.S. Department of Energy. FERC’s mission: “Reliable, Efficient and Sustainable Energy.”
Proponents of the pipeline buildout argue that more American gas brings jobs to places sorely in need of them by fueling energy-hungry factories. And gas has bypassed higher-carbon coal as the dominant energy source in the U.S. But grassroots pushback is coming from both ends of the political spectrum, driven by concerns over the climate and individual property rights.
To such critics, FERC has come to epitomize a captured regulator.
Records obtained by the Center and StateImpact Pennsylvania through Freedom of Information Act requests reveal an exceptionally cozy relationship between regulator and regulated. Emails and official calendars from mid-2010 through 2016 show a steady march of industry representatives before commissioners. Large energy companies — Kinder Morgan, Dominion Energy, Energy Transfer Partners, Duke Energy — scheduled at least 93 meetings with FERC officials during those 6 ½ years. Trade groups like Edison Electric Institute and American Gas Association wooed commissioners and staff with invitations to executive dinners and after-hours parties. Former commissioners-turned-lobbyists, such as INGAA’s Santa, called on their successors.
By contrast, records show, FERC commissioners met with environmental and public-interest groups 17 times over this period.
In many ways, FERC operates like a one-way street: Commissioners may come to it from legislative or regulatory bodies, but almost always leave for industry. Eighty percent of the 35 former commissioners have spent at least part of their post-FERC careers at energy companies or law firms, trade groups and consultancies representing them. Many have ties to natural gas through work or positions on corporate boards.
There’s a similar pattern among FERC’s rank and file. Since 2012, staff members have submitted more than 50 requests to recuse themselves from regulatory work while seeking jobs at energy firms or consulting groups hired by the industry, agency documents show.
Some who have left FERC return to do the bidding of their new employers. In email exchanges in 2016, one woman who now works for Edison Electric Institute called on her former co-workers multiple times — seeking materials for an email blast, for instance, or inviting FERC commissioners to EEI events.
“Are you ready for the protestors??” she wrote in one email to her former colleagues. “Too bad you guys can't move the open mtg like last year. They just keep sucking!”
Many critics see an inherent industry bias at FERC: Its budget is fully covered by fees collected from regulated companies. Last year, a Pennsylvania environmental group sued FERC over this funding mechanism, alleging it creates “a perverse incentive” for the agency to build pipelines. The lawsuit is on appeal after a federal court dismissed it in March, noting that Congress ultimately sets FERC’s budget.
This is the agency’s approval process: Take proposals as they come, see if the pipeline has long-term customer contracts, gather public feedback, try to keep local impacts to a minimum and assure basic safety standards.
J. Mark Robinson, an industry consultant, worked at FERC from 1978 to 2009, heading the office overseeing gas pipelines in his final years there. Interstate transmission lines often never go forward, he said, but FERC’s results speak for themselves. Pipelines get built; people get energy.
Pipeline companies, for their part, say the review process is exacting. Bruce McKay, senior energy policy director at Dominion, majority owner and operator of the Atlantic Coast pipeline, said the companies behind the proposal have submitted 100,000 pages of documentation to FERC and made 300 route adjustments to avoid ecologically sensitive areas at the agency’s request.
“They’re not there to do our bidding,” McKay said of FERC.
It doesn’t seem that way to Chad Oba, a mental-health counselor from Buckingham County, Virginia. There the Atlantic Coast developers plan to build a massive compressor station where engines would throb to keep gas moving. Oba attended a FERC meeting on the project in 2015, driving nearly an hour with as many neighbors as she could to testify. They didn’t want an industrial complex in their rural area, already crisscrossed by four gas pipelines. They questioned its siting amid a largely poor, African-American community founded by freed slaves.
“I thought, ‘Surely, these things will be considered,’” said Oba, of the anti-pipeline group Friends of Buckingham. But FERC has backed the location. The agency has never held a hearing in her county, despite requests from her group and a county commissioner.
“They’ve treated Buckingham very badly,” she said.
Such sentiments may not be what Charles B. Curtis, FERC’s first chairman, envisioned in 1979, when he wrote in congressional testimony that “we must create public confidence … and demonstrate that regulation can work effectively to promote the public interest.” At the time, he was looking to fund a congressionally mandated Office of Public Participation at FERC.
That never happened. Members of Congress couldn’t agree on funding for the office that year. The Center and StateImpact Pennsylvania found no evidence that FERC tried to launch the office again, despite congressional requests and a formal petition to do so.
Those seeking to challenge a pipeline frequently run into roadblocks. Before mounting a case in court, opponents must first appeal to FERC, which, by law, has 30 days to act. Yet records show commissioners routinely fulfill this obligation by granting themselves more time to issue a final ruling, leaving the challengers in limbo. Meanwhile, FERC allows pipeline companies to move ahead. By the time opponents get to court, construction can be well underway — or finished.
Ryan Talbott, an environmental lawyer at Appalachian Mountain Advocates, said he’s seen this pattern play out in every pipeline case he’s fought — more than a dozen so far. Last year, he set out to analyze FERC’s record on pipeline appeals. He found that commissioners take, on average, eight months to deliberate — then deny the appeals. A lawsuit filed against FERC seeks to have this practice declared unconstitutional.
The agency declined to comment.
FERC’s methods have fueled a grassroots campaign against it. Pipeline opponents have protested outside its Washington, D.C., headquarters since 2014. Some have gone on hunger strikes, interrupted commission meetings or picketed commissioners’ houses. Last year, 182 groups in 35 states called for congressional hearings into “the many ways communities are being harmed by FERC.”
Current and former officials consider the protests misplaced. Comprehensive energy regulation isn’t within FERC’s purview, they say; those who want changes should talk to Congress.
FERC opponents have done that, to no avail. But William Penniman, a retired lawyer who represented pipeline firms before FERC and is now active with the Sierra Club’s Virginia chapter, said the agency already has the authority to do more, yet chooses not to.
“Climate change, stranded assets, the construction bubble — they are not coming to grips with that,” he said.
Pressing FERC on climate
Gas-company executives often pitch their fuel to FERC as a long-term necessity for the country, filling in for renewable energy sources when the sun fades or the wind lags, powering industrial furnaces, heating homes. Companies propose new pipelines meant to last 50 years or more, presenting them as climate-friendly.
Environmentalists disagree, however, and are pushing FERC to dig deeper. Each additional gas pipeline, they warn, will make it easier to delay no-carbon alternatives and could lock in even worse effects of global warming.
Natural gas burns cleaner than coal, giving off about half the planet-heating carbon dioxide and a fraction of the toxic air emissions. Yet to avoid the worst of the heat waves, droughts, floods and other consequences of climate change, the Obama White House said the U.S. needed to cut greenhouse-gas emissions by at least 80 percent below 2005 levels no later than 2050. That’s all emissions from all sources, not just electricity and heating. And it’s 33 years from now, less than the lifetime of a pipeline.
Indeed, some advocates have calculated that new pipelines in the Appalachian basin would yield enough greenhouse-gas emissions from natural gas alone to surpass that goal.
That’s because the primary component of natural gas — methane — is a short-lived yet powerful greenhouse gas also contributing to climate change. Methane wafts into the atmosphere during every stage in the gas supply chain: Wells, processing facilities, pipelines and compressor stations all leak. Some vent methane by design.
The EPA has pegged the national rate at which methane escapes from oil and gas drilling sites at between 1 and 2 percent, based on industry estimates. Some independent research suggests that may be accurate.
But Robert Howarth, an environmental biology professor at Cornell University, estimates that methane emissions produced by shale gas from wellhead to delivery could add up to a 12-percent leak rate — causing substantially more warming in the short term than coal. Howarth sees the rapid rise in gas development as a contributor to the recent spike in global temperatures, including record-breaking heat waves in 2015 and 2016.
“The buildout of pipelines,” he said, “is a true climate disaster.”
Despite prodding from the EPA since 2013, FERC hasn’t taken a comprehensive look at the climate effects of gas projects before approving them. The agency only began estimating greenhouse-gas emissions from the burning of gas last year, and not in all cases. The total emissions for five pipelines, all pending: 170 million metric tons per year combined, the warming equivalent of 50 coal plants.
FERC refused to comment on its climate reviews, citing unspecified litigation. The Obama EPA contended that FERC has a duty to evaluate a pipeline proposal’s climate impacts under the National Environmental Policy Act. EPA officials said so in a pointed letter to FERC in October, after yet another pipeline review failed to estimate production or end-use emissions, calling the absence of these calculations “very concerning.”
The EPA says productive discussions have taken place since. But FERC has yet to evaluate greenhouse- gas emissions for pipelines as thoroughly as its counterpart urged.
It also doesn’t delve into whether electric utilities seeking gas for future plants could handle demand another way, such as energy efficiency and renewables. Such alternatives, FERC says in its reviews, would not fulfil the purpose of the project — “to transport natural gas.”
It boils down to a dispute about how far FERC can or should go.
“FERC has no legislative authority whatsoever to look at climate impacts,” said Wellinghoff, one of the only former commissioners with a renewable-energy background. “I would have loved to have had that authority at FERC, but I didn’t.”
Still, people keep pressing FERC to act. Last year, the Sierra Club and other groups sued the agency over its failure to calculate greenhouse-gas emissions from the since-built Sabal Trail pipeline, which runs from Alabama into Georgia and Florida. At a D.C. appellate court hearing in April, judges asked a FERC lawyer why the agency hadn’t done so.
The lawyer said FERC had determined the project wouldn’t meaningfully contribute to climate change. Judge Judith W. Rogers said it wasn’t possible to know that without doing the calculations.
“FERC said, ‘We’re just not going to do anything,’” she said.
In the 1990s, FERC posed this question: Was its pipeline-approval process working well? One company argued that the agency needed “to shift its focus away from command-and-control regulation towards policies that increasingly rely on market forces.”
That company was Enron. In 1999, its free-market views influenced FERC’s policy on how it would weigh projects. Years later, a New Jersey man fighting a pipeline that would run 167 feet from his daughter’s bedroom read the historical document with outrage and disbelief.
“You might have heard of Enron,” said Mike Spille, a software engineer trying to fend off the PennEast project, planned in Pennsylvania and his state. “It was a big giant bubble company that exploded and lots of people went to jail. Companies like Enron are the ones that set this FERC policy, and it’s part of the reason why it’s so bad.”
For the agency, customer contracts for pipelines are “strong evidence” of what the market wants. Since 1999, it has never denied a project that had them. The two it rejected did not.
Pipeline company executives believe this makes sense. No developer would sink potentially billions of dollars into an unnecessary project, they say. No utility or other gas shipper would pay millions of dollars for unneeded capacity.
But relying on contracts to judge need can be problematic. The Appalachian pipelines illustrate that.
First off, some of them are getting eminent-domain authority to take gas out of the country — there simply isn’t enough domestic demand, analysts say, which is something FERC does not consider.
Three new or pending Appalachian pipelines have space set aside for gas going to Canada. Another played up its proximity to Dominion’s nearly complete export terminal in Maryland. Even projects pitched as purely domestic might not end up that way — pipelines interconnect.
Beyond that, many of these pipeline contracts have an incestuous quality. Companies are building them for their own subsidiaries — mostly electric or gas utilities and gas producers. It’s as if one hand wrote the contract and the other signed it.
Industry experts say this trend increases the risk of overbuilding. One reason is that interstate pipelines are more profitable than power plants and other infrastructure that utilities erect for themselves.
“It’s a nice way to make money,” said Greg Lander of Skipping Stone, a gas- and electric-industry consulting firm. “The market need isn’t there.”
Lander’s firm, hired by an environmental group to examine PennEast, found no economic justification for the pipeline, which will mostly serve utilities and other firms owned by the developers. The New Jersey agency representing utility customers is also skeptical.
“NJ Rate Counsel is concerned that … the ‘need’ for the Project appears to be driven more by the search for higher returns on investment than any actual deficiency in gas supply,” the agency wrote to FERC last year.
It urged FERC to examine whether the contracts reflected true demand. FERC didn’t. Instead, it gave the pipeline a preliminary thumbs-up, the last step before approval.
PennEast spokeswoman Patricia Kornick said the project would improve reliability and ease price fluctuations. Companies signed up “because they recognize the need for an abundant, reliable, clean energy source,” she wrote in an email.
Het Shah, who leads natural gas market research at Bloomberg New Energy Finance, a consulting firm, said the Appalachian boom isn’t just about new pipelines, but also older ones turning flow around to push gas out of the region. It’s “definitely an overbuild,” he said, but he sees a strategy driving it — exports.
International markets could help Appalachian producers battered by low prices. But it makes landowners along pipeline routes livid. They don’t see how it’s in the public “convenience and necessity” to seize private property in America so firms can make money selling gas outside the country.
That’s what people told FERC about Northern Access 2016, a Pennsylvania-to-New York pipeline that would feed much of its gas to Canadian markets. The commissioners said in February that this was a matter for the Energy Department — not noting that the other agency automatically approves exports to Canada.
The point, FERC said, was that all the capacity had been contracted. It approved the pipeline.
The fight on the ground
The policy debates around pipelines can seem far away to those living in isolated communities in west-central Virginia, the epicenter of opposition to the Atlantic Coast project. Residents who don’t consider themselves environmentalists don “NO PIPELINE” T-shirts and hats and routinely show up at opposition rallies.
In Virginia, as in many places on proposed construction routes, the threat of eminent domain fuels this fight. Landowners say they object to the idea that companies can take private property — seizing permanent pathways, 75 feet wide or more — for corporate gain. They say the one-time payments they’re offered don’t make up for what they’re losing.
These landowners include Becci Harmon, a drug-and-alcohol program officer from Swoope, whose house sits within 50 feet of the Atlantic Coast route; she fears the one-acre plot on which she’s lived for 26 years will turn into a gutter after the pipeline wipes out her trees, garden and septic system. Richard Averitt, an entrepreneur from Nellysford, believes it will jeopardize his plan to develop an “eco-friendly” resort after it cuts the wooded, 100-acre site in half.
“This pipeline in particular is so egregious. It’s 95 percent virgin land,” Averitt said. “It’s land privately owned or in the public trust.”
Atlantic Coast became an issue in Virginia’s recent gubernatorial primary, but Dominion and Duke say supporters outnumber opponents. The companies point to recent polling by an energy industry group that includes Dominion among its members. Its survey shows that 55 percent of residents back the project while 30 percent oppose it. They also cite a letter, signed by 16 state lawmakers from Virginia, North Carolina and West Virginia, urging FERC officials to approve the pipeline. Last month, a New York watchdog group released a report revealing that five of the signatories are top recipients of either Dominion’s or Duke’s political contributions.
Supporters writing op-eds distributed by the companies include landowner Ward Burton. He was impressed that Dominion altered the project’s route to avoid crossing a creek twice and a forest once on the 565 acres in Blackstone, Virginia, owned by his wildlife foundation.
Unions are eager to see the pipeline move ahead. “We’re going to put people to work,” said Matthew Yonka, president of the Virginia State Building & Construction Trades Council.
Still, there can be localized problems. The Rover pipeline, which runs from Pennsylvania to Michigan, racked up more than $900,000 in proposed penalties from Ohio regulators after FERC approved it in February. Officials say its owner, Energy Transfer Partners, kept spilling drilling fluid into wetlands, ponds and streams — including, in one case, several million gallons of a clay mixture tinged with petroleum.
Energy Transfer’s Alexis Daniel said the company considers land restoration “a top priority” and is working to resolve the matter. Craig W. Butler, who heads the Ohio Environmental Protection Agency, said the company claimed the state has no authority to penalize it. He’s grateful FERC intervened: It’s halted certain drilling work on the pipeline while investigating the damage.
Some states, less impressed with FERC’s process, have pushed back. New York regulators denied necessary water permits for two pipelines, the Constitution last year and Northern Access in April. Both projects are on hold as the developers wait for a federal appeals court to decide whether the denials can stand. In its most recent permit rejection, the New York State Department of Environmental Conservation said “FERC disregarded the Department’s concerns.” Based on its experiences with gas pipeline construction, the state agency predicted “significant degradation of water quality in stream after stream.”
U.S. Rep. Bonnie Watson Coleman, a Democrat from New Jersey, wants to see reforms earlier in the process — when FERC is still deliberating. Pressed by residents upset about PennEast, she sponsored legislation in May that would require evidentiary hearings in contested cases and regular, big-picture reviews of need.
Absent a state veto or major changes at FERC, there’s little a landowner can do to stop the construction juggernaut, as Jeb Bell learned. He and his brother didn’t want the Sabal Trail pipeline burrowing beneath their tree farm in Mitchell County, Georgia, so the company took them to court twice — first to get permission to survey the land and then to build on it. Sabal Trail, largely owned by Enbridge, won each time. It also fought off the Bells’ counterclaim contending the company had trespassed on their land.
Then the company won the right to collect legal fees from the Bells — $47,258 in all.
Enbridge spokeswoman Andrea Grover said by email that Sabal Trail is entitled to the money because it had offered to settle the “baseless” trespass claim; the brothers turned it down.
Bell, a state-park manager, has no idea how he’ll pay if his appeal fails. He can’t imagine a multibillion-dollar company needing his money. What it wanted, he’s sure, was to send a warning to other landowners: Don’t even try to stop pipelines. They always win.
Marie Cusick of StateImpact Pennsylvania contributed to this story.
Federal health officials made more than $16 billion in improper payments to private Medicare Advantage health plans last year and need to crack down on billing errors by the insurers, a top congressional auditor testified Wednesday.
James Cosgrove, who directs health care reviews for the Government Accountability Office, told the House Ways and Means oversight subcommittee that the Medicare Advantage improper payment rate was 10 percent in 2016, which comes to $16.2 billion.
Adding in the overpayments for standard Medicare programs, the tally for last year approaches $60 billion — which is almost twice as much as the National Institutes of Health spends on medical research each year.
“Fundamental changes are necessary” to improve how the federal Centers for Medicare and Medicaid Services ferrets out billing mistakes and recoups overpayments from health insurers, he said.
Medicare serves about 56 million people, both those 65 and older and disabled people of any age. About 19 million have chosen to enroll in Medicare Advantage plans as an alternative to standard Medicare.
Federal officials predict the Medicare Advantage option will grow further as massive numbers of baby boomers retire in coming years.
Standard Medicare has a similar problem making accurate payments to doctors, hospitals and other health care providers, according to statistics presented at the hearing. Standard Medicare’s payment error rate was cited at 11 percent, or $41 billion for 2016.
Last week, Attorney General Jeff Sessions announced the arrest of 412 people, some 100 doctors among them, in a scattershot of health care fraud schemes that allegedly ripped off the government for about $1.3 billion, mostly from Medicare.
CMS official Jonathan Morse said that the “largest contributors” to billing mistakes in standard Medicare were claims from home health care and inpatient rehabilitation facilities.
Some lawmakers appeared frustrated that CMS cannot say for sure how much of the “improper payments” in both Medicare options are caused by fraud. The agency uses the term broadly to cover billing fraud, waste and abuse, as well as simply overcharges and underpayments.
“When trying to understand how much fraud is in Medicare, the answer is simply we don’t know,” subcommittee Chairman Vern Buchanan (R-Fla.) said.
Yet he added that “it doesn’t take a big percentage [of fraud] to get a giant number” of dollars.
CMS official Morse did little to clear up any confusion over billing mistakes. In his written testimony, he said that improper payments are “most often payments for which there is no or insufficient supporting documentation to determine whether the service … was medically necessary.”
In his testimony, GAO official Cosgrove focused on the Medicare Advantage program. He took aim at a little-known government audit process called Risk Adjustment Data Validation, or RADV. These audits require health plans to submit a sample of patient records for review.
Cosgrove said that the RADV audits take too long to complete and failed to focus on health plans with the greatest potential for recovery of overcharges. He also said that CMS officials had not done enough to make sure the payment data they use are accurate. As a result, “the soundness of billions of dollars in Medicare expenditures remains unsubstantiated,” according to written testimony.
The GAO, the watchdog arm of Congress, has previously criticized CMS for its failure to ferret out overcharges in Medicare Advantage. In an April report, GAO found that CMS has spent about $117 million on the Medicare Advantage audits since 2010 but recouped just under $14 million in total.
Payment errors and overcharges by Medicare Advantage plans were the subject of a lengthy investigation by Kaiser Health News and the Center for Public Integrity. Federal officials have struggled for years to weed out billing irregularities by Medicare Advantage plans, according to CMS records obtained through a Freedom of Information Act lawsuitfiled by the Center for Public Integrity.
The investigation found that Medicare Advantage payment errors result mostly from flaws in a billing formula called a risk score. Congress expected risk scores would pay higher amounts for sicker patients and less for people in good health when it began phasing in the billing scales in 2004.
But since then, a wide range of CMS audits and other reviews have found that Medicare wastes billions of tax dollars annually because some health plans inflate risk scores by exaggerating how sick their patients are. One CMS memo made public through the FOIA lawsuit referred to risk-based payments as essentially an “honor system,” with few audits to curtail fraud and abuse.
Even when RADV audits have detected widespread overpayments, CMS officials have failed to recoup money after years of haggling with the health plans.
In January, Kaiser Health News reported that Medicare had potentially overpaid five Medicare Advantage health plans by $128 million in 2007, but under pressure from the insurance industry collected just $3.4 million and settled the cases.
Morse testified on Wednesday that CMS is still in the process of completing appeals of RADV audits from 2007. He said that payment errors have been calculated for 2011 and that reviews for 2012 and 2013 were underway.
These results are years behind schedule, according to CMS documents, which show the results were expected in early 2014. In the past, officials have said that they expected to collect as much as $370 million from the 2011 audits.
Morse said on Wednesday he didn’t know when the 2011 audit results would be released. “Hopefully soon,” he said after the hearing. “I actually don’t know.”
This story was produced by Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.
In an arrangement prominent ethics experts say is without precedent and potentially illegal, the White House is referring questions for senior presidential adviser Stephen K. Bannon to an outside public relations agent whose firm says she is working for free.
Alexandra Preate, a 46-year-old New Yorker and veteran Republican media strategist, describes herself as Bannon's "personal spokesperson." But she also collaborates with other White House officials on public messaging and responses to press inquiries. It was Preate who responded when the Center for Public Integrity recently asked the White House Press Office questions about Bannon.
Preate, however, is not employed by President Donald Trump’s administration or paid by the federal government.
The unorthodox setup means Bannon, Trump's chief strategist, is potentially violating the Antideficiency Act, which provides that federal employees "may not accept voluntary services for [the] government or employ personal services exceeding that authorized by law."
The revelations about Preate's work are the latest controversy to embroil the White House Communications Office, which is reeling from a series of high-profile resignations, firings and leadership changes in recent days.
To be sure, it's not uncommon for executive branch employees to hire personal lawyers who aren’t on the government's payroll, but who nonetheless advise their clients on government work-related matters. The difference is that personal lawyers don't step in to help the White House perform its official duties.
Preate, however, “appears to be organizing the administration's response to questions sent to the White House," said Kathleen Clark, a law professor at Washington University in St. Louis and an expert in government ethics. "And the fact that other officials are responsive to her distinguishes this situation from the kind of activity a private lawyer would do."
Said Norm Eisen, ethics czar during the Obama administration: "She seems to be privy to government information, and she appears to be acting on behalf of a government entity, either Bannon or the White House Press Office. If she's doing it for free, then that is a potential violation of the Anti-Deficiency Act."
To date, no one has ever been convicted or indicted for violating the Anti-Deficiency Act, and most of the dozen or so violations reported each year result in little more than administrative penalties. Still, a "knowing and willful violation" of the Anti-Deficiency Act is a Class E felony, punishable by a "$5,000 fine, confinement for up to two years, or both."
As a private citizen, Preate is not subject to the restrictions imposed by the Anti-Deficiency Act, nor would she be liable for any potential violations. White House officials, on the other hand, are subject to the act.
Preate, the White House Press Office, Bannon aides, the White House Counsel’s Office and the Department of Justice all refused to answer repeated questions from the Center for Public Integrity about Preate’s arrangement with the White House, whether she is working for free, and whether her role has been approved by government lawyers or ethics officials.
Eighteen phone calls
The Center for Public Integrity first became aware of Preate's role earlier this month after sending an email to White House Deputy Press Secretary Lindsay Walters with questions about Bannon’s personal financial disclosure.
Minutes later, Walters replied to say the White House Press Office was "working to get you a response." Walters copied Julia Hahn, a White House deputy policy strategist and former Breitbart reporter who works closely with Bannon.
Instead of receiving a response from Walters or Hahn, the Center for Public Integrity received a phone call from Preate, who said that she was calling "for Steve." Preate later arranged a call for the Center for Public Integrity with a member of the White House Counsel's Office, who addressed questions about Bannon's financial disclosures.
From July 11 through July 13, Preate called the Center for Public Integrity 18 times about the story. During these conversations, Preate would only agree to speak off the record, which is why the Center is not reporting on the content of the calls.
“We would never have tolerated this in the Bush White House," Tony Fratto, a former principal deputy press secretary for President George W. Bush, said of the Trump White House’s arrangement with Preate.
In addition to the ethics issues, Fratto said in an interview with the Center for Public Integrity, Preate’s role would have caused problems within the White House Press Office itself.
"From an operational perspective, a situation like this would be difficult to manage, because it's an uncoordinated messaging channel that isn't being overseen by the White House communications office," Fratto said.
"If a comms director doesn't have control over who is doing the messaging, then you get contradictory information and disjointed messaging, and that's a problem,” he added.
Indeed, the struggles of the Trump White House to coordinate an effective communications strategy have been monumental. In just the past week, the White House Press Office has been upended by the sudden resignation of White House press secretary Sean Spicer, the surprise appointment of New York financier Anthony Scaramucci as White House communications director and the messy dismissal of senior assistant press secretary Michael Short.
In his first briefing as communications director on Friday, Scaramucci promised a new era of discipline in the White House press office. He also pledged to get the entire communications staff "super-coordinated around here with the president" and his message.
If that's Scaramucci's plan, then Bannon, who reportedly objected to Scaramucci’s hiring, may be in for a fight.
Who's paying the bills?
There are good reasons why the government is required to officially hire, and pay, the people who work for it.
Bannon “took an oath to support and defend the Constitution,” Clark said.
But Preate has not taken such an oath. This means “the public has no idea who, if anyone, is paying this piper,” she added.
Preate is the founder and CEO of a New York-based public relations firm, Capital HQ, whose marquee client is the conservative news and opinion website Breitbart News.
Bannon ran the conservative news site until he joined Trump’s campaign last year. He states on his government financial disclosures that he officially resigned from Breitbart in August, but Breitbart CEO Larry Solov said Bannon didn't resign until after Trump won the election in November.
"If Preate's firm works for Breitbart, then is this arrangement part of a continuing relationship of some kind between Breitbart and Bannon?" Eisen said. "Is Breitbart paying for this?”
In addition to Breitbart, Preate has reportedly represented prominent Republican political donor Rebekah Mercer, whose billionaire family is a part-owner of Breitbart. She has also been quoted in news stories as "a friend" of Mercer.
Bannon has a longstanding personal and professional relationship with the Mercer family, who reportedly convinced Trump to put Bannon in charge of his campaign last summer.
As of March 31, Bannon had not yet sold his stakes in at least two companies he co-owns with members of the Mercer family: The movie production company Glittering Steel LLC, and the influential GOP big data firm, Cambridge Analytica.
Neither the White House nor Preate would confirm whether Bannon has sold his stakes in the two Mercer-linked companies since March.
The Mercers were also among Trump’s most influential bankrollers. During the 2016 election cycle, the Mercers spent $22 million to support Republican candidates, and they funded a super PAC, Make America Number 1, that backed Trump’s general election bid.
Zero-to-60 on the Trump train
Preate may not be a household name, but she has deep roots in Republican politics.
Her father, Ernie Preate, was twice elected Attorney General of Pennsylvania as a Republican. In 1994 he ran for governor, losing the nomination to then-Rep. Tom Ridge, who would go on to win in the general election.
But Ernie Preate's promising career in politics ended abruptly the following year, when he pleaded guilty to mail fraud in a federal case involving illegal campaign contributions. He served 11 months in prison, and has since become an advocate for prison reform.
It's not clear exactly when Bannon and Alexandra Preate's professional relationship began.
In March of 2016, Breitbart spokesman Kurt Bardella abruptly resigned. Almost immediately, publicists at Preate’s firm, Capital HQ, were quoted as representatives of Bannon and Breitbart.
By July of 2016, then-Capital HQ associate Garrett Marquis was busy promotingClinton Cash, a movie based on a book by Peter Schweizer, who runs a Mercer-funded group called the Government Accountability Institute. The film version of Schweizer's book was released on Breitbart.com, and it was co-produced by Bannon and Rebekah Mercer through their joint production company, Glittering Steel LLC.
In August, Preate first appeared in a news story as a spokeswoman for Bannon. This was a few days before Trump officially named Bannon CEO of his presidential campaign. When Politico reported that Bannon had been once been charged in a domestic violence incident, Preate issued a statement in Bannon's defense.
Later on, if news organizations described Bannon as a Trump campaign staffer, it was Preate — not a Trump campaign representative — who would push back, reminding reporters that Bannon was offering his services to Trump for free. "He is a volunteer — as CEO," she wrote to a reporter for The Daily Beast in October.
Throughout the final months of the campaign, Preate appeared in media reports identified only as a "Bannon spokeswoman." But behind the scenes, Preate's team at Capital HQ worked hard to promote Bannon.
Since Bannon joined the Trump administration, at least one news outlet, New York magazine, has reported that Preate joined the White House with him.
But Preate does not work for the White House, said Chad Wilkinson, the current president of Preate-owned Capital HQ who also serves as Breitbart’s spokesman. Nor has Preate filed any of the government-mandated disclosures required for federal employees.
Preate moved to Washington in January “to work for Bannon after Trump took office,” Wilkinson said in an interview with the Center for Public Integrity. Preate’s Twitter page lists her as living “in DC.”
Wilkinson and other Capital HQ associates began speaking on behalf of Breitbart in Preate’s absence.
Preate "has never received a dime" from Bannon in exchange for her work on his behalf, Wilkinson said.
But as Capital HQ’s founder and chief executive officer, Preate continues to profit from the Breitbart representation, Wilkinson said.
Friends with money
For Virginia Canter, an attorney for Citizens for Responsibility and Ethics in Washington and a former government ethics lawyer, Bannon's situation raises the question of whether Preate's clients are effectively supplementing Bannon's salary.
"The question is whether there is some kind of arrangement among Bannon, Breitbart and Preate that enables Preate to provide public relations services to Bannon and the White House, without compensation from either Bannon or the White House," she said in an interview with the Center for Public Integrity.
Bannon and Preate refused multiple requests from the Center for Public Integrity to answer this specific question.
Canter served as associate counsel to the president during the Obama administration, associate director of the Office of Foreign Assets Control at the Treasury Department during the George W. Bush administration and associate counsel to the president during Bill Clinton’s administration.
According to Eisen, Clark, Canter and others, Bannon's acceptance of Preate's services could also violate 18 U.S. Code section 209, a law commonly known as the salary supplementation ban. This law "prohibits employees from being paid by someone other than the United States for doing their official Government duties," according to the Office of Government Ethics.
"If this gift of valuable public relations consulting services is being provided to Bannon by Preate or by others, then that is compensation that could be viewed as supplemental compensation on top of his salary as a member of the executive branch," Eisen said. "And that is not permitted."
This is not the first time that questions have arisen over whether Bannon is maintaining ties to Breitbart that violate executive branch ethics rules.
The contact appeared to violate the Ethics Pledge Bannon had signed as a condition of his employment in the Trump White House. The pledge expressly prohibits newly hired officials, like Bannon, from having contact with their previous employers.
In late March, Citizens for Responsibility and Ethics in Washington sent a letter to White House Counsel Don McGahn, requesting an investigation into whether Bannon had violated the Ethics Pledge.
Rather than reprimand Bannon, the White House in May released what it said was a retroactive, blanket ethics waiver. Such a waiver allowed executive branch employees who had previously worked for media organizations — such as Bannon at Breitbart— to ignore longstanding federal rules that prohibit government employees from communicating with their former employers.
Unlike every ethics waiver that had ever been granted before it, however, this one did not have a signature on it. Nor did it have a date to show when it went into effect.
Friends with benefits
Even if Preate's services were to be viewed as simply a gift, and not salary supplementation, they could still violate executive branch ethics rules that bar government employees from accepting gifts from outside sources, said Brendan Fischer, who leads the federal ethics and election law reform project at the nonprofit Campaign Legal Center.
"There's a more general executive branch prohibition on accepting gifts that seems to apply here," Fischer said in an interview.
This prohibition also contains a number of important exceptions, said Tom Fitton, president of Judicial Watch, a conservative nonprofit group that promotes transparency and accountability in government.
"The rules allow for the pro bono provision of services when they're from friends," he said in an interview, an exception that he said could prove relevant to Bannon and Preate. It states that a government employee may accept "a gift motivated solely by a family relationship or personal friendship."
Still, Fitton acknowledged that the unresolved questions of who is paying for Preate's services, or whether anyone is, muddying issues around personal gifts.
Also complicating matters: Preate's position as the founder and CEO of Capital HQ, said Walter Shaub, who served as director of the Office of Government Ethics during the first six months of the Trump administration. He now leads the ethics practice at the Campaign Legal Center, a nonpartisan political watchdog organization.
Additionally, Shaub said, "If there's a history of Bannon having paid for her professional services, this further undermines the argument that this is a gift motivated solely by Preate's personal friendship with Bannon."
"At a minimum," he said, "this blurs the lines between Preate's firm and her gift of pro bono public relations services."
Still, the prospect that Preate could be gifting her services to Bannon does little to resolve the question of why she is responding to questions sent by reporters to the White House Press Office.
Under President George W. Bush, the issue of how the White House handled ethics questions from reporters was never in question, said Fratto, the former Bush press official.
Fratto recalled the hiring of Ed Gillespie, a Bush adviser who’s now running for Virginia governor. Gillespie had founded a public relations and lobbying firm, Quinn Gillespie & Associates, before joining the Bush administration.
"He had a whole PR firm behind him, but I was the one who handled questions about his personal finances,” Fratto said. “I don't think it ever occurred to anyone to have Quinn Gillespie handle it. Those were ethics questions for the White House.”
In the absence of any explanation from the White House about Preate's role, both Eisen and Clark say they hope other federal agencies and Congress will investigate the situation.
"The Justice Department should look at this,” Eisen said, “and I hope they'll get some answers to these questions."
The financial industry’s hefty investment in the campaigns of House members appeared to pay off this week when that chamber voted to kill a new rule that allows consumers to file class-action lawsuits against banks and other institutions.
The Republican-led House passed a resolution on Tuesday to block a Consumer Financial Protection Bureau (CFPB) rule that was published earlier this month; that rule prohibits financial service companies from inserting agreements in contracts that prevent customers from filing class-action lawsuits against a company.
Those agreements, which have become popular in recent years, instead require consumers to settle complaints through arbitration, a less public and often less costly process favored by financial institutions.
Blocking the rule has been a priority of the financial industry since it was first suggested in the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in response to the 2008 financial meltdown. But killing the rule will also require the Senate to act as the House did.
To fight the CFPB, the financial industry has spent millions cultivating relationships with lawmakers such as Rep. Keith Rothfus, R-Pa., who sponsored the resolution to undo the CFPB arbitration rule.
Since Rothfus was first elected to Congress in 2009, he has received more than $971,000 from financial institutions — $389,990 from securities and investment firms; $316,767 from insurance firms, which sell financial products; and $264,714 from commercial banks, according to the nonpartisan Center for Responsive Politics (CRP). On average, House members receive $163,702 from the financial sector, CRP reported.
Rothfus also enjoys the support of the Club for Growth, the self-described “leading free-enterprise advocacy group in the nation.” The group has given Rothfus $183,428 during his political tenure — more than double the amount from his next highest donor, Federated Investors Inc.
Club for Growth supports a number of financialderegulationinitiatives and scores politicians based on their positions on key votes. Rothfus scored an 81 percent last year, ranking him 84th out of the 435 House members.
Six of the resolution’s 33 other co-sponsors are part of what the Center for Public Integrity labeled the “banking caucus,” a group of influential representatives with strong ties to the financial industry. The group includes House Financial Services Chairman Jeb Hensarling, R-Texas; Rep. Blaine Luetkemeyer, R-Mo., and Rep. Ed Royce, R-Calif.
Hensarling’s leadership role has translated into hefty campaign contributions. He has received $4.22 million from the financial industry over the course of his 14-year career in the House. Leutkemeyer and Royce have received $1.69 million and $3.48 million from the industry, respectively, according to CRP data.
To kill the CFPB rule, the House relied on the rarely-used Congressional Review Act (CRA), which allows Congress to undo recently finalized regulations by a simple majority vote. The CRA had only been used once prior to the Trump administration, in 2001 during the Bush administration. The current Congress has used the act to repeal 14 Obama-era regulations.
The CFPB defended the rule after the House vote.
“Our arbitration rule was the result of more than five years of careful research and open deliberation,” CFPB spokesman David Mayorga said in an emailed statement. “We found that blocking group lawsuits makes it nearly impossible for most consumers to get justice and relief for wrongdoing.”
The CFPB rule “makes sure bad actors that harm thousands or millions of consumers can be held accountable,” said Lauren Saunders, associate director at the National Consumer Law Center.
To see the value of the CFPB’s rule, look no further than the Wells Fargo fraudulent account scandal, consumer advocates and lawyers said. Wells Fargo employees, looking to meet internal sales goals, opened at least 2 million fraudulent accounts without customers’ permission.
When the abuse was disclosed, Wells Fargo initially tried to block class-action lawsuits by pointing to the arbitration clause in the contract customers signed with the bank. Facing pressure from Congress and other lawsuits, Wells Fargo agreed to settle a class-action lawsuit for $142 million.
“We know what happens with a class action: Wells Fargo agrees to give $140 million. We also know what would happen in arbitration: Consumers who only have small claims wouldn’t get anything,” said Jeff Sovern, a law professor at St. John’s University.
Saunders said the effort to kill CFPB’s arbitration rule is part of a larger battle to weaken the agency.
“The attack on this rule is part of the continuing reflexive attacks on the CFPB regardless of the merits,” Saunders said. “The CFPB is being attacked for going ‘rogue’ when the agency was doing exactly what Congress gave it authority to do in 2010.”
But the business community sharply disagrees. The prospect of undoing the CFPB’s rule has gained support from trade groups such as the American Bankers Association, the American Financial Services Association and the U.S. Chamber of Commerce. All three signed a letter to members of Congress, along with eight other trade groups representing financial services companies, expressing their “strong disapproval” of the rule, which they claim is based on incomplete research and would expose financial service providers to additional class action litigation.
The Chamber of Commerce also put out a notice to representatives that it would consider their position on repealing the rule a “Key Vote” to be used in the Chamber’s annual scorecard, an important barometer for politicians hoping to prove their business-friendly bona fides.
The Trump administration said the CFPB rule “would benefit trial lawyers by increasing frivolous class-action lawsuits; harm consumers by denying them the full benefits and efficiencies of arbitration; and hurt financial institutions by increasing litigation expenses and compliance costs.”
The CFPB rule’s fate now stands with the Senate, where Banking Committee Chairman Sen. Mike Crapo, R-Idaho, has filed a similar resolution. Crapo ranks among the financial industry’s favorite senators, having received more than $3 million from the financial industry since he arrived in Congress in 1991, according to CRP data. His top donor is JPMorgan Chase & Co.
The Senate has until late September to act and finding the votes to kill the rule may prove more difficult there than in the House. Republicans may be wary of bringing the resolution to a vote for fear of being viewed as siding with unpopular banks, Senate staffers said.
Every Republican senator on the banking committee but one — Sen. John Kennedy of Louisiana — is listed as a cosponsor of the resolution.
Another cosponsor is Sen. Shelley Moore Capito, R-W.V., who was a member of the House until 2014 and made the Center for Public Integrity’s initial list of “banking caucus” members. Other cosponsors include Sens. Marco Rubio, R-Fla. and Pat Toomey, R-Pa., who have received more than $12 million and $8 million, respectively, from the financial sector during their political careers, according to CRP data.
United Healthcare Services Inc., which runs the nation’s largest private Medicare Advantage insurance plan, concealed hundreds of complaints of enrollment fraud and other misconduct from federal officials as part of a scheme to collect bonus payments it didn’t deserve, a newly unsealed whistleblower lawsuit alleges.
The suit, filed by United Healthcare sales agents in Wisconsin, accuses the giant insurer of keeping a “dual set of books” to hide serious complaints about its services and of being “intentionally ineffective” at investigating misconduct by its sales staff. A federal judge unsealed the lawsuit, first filed in October 2016, on Tuesday.
The company knew of accusations that at least one sales agent forged signatures on enrollment forms and had been the subject of dozens of other misconduct complaints, according to the suit. In another case, a sales agent allegedly engaged in a “brazen kickback scheme” in which she promised iPads to people who agreed to sign up and stay with the health plan for six months, according to the suit.
Though it fired the female sales agent, United Healthcare concluded the kickback allegations against her were “inconclusive” and did not report the incident to the Centers for Medicare & Medicaid Services, according to the suit.
Asked for comment on the allegations in the suit, United Healthcare spokesman Matt Burns said: “We reject them.”
Medicare serves about 56 million people, both people with disabilities and those 65 and older. About 19 million have chosen to enroll in Medicare Advantage plans as an alternative to standard Medicare. United Healthcare is the nation’s biggest operator, covering about 3.6 million patients last year.
The whistleblowers accuse United Healthcare of hiding misconduct complaints from federal officials to avoid jeopardizing its high rankings on government quality scales. These rankings are used both as a marketing tool to entice members and as a way for the government to pay bonuses to high-quality plans.
Medicare paid United Healthcare $1.4 billion in bonuses in fiscal 2016 based upon their high quality ratings, compared with $564 million in 2015, according to the suit. CMS relies on the health plans to report problems and does not verify the accuracy of these reports before issuing any bonus payments.
The suit alleges the bonuses were “fraudulently obtained” because the company concealed the true extent of complaints. In March 2016, for instance, the company advised CMS only of 257 serious complaints, or about a third of the 771 actually logged, according to the suit.
The suit was filed by James Mlaker, of Milwaukee, a sales agent with the insurance plan in Wisconsin, and David Jurczyk, a resident of Waterford, Wis., a sales manager with the company.
The suit says Jurczyk had access to “dual” complaint databases, described as “the accurate one with a complete list of complaints and more details of the offenses and the fraudulent, truncated one provided to CMS.”
Jurczyk “has direct, personal knowledge of dozens of cases in Wisconsin alone in which customer complaints raising serious issues were routinely determined and falsely documented as either “inconclusive” or “unsubstantiated” by the company, according to the suit. Overall, about 84 percent of complaints alleging major infractions, such as forging signatures on enrollment forms, were determined to be inconclusive or unsubstantiated, according to the suit.
According to Mlaker, one sales agent faced little disciplinary action even after allegedly forging a customer’s signature on an enrollment form. The customer was “shocked” to learn that the agent had enrolled him because he had told the agent he was “not interested and did not want to enroll,” according to the complaint.
As a result, according to the suit, CMS officials never learned of these customer complaints.
The two men said that in early 2013 they began noticing that investigations of serious customer complaints that previously would have been completed “swiftly” instead “were drawn out; little actual inquiry was made, or even worse, known facts were ignored and discounted to falsify findings,” according to the suit.
Complaints also brought “much fewer and less serious corrective or disciplinary actions,” according to the suit. According to the suit, United Healthcare took steps to encourage any members with complaints to report them directly to the company rather than to complain to CMS.
The unsealing of the Wisconsin cases comes as United Healthcare and other Medicare Advantage plans are facing numerous cases brought under the Federal False Claims Act. At least a half-dozen of the whistleblower suits have surfaced since 2014.
The law allows private citizens to bring actions to recover damages on behalf of the federal government and retain a share. The Justice Department elected not to take over the Wisconsin case, which could limit the amount of money, if any, recovered. United Healthcare spokesman Burns said the company agreed with that decision.
In May, the Justice Department accused United Healthcare of overcharging the federal government by more than $1 billion by improperly jacking up risk scores over the course of a decade.
When Chicago resident Carlo Licata joined Facebook in 2009, he did what the 390 million other users of the world’s largest social network had already done: He posted photos of himself and friends, tagging the images with names.
But what Licata, now 34, didn’t know was that every time he was tagged, Facebook stored his digitized face in its growing database.
Angered this was done without his knowledge, Licata sued Facebook in 2015 as part of a class action lawsuit filed in Illinois state court accusing the company of violating a one-of-a-kind Illinois law that prohibits collection of biometric data without permission. The suit is ongoing.
Facebook denied the charges, arguing the law doesn’t apply to them. But behind the scenes, the social network giant is working feverishly to prevent other states from enacting a law like the one in Illinois.
Since the suit was filed, Facebook has stepped up its state lobbying, according to records and interviews with lawmakers. But rather than wading into policy fights itself, Facebook has turned to lower-profile trade groups such as the Internet Association, based in Washington, D.C., and the Illinois-based trade association CompTIA to head off bills that would give users more control over how their likenesses are used or whom they can be sold to.
That effort is part of a wider agenda. Tech companies, whose business model is based on collecting data about its users and using it to sell ads, frequently oppose consumer privacy legislation. But privacy advocates say Facebook is uniquely aggressive in opposing all forms of regulation on its technology.
And the strategy has been working. Bills that would have created new consumer data protections for facial recognition were proposed in at least five states this year — Washington, Montana, New Hampshire, Connecticut and Alaska — but all failed, except the Washington bill, which passed only after its scope was limited.
No federal law regulates how companies use biometric privacy or facial recognition, and no lawmaker has ever introduced a bill to do so. That prompted the Government Accountability Office to conclude in 2015 that the “privacy issues that have been raised by facial recognition technology serve as yet another example of the need to adapt federal privacy law to reflect new technologies.” Congress did, however, roll back privacy protections in March by allowing Internet providers to sell browser data without the consumer’s permission.
Facebook says on its website it won’t ever sell users’ data, but the company is poised to cash in on facial recognition in other ways. The market for facial recognition is forecast to grow to $9.6 billion by 2022, according to analysts at Allied Market Research, as companies look for ways to authenticate and recognize repeat customers in stores, or offer specific ads based on a customer’s gender or age.
Facebook is working on advanced recognition technology that would put names to faces even if they are obscured and identify people by their clothing and posture. Facebook has filed patents for technology allowing Facebook to tailor ads based on users’ facial expressions.
But despite the relative lack of regulation, the technology appears to be worrying politicians on both sides of the aisle, and privacy advocates too. During a hearing of the House Government Oversight Committee in March, Chairman Jason Chaffetz, R-Utah, who left Congress in June, warned facial recognition “can be used in a way that chills free speech and free association by targeting people attending certain political meetings, protests, churches or other types of places in public.”
Even one of the inventors of facial recognition is worried. “It pains me to see a technology that I helped invent being used in a way that is not what I had in mind in respect to privacy,” said Joseph Atick, who helped develop facial recognition in the 1990s at Rockefeller University in New York City.
Atick, now an industry consultant, is concerned that companies such as Facebook will use the technology to identify individuals in public spaces without their knowledge or permission.
“I can no longer count on being an anonymous person,” he said, “when I’m walking down the street.”
Atick calls for federal regulations to protect people’s privacy, because without it Americans are left with “a myriad of state laws,” he said. “And state laws can be more easily manipulated by commercial interests.”
Facial recognition is here
Facial recognition’s use is increasing. Retailers employ it to identify shoplifters, and bankers want to use it to secure bank accounts at ATMs. The Internet of things — connecting thousands of everyday personal objects from light bulbs to cars — may use an individual’s face to allow access to household devices. Churches already use facial recognition to track attendance at services.
Government is relying on it as well. President Donald Trump staffed the U.S. Homeland Security Department transition team with at least four executives tied to facial recognition firms. Law enforcement agencies run facial recognition programs using mug shots and driver’s license photos to identify suspects. About half of adult Americans are included in a facial recognition database maintained by law enforcement, estimates the Center on Privacy & Technology at Georgetown University Law School.
To tap into this booming business, companies need something only Facebook has — a massive database of faces.
Facebook now has 2 billion monthly users who upload about 350 million photos every day — a “practically infinite” amount of data that Facebook can use to train its facial recognition software, according to a 2014 presentation by an engineer working on DeepFace, Facebook’s in-house facial-recognition project.
“When we invented face recognition, there was no database,” Atick said. Facebook has “a system that could recognize the entire population of the Earth.”
Facebook says it doesn’t have any plans to directly sell its database. “We do not sell people’s facial recognition template or make them available for use by developers or advertisers, and we have no plans to do so,” Facebook spokesman Andy Stone said in an email.
But Facebook currently uses facial recognition to organize photos and to support its research into artificial intelligence, which Facebook hopes will lead to new platforms to place more focused targeted ads, according to public announcements made by the company. The more Facebook can recognize what is in users’ photographs using artificial intelligence, the more they can learn about users’ hobbies, preferences and interests — valuable information for companies looking to pinpoint sales efforts.
For example, if Facebook identifies a user’s face and her friends hiking in a photo, it can use that information to place ads for hiking equipment on her Facebook page, said Larry Ponemon, founder of the Ponemon Institute, a privacy and security research and consulting group.
“The whole Facebook model is a commercial model,” Ponemon said, “gathering information about people and then basically selling them products” based on that information.
Facebook hasn’t been consistent about what it plans to do with its facial data. In 2012, at a hearing of the Senate Judiciary Subcommittee on Privacy, Technology and the Law, then-Chairman Al Franken, D-Minn., asked Facebook’s then-manager of privacy and public policy, Rob Sherman, to assure users the company wouldn’t share its faceprint database with third parties. Sherman declined.
“It’s difficult to know in the future what Facebook will look like five or 10 years down the road, and so it’s hard to respond to that hypothetical,” Sherman said.
And in 2013, Facebook Chief Privacy Officer Erin Egan told Reuters, “Can I say that we will never use facial recognition technology for any other purposes [other than suggesting who to tag in photos]? Absolutely not.” Egan added, though, that if Facebook did use the technology for other purposes the firm would give users control over it.
Nearly a decade ago, when facial recognition was still in its infancy, Illinois passed the Biometric Information and Privacy Act of 2008 after a fingerprint-scanning company went bankrupt, putting the security of the biometric data the company collected in doubt.
“The Illinois law is a very stringent law,” said Chad Marlow, policy counsel at the American Civil Liberties Union. “But it’s not inherently an unreasonable law. Illinois wanted to protect its citizens from facial recognition technologies online.”
That may include, possibly, Facebook’s Tag Suggestions application. First introduced in 2010, Tag Suggestions allows Facebook users to label friends and family members in photos with their name using facial recognition. When a user tags a friend in a photo or selects a profile picture, Tag Suggestions creates a personal data profile that it uses to identify that person in other photos on Facebook or in newly uploaded images.
Facebook started quietly enrolling users in Tag Suggestions in 2010 without informing them or obtaining their permission. By June 2011, Facebook announced it had enrolled all users, except for a few countries.
That’s what upset Licata, who works in finance in Chicago. In the lawsuit against Facebook, which names two other plaintiffs, Licata alleges that every time he was tagged in an image or selected a new profile picture, Facebook “extracted from those photographs a unique faceprint or ‘template’ for him containing his biometric identifiers, including his facial geometry, and identified who he was,” according to the lawsuit. “Facebook subsequently stored Licata’s biometric identifiers in its databases.”
The other plaintiffs also claim that by using their data to build DeepFace, Facebook deprived them of the monetary value of their biometric data. The statute carries penalties up to $5,000 per violation, which potentially could include thousands of Illinois residents.
Licata declined an interview request through the law firm representing him, Chicago-based Edelson PC, which specializes in suing technology companies over privacy violations. The firm’s founder, Jay Edelson, is a controversial figure. Some technologists and colleagues view him as an opportunist — a “leech tarted up as a freedom fighter” — according to a New York Timesprofile.
Facebook declined the Center for Public Integrity’s requests to comment on the lawsuit specifically, but said in an email that “our work demonstrates our commitment to protecting the over 210 million Americans who use our service.” Facebook told The New York Times in 2015 that the BIPA lawsuit “is without merit, and we will defend ourselves vigorously.”
Facebook says users can turn off Tag Suggestions, but critics say the process is complex, making it likely the feature will remain active.
And many Facebook users don’t even know data about their likenesses are being stored. “As a person who has been tagged, there should be some agreement at least that this is acceptable” before Facebook enrolls users in Tag Suggestions, said privacy researcher Ponemon. “But the train has left the station.”
In 2016, just 21 days after the judge in the Licata case ruled against a Facebook motion that the Illinois law only applies to in-person scans, not images or video, an amendment to BIPA that would have defined facial scans just that way was offered in the state Senate. After consumer groups such as the World Privacy Forum and the Illinois Public Interest Research Group wrote letters of opposition, the measure was withdrawn by its sponsor, state Sen. and Assistant Majority Leader Terry Link, D-Vernon Hills. Link did not respond to requests for comment.
Facebook has expressed support for the amendment, but won’t confirm or deny their involvement in the attempt. The effort fits a pattern, said Alvaro Bedoya, executive director of the Center on Privacy & Technology at Georgetown University.
“Their approach has been, ‘If you sue us, it doesn’t apply to us; if you say it does apply to us, we’ll try to change the law,’” Bedoya said. “It is only laws like Illinois’ that could put some kind of check on this authority, so it is no coincidence that [Facebook] would like to see this law undone. This is the strongest privacy law in the nation. If it goes away, that’s a big deal.”
Facebook’s hidden lobbying
Facebook started lobbying the federal government in earnest around 2011, when it reported spending nearly $1.4 million. By 2016, the amount grew more than five times, to almost $8.7 million, when Facebook lobbied on issues such as data security, consumer privacy and tax reform, according to the Center for Responsive Politics.
Facebook spends much less to influence state lawmakers. According to reports compiled by the National Institute on Money in State Politics, it spent $670,895 on lobbying in states in 2016, a 64 percent jump from $373,388 in 2014. Facebook has an active presence in a handful of states — primarily California and New York — but it only hired its first lobbyist in Illinois for this year’s session.
Facebook prefers to work through trade associations to influence policy. Sources in the Illinois Legislature told the Center for Public Integrity that the BIPA amendment attempt, which would have redefined facial recognition, was led by CompTIA, a trade group that bills itself as “the world’s leading tech association.” CompTIA declined to comment in detail, but confirmed that Facebook is among its members.
Facebook declined to comment about whether it was behind the amendment. When Edelson lawyers asked for information about Facebook’s lobbying related to BIPA, Facebook’s lawyers successfully requested the court to seal those records, keeping the information private.
On its website, Facebook says it is a member of 56 groups and 108 third-party organizations that it works with “on issues relating to technology and Internet policy.” CompTIA, despite acknowledging Facebook is a member, isn’t on the list.
At the Facebook annual shareholders meeting in Redwood City, California, last month, more than 90 percent of the shares voted were opposed to a proposal that would have required the company to provide more information about its political associations, including grass-roots lobbying.
CompTIA, which absorbed the Washington, D.C.-based tech advocacy group TechAmerica in 2015, employs one permanent lobbyist in Illinois and contracts with the Roosevelt Group, one of Illinois’ “super lobbyists,” which last year represented lobbying powerhouses AT&T Illinois, payday lender PLS Financial Services and the influential Illinois Retail Gaming & Operators Association.
In August 2016 CompTIA published a blog post about the practical applications of biometrics, and labeled BIPA “problematic” because terms such as “consent” and “facial recognitions” are vaguely defined and it “invites an avalanche of litigation.”
CompTIA made political contributions to just two non-candidate groups in 2016 — in the two states with the strictest privacy laws, Illinois and Texas, according to the National Institute of Money in State Politics. CompTIA gave $21,225 last year to the Illinois Democratic Party.
CompTIA also gave $5,000 to the Republican Party in Texas, where Republican Attorney General Ken Paxton is charged with enforcing the state’s biometric privacy regulations, according to the institute. Texas enacted one of the stricter biometric privacy laws in the nation. Signed in 2009, the law requires companies to obtain an individual’s permission to capture a biometric identifier such as a facial image. But unlike Illinois’ law, it doesn’t allow state residents to sue and leaves the enforcement authority solely with the attorney general.
The Texas attorney general’s office declined to comment on whether it has pursued lawsuits on biometric privacy violations. There’s no indication that Paxton’s office has ever completed an investigation, according to a review of records.
‘They will descend on you’
Alaska, Connecticut, Montana, New Hampshire and Washington proposed biometric privacy laws this past legislative session, but all failed except for a weakened version that survived in Washington. Two other states — Arizona and Missouri— proposed narrower bills that provide privacy protections just for students, but both fizzled out in committee. Illinois tabled a proposed amendment to BIPA that would have strengthened the law by barring companies from making submission of biometric data a requirement of doing business.
Facebook, along with Google Inc., Verizon Communications Inc. and trade groups like CompTIA, had a hand in blocking or weakening the biometric privacy bills in Montana, Washington and Illinois, according to a Center for Public Integrity review.
What happened in Montana is typical. Katherine Sullivan, a small business owner and intellectual privacy lawyer turned privacy advocate, helped write a biometric privacy bill that Democrat Rep. Nate McConnell introduced this year in the Montana Legislature.
“Everyone I talked to as a citizen thought it was a good idea,” Sullivan said.
Still, Sullivan said she was warned that lobbyists representing powerful companies would come out against the law. “‘They will descend on you,’” Sullivan said she was told.
The Montana bill was introduced Feb. 17 and assigned to the House Judiciary Committee. Only one hearing on the bill was held, on Feb. 23. Lobbyists from Verizon, the Internet Coalition, which represents Internet and ecommerce companies including Facebook, and the Montana Retail Association showed up in opposition to the bill.
At the hearing, Jessie Luther, a lobbyist from Verizon, read a letter signed by CompTIA; the Internet Coalition; TechNet, a network of chief executives from technology companies; and the State Privacy and Security Coalition, a group of major internet communications, retail and media companies. All three count Facebook as a member.
The letter, addressed to state Rep. Alan Doane, chairman of the Judiciary Committee, warned that the proposed legislation “would put Montana residents and businesses at much greater risk of fraud, as well as open the door to wasteful class action lawsuits against Montana businesses that receive biometric data.” It also warned that the bill would prevent using biometrics for “beneficial purposes” such as accessing and securing personal accounts.
Doane said in an interview he doesn’t remember the letter, but agreed with many of its points. On Feb. 27, the bill was tabled in committee.
The ‘NRA approach’
Tough privacy legislation that would have prohibited the collection of biometric information without prior consent and allow individuals to sue companies that violate the law also fizzled out in New Hampshire and Alaska. A weaker bill in Connecticut would have prohibited brick-and-mortar stores from using facial recognition for marketing purposes died in committee.
Washington’s law requires companies to obtain permission from customers before enrolling their biometric data into a database for commercial use and prohibits companies from selling, leasing or otherwise handing the data over to a third party without consent. But it does not allow individuals to sue companies directly.
More important, some privacy advocates say, the law exempts biometric data pulled from photographs, video or audio recordings, similar to the amendment CompTIA had lobbied for in Illinois as a way to weaken BIPA, which would exempt Facebook’s Tag Suggestions.
Earlier versions of the law won the approval of big tech companies such as Google and Microsoft Corp., and the privacy advocacy group the Electronic Frontier Foundation. But in 2016, EFF pulled its support when the bill was amended to omit “facial geometry,” which Adam Schwartz, a senior staff attorney at EFF, said would cover facial recognition.
Schwartz said the final statute is weaker than BIPA because the law’s language is written in such a way that it may allow companies to capture facial recognition data without informed notice or consent.
The statute “appears to have been tailored to protect companies that are using facial recognition,” Shwartz said.
Democratic state Rep. Jeff Morris, one of the bill’s sponsors, disagrees. Morris said the law covers any data that can be used to identify a person by unique physical characteristics, including applications that use “precise measurements between the bridge of your nose and your eyes.”
But Morris said while most of the big tech companies such as Microsoft, Amazon and Google supported the bill in its final form, Facebook remained opposed.
Facebook’s hired lobbyist in Washington — Alex Hur, a former aide to state Speaker of the House Frank Chopp — was “lobbying quite ferociously on the bill,” Morris said. Facebook objected to the bill, he said, because it included as protected data “behavioral biometrics,” which refers to data on how a person moves, including an individual’s gait as recorded in videos.
Hur did not respond to requests for comment.
One of the trade groups working on Facebook’s behalf in Washington was the Washington Technology Industry Association. At a hearing on the legislation in February, Jim Justin, a WTIA representative, argued tagging services like Facebook’s should be exempt from the law.
“Given facial recognition, that data should be protected,” Justin said, “but if you are tagging someone on Facebook and simply using their name, we don’t think that falls under what should be protected, given that that person provided consent.”
A CompTIA lobbyist also spoke at the February hearing, asking lawmakers to take a “limited approach” to biometric privacy.
Morris said CompTIA adopts what he calls the “NRA approach” to lobbying. “They basically say, ‘You’ll take our innovation out of our cold, dead hands,’” he said.
“This is a pretty common public-affairs tactic,” Morris added, “an association that does the dirty work so your company isn’t tarnished.”
‘Didn’t know they existed until …’
State legislatures are beginning to recognize that many personally identifying technologies may require additional regulatory attention — and technology companies such as Facebook and their trade groups are gearing up to fight them.
Lawmakers in Illinois formed a committee this year to discuss technology issues such as data privacy. The CyberSecurity, Data Analytics and IT committee in the Illinois House of Representatives held its first hearing in March.
The formation of the committee brought national attention to Springfield.
“It has brought in groups from D.C.,” like the Internet Association, said Rep. Jaime Andrade Jr., D-Chicago, the committee’s chairman.
CompTIA also has been “very active,” he said.
“I didn’t know they existed until the committee” formed, Andrade added. “As soon as the committee was created they came in and introduced themselves.”
With their gazes already trained toward 2018 midterm elections — and even the 2020 presidential race — conservative super PACs are this year pummeling their liberal counterparts in fundraising, according to a Center for Public Integrity analysis of new Federal Election Commission filings.
Several super PACs supporting President Donald Trump’s 2020 re-election bid combined to raise significant cash during the first half of 2017.
“The members of the Committee to Defend the President are passionately committed to supporting the passage of the president’s America First Agenda and the call for his re-election,” said Ted Harvey, a former Colorado state senator who’s chairman of the pro-Trump group.
Harvey added that the super PAC provides Trump a shield against an “unprecedented onslaught of liberal intolerance and hate.”
But with the 2020 election more than 39 months away, what’s the hurry?
“The entire Democrat political machine is solely focused on blocking the President’s agenda and defeating him and other conservatives in the next two election cycles,” said Ed Rollins, lead strategist at Great America PAC. “Given this reality, it’s essential for us at Great America PAC to work twice as hard to help ensure the president’s short-term success and create a more favorable environment for his re-election campaign.”
By early May, these super PACs had together spent more than $1 million to support Trump’s 2020 re-election bid. They’ve since spent hundreds of thousands of dollars more. By law, super PACs may raise and spend unlimited amounts of money to advocate for or against political candidates.
Another pro-Trump super PAC active in 2017 is Rebuilding America Now, which reported income of $1.15 million during the first half of 2017 — almost all coming in the form of “media.” The PAC has largely spent its cash on food, travel, legal fees, and $35,000 a month to one of the group’s leaders, Laurance Gay, for “political strategy consulting.”
Meanwhile, Ronald Weiser, founder of architecture firm McKinley Associates, gave $200,000 in seed money to pro-Trump PAC America First Action, which formed in April. As for June 30, it had yet to spend any of it directly advocating for Trump.
Make America Number 1, the pro-Trump PAC largely backed by billionaire megadonor Robert Mercer during Election 2016, has raised less than $740 since Jan. 1, although it still had $873,000 in the bank as of June 30. The group blew through $134,000, or nearly 65 percent of its spending, on legal fees to law firm Greenberg Traurig.
Future45, another pro-Trump super PAC largely funded last year by casino magnate Sheldon Adelson and Linda McMahon, who Trump appointed to head the Small Business Administration, secured $105,000 from only two sources so far in 2017.
Nearly all the money this year, $102,500, came from super PAC Liberty 2.0, which was bankrolled by Murray Energy, Hobby Lobby and oil company Continental Resources during the 2016 election cycle. Environmental Protection Agency Administrator Scott Pruitt’s leadership PAC handed over $2,000.
Lower profile for Democratic super PACs
On the Democratic side, American Bridge 21st Century, a super PAC that largely supported Democratic presidential nominee Hillary Clinton and was founded by liberal political operative David Brock, raised $4.1 million during the first half of 2017. Its work this year has focused on anti-Trump and anti-Republican messaging, research and strategy.
Leading contributors include megadonor Barbara Stiefel ($200,000), billionaire philanthropist Pat Stryker ($150,000) and billionaire businessman George Soros ($80,000). (The Center for Public Integrity receives funding from the Open Society Foundations, which Soros funds. A complete list of Center for Public Integrity funders is found here.)
Clinton’s main supportive super PAC, Priorities USA Action, brought in $1.7 million during the first half of 2017. But the bulk of the money was refunds from Election 2016 vendors. The group only brought in about $27,000 in bona fide contributions as its profile has shrunk. It’s primarily focused on polling, health care policy and voter suppression issues during 2017.
Trump himself kickstarted the 2020 presidential race when he filed re-election paperwork with the FEC on Jan. 20, the day of his inauguration.
In mid-July, Trump’s 2020 re-election committee reported raising nearly $8 million from April 1 to June 30 — an unprecedented amount so early in a presidential election cycle. Trump’s campaign entered July with almost $12 million in reserve.
Presidential candidates usually don’t begin actively raising campaign money until the year before an election.
Congress ‘up for grabs’?
Among U.S. Senate-focused super PACs, top Republican groups raised more than double the dollars of top Democratic groups.
At $8.2 million during the year’s first half, the GOP-aligned Senate Leadership Fund outpaced liberal Senate Majority PAC, which brought in $4.6 million. Another pro-Republican super PAC, Senate Conservatives Action, raised $1.1 million of its own, half of which came from Richard Uihlein, founder of shipping supplies company Uline.
Conservative donors such as Home Depot cofounder Bernard Marcus ($2 million) and hedge fund manager Steven Cohen ($1 million) are the biggest Senate Leadership Fund donors so far in 2017. The Democratic Senate Majority PAC pulled $1 million each from Deborah Simon and Cynthia Simon-Skjodt, daughters of Melvin Simon, founder of the shopping mall company Simon Property Group.
Republicans cling to a 52-48 Senate majority over Democrats and the two independents who caucus with them. The Senate is expected to be the primary battleground in 2018, although Democrats also hope to make gains in the House.
Among U.S. House-focused super PACs, the Paul Ryan-backed Congressional Leadership Fund raised $13.1 million through July 10, while liberal House Majority PAC raised $3.2 million through the same period. The Republicans brought in checks from Western Refining Chairman Paul Foster ($1 million), billionaire Charles Johnson ($300,000) and investment banker Warren Stephens ($250,000). The Democrats won support from real estate mogul Charles Johnson ($500,000), hedge fund manager Donald Sussman ($250,000) and billionaire Tom Steyer’s super PAC, NextGen Climate Action ($200,000).
Some of this fundraising fueled special election spending, most notably the historically expensive House contest in Georgia’s 6th congressional district, where Republican Karen Handel in June scored a comeback runoff victory over Democrat Jon Ossoff.
But Republican super PACs are also girding for a potentially grinding 2018 midterm election, in which Democrats hope to carve into the GOP’s 241-194 House majority.
The early fundraising activity “reflects the fact that both parties consider the control of Congress up for grabs in the upcoming election,” said Craig Holman, government affairs lobbyist at reform group Public Citizen. “We’re just going to have a big fight coming up in 2018, and no one knows how it’s going to play out yet.”
Another big player in congressional elections, the politically active nonprofit One Nation, raised $8.7 million and has $7 million on hand, according to Politico. The group linked to political analyst Karl Rove is not required to disclose its donors.
A major liberal dark money group tied to Senate Majority PAC, Majority Forward, did not respond to a request for fundraising information.
Biden for president?
A handful of lesser-known super PAC players also secured large checks from some familiar names.
Dean Buntrock, founder of Waste Management, donated $250,000 to the Koch-affiliated Freedom Partners Action Fund, which generally supports Republican congressional candidates.
Massachusetts First, a super PAC that’s attacking Democratic Sen. Elizabeth Warren, found a friend in Renaissance Technologies’ Mercer, who donated $150,000.
Meanwhile, former Vice President Joe Biden coaxed top Democratic megadonors such as LGBT activist Tim Gill, former Walt Disney Co. Chairman Jeffrey Katzenberg and former Sen. Chris Dodd (D-Conn.) to give $5,000 each to his new PAC, American Possibilities. Biden’s committee raised almost $280,000 in the two months since he announced his project. More than one-third of American Possibilities’ donations came from contributions of $200 or less.
“It’s as if he’s already testing the waters to see if he can run for president,” Holman said.
The National Democratic Redistricting Committee, a group led by former Attorney General Eric Holder and backed by Barack Obama, raised $10.8 million through the end of July, according to the group. Obama personally conducted a fundraiser last month for the initiative, which seeks to “undo GOP gerrymandering.”
While its three arms — a PAC, a 501(c)(3) charitable nonprofit and 501(c)(4) “social welfare” nonprofit — brought in donations from more than 10,000 donors, big names writing six-figure checks stood out: Newsweb’s Fred Eychaner and Sussman gave $500,000 each, while director J.J. Abrams and his wife, actress Katie McGrath, gave $125,000 each.
Uihlein, the Republican megadonor, also shelled out $2 million to Solutions for Wisconsin, filling the super PAC’s entire coffers the first six months of 2017. The group endorsed U.S. Marine Kevin Nicholson to challenge Sen. Tammy Baldwin, D-Wisc., in 2018.
A version of this article appears on NBC News.
This article first appeared at ICIJ.org.
The Supreme Court of Pakistan has voted unanimously to disqualify Nawaz Sharif from the prime ministership and has referred his case to the country's top anti-corruption authority for an investigation into his family's offshore assets, as revealed in the Panama Papers.
Sharif's removal comes one year before he was due to end his third term as Pakistan's leader, and means his party, the Pakistan Muslim League-Nawaz, will need to appoint an interim prime minister to serve until the next election in mid-2018.
"He is no more eligible to be an honest member of the parliament," Judge Ejaz Afzal Khan said in court, according to a report by Reuters.
The case now goes to Pakistan’s National Accountability Bureau for an investigation into the family’s alleged corruption. According to the BBC, the Supreme Court also recommended anti-corruption cases against Sharif’s daughter Mariam and her husband Safdar, Finance Minister Ishaq Dar and others. The News reports that Safdar and Dar have also been disqualified from their offices.
The outcome marked a perhaps predictable end to a process that had consisted of one negative finding after another for the prime minister and his family after the Panama Papers reported on April 3, 2016 that his family owned expensive properties in London through offshore companies.
Little more than a month later, Sharif, facing calls for his resignation, abruptly left Pakistan and checked himself into a London hospital. Through his lawyer, Sharif told the Pakistan Supreme Court that he did not own any shell companies or property through offshore holdings himself without addressing whether his children did. The embattled prime minister subsequently returned to Pakistan after undergoing heart bypass surgery.
The Panama Papers reported that three of Sharif's children were owners or had the right to authorize transactions for several companies, including two that owned “a UK property each for use by the family” of the companies’ owners. Sharif’s daughter Mariam, widely seen as her father’s political heir, was the owner of the two British Virgin Islands-based firms.
Later in 2016, the Supreme Court, petitioned by political opponents of Sharif, appointed a five-member bench to start hearings in the case that resulted in an order for an investigation into the allegations while Sharif was allowed to continue in office. Though Sharif has continued to deny any wrongdoing, the report was damning, accusing the family of building wealth beyond its means and accusing Mariam of submitting fake documents and misleading the Supreme Court.
A supposedly exculpatory document that Mariam released during the investigation signed and dated Feb. 2, 2006 had been printed in the Calibri typeface, which was not commonly available until 2007.
There was heightened security on the streets of Islamabad and the courtoom was packed for the verdict on Friday, according to the BBC. The New York Times reports that there are several possible contenders to replace Sharif: Sardar Ayaz Sadiq, the speaker of the national assembly; Shahid Khaqan Abbasi, the minister of petroleum; Khurram Dastgir Khan, the commerce minister; and Khawaja Muhammad Asif, the defense minister. Opposition leader Imran Khan also stands to gain politically from the court’s decision, and political insiders suggested that the verdict could lead to a period of political instability for the country.
Sharif is the second world leader to lose his post over his links to the Panama Papers; Sigmundur David Gunnlaugsson was forced to resign as the prime minister of Iceland shortly after his wife's interest in an offshore company was revealed as part of the Panama Papers investigation in April, 2016.
The House Ethics Committee has decided not to reprimand Rep. Roger Williams, R-Texas, in regard to questions raised over whether his automobile dealership would benefit financially from an amendment he introduced in 2015.
The committee’s leaders said in a report issued Tuesday, however, that Williams should have consulted with the panel first to avoid the appearance of impropriety.
A 2015 Center for Public Integrity story brought to light a provision proffered by Williams that allowed car dealers to rent or loan out vehicles even if they are subject to safety recalls. Williams owns the Roger Williams Auto Mall in Weatherford, Texas. The amendment did not become law.
The House ethics manual states that “whenever a Member is considering taking any such action on a matter that may affect his or her personal financial interests,” he or she should contact the House Ethics Committee for guidance.
Williams did not consult with the committee first.
In a statement, Williams said he knew he would be cleared of wrongdoing.
“I have extensive knowledge and experience in running a small business and I chose to apply some common sense to legislation that was overreaching with regulations," Williams said. "This bill would have resulted in unintended consequences that would punish small business owners, employees and consumers."
In deciding not to take action against Williams, the committee said that “the totality of the circumstances” surrounding his actions “did not create a reasonable inference of improper conduct.”
But the committee also noted that Williams might have avoided problems had he consulted with the panel first.
“In this case, while the Committee would have advised Representative Williams that he was not prohibited from introducing the Williams Amendment, it might have made Representative Williams aware of several potential issues, including the possibility that members of the public, the press, and others could raise questions about Representative Williams’ actions,” the report said. “In fact, that’s precisely what happened.”
Days after the Center published its story, Williams issued a statement that said the Center had made a “laughable ‘charge’” against him.
The Office of Congressional Ethics, an independent nonpartisan board, disagreed.
After an extensive review, the group voted 6-0 in April 2016 to recommend further investigation by the House Ethics Committee.
Williams did not cooperate with the OCE review, according to the agency’s report.
“The Board finds that there is substantial reason to believe that Representative Williams’ personal financial interest in his auto dealership may be perceived as having influenced his performance of official duties,” according to the OCE report, which was forwarded to the House ethics committee.
The House committee reviewed more than 1,000 pages of documents and interviewed six witnesses, including Williams, the report said.
The House ethics committee’s decision on Tuesday drew the ire of Meredith McGehee, chief of policy, programs and strategy for the nonprofit Issue One, a government accountability group.
“What purpose does the House Ethics Committee serve if it doesn’t ensure compliance with its own standards of conduct?” McGehee said in a statement. “Today’s report proves they are an ‘ethics’ committee in name only, and further highlights the importance of the Office of Congressional Ethics.”
McGehee said Williams clearly violated the instructions in the House ethics manual.
“Now, we learn Rep. Williams did not even receive a slap on the wrist,” she said. “The original point of the investigation was whether Williams cleared his official action with the House Ethics Committee — and by the committee’s own admission in its report, he did not, a violation of House standards of conduct.”
At least three of President Donald Trump’s political appointees are drawing taxpayer-funded paychecks while owing the Internal Revenue Service tens of thousands of dollars, a Center for Public Integrity review of federal financial disclosures reveals.
Trump’s appointment of federal debtors to his administration perpetuates a pattern that’s dogged presidential administrations — including that of President Barack Obama — for decades.
Trump himself has yet to address the issue in any meaningful way. Meanwhile, a bill aimed in part at disqualifying serious tax scofflaws from federal employment has languished since Rep. Jason Chaffetz, R-Utah, introduced it in January. (Chaffetz resigned in June.)
“The Trump administration is proving to be no different than any of the others,” said Marcus Owens, a partner at law firm Loeb & Loeb and former director of the IRS’ exempt organizations division. “For senior executives, particularly, there should be some requirement that they should stay current on their taxes.”
White House spokeswoman Natalie Strom declined to answer questions about the White House’s policies on employing people who owe the IRS money or whether Trump himself would like his appointees to retire their IRS debts.
The Trump administration officials’ IRS debts were spotted by reporters and volunteers for #CitizenSleuth, a project launched last month by the Center for Public Integrity and Reveal from the Center for Investigative Reporting. The crowd-sourced investigation is examining detailed financial disclosures from more than 400 top Trump administration officials and nominees, including nearly 190 who reported owing someone money— from student loans to mortgages to credit card debt.
A financial disclosure filed by Clark, the White House director of intergovernmental affairs and a deputy assistant to the president, does not indicate he’s actively paying off his debts through an IRS-approved payment plan. In his role, Clark serves as the White House’s liaison to state, local and tribal governments.
U.S. Department of Agriculture Special Assistant Joe Alexander and White House Liaison for the Corporation for National and Community Service Deborah Cox-Roush, who each also reported owing up to $50,000 in federal taxes, indicate they are on payment plans, according to their financial disclosures.
Reached by phone, Cox-Roush explained that she didn’t withhold enough money from her income earlier this decade, and therefore, got behind on her taxes. She expects to clear her debts in full by September. The White House expressed no concerns to Cox-Roush about her tax situation, she added.
“It’s not been an issue, and I’ve done what the law has allowed me to do,” said Cox-Roush, who according to her LinkedIn resume also serves as director of the Senior Corps. Until June, she worked as a special assistant to U.S. Department of Education Secretary Betsy DeVos.
Clark earns a taxpayer-funded annual salary of $165,000, according to White House records. Alexander, whom ProPublica identified as a “GS-15” employee on the federal pay scale, would earn somewhere from $103,672 and $134,776, based on that designation.
Cox-Roush was a GS-15 employee during her stint at the Department of Education, although it’s unclear how much she earns at her new job. Clark and Alexander, as well as representatives of the Department of Agriculture, did not return requests for comment.
IRS spokesman Bruce Friedland declined to comment on the matter, citing federal privacy laws. In general, the IRS advises that “those who receive a bill from the IRS should not ignore it.”
Strom, the White House spokeswoman, emphasized that federal officials owing the IRS money is "hardly a new practice," adding: "I’m just wondering why it’s such a big deal that these three people voluntarily disclosed that they owe the IRS money, especially when two of them are even already on a payment plan with the IRS as your records show."
Indeed, the issue of key federal government officials owing the IRS money isn’t new and dogged the Obama administration, as well.
Take the case of Timothy Geithner, who once paid back taxes before becoming Obama’s treasury secretary — a position in which Geithner oversaw the IRS.
Early in Obama’s administration, 41 aides working in the Executive Office of the President together owed the tax man more than $831,000, according to a Washington Postanalysis of IRS data.
By late 2014, 45 of the 1,823 people employed by the Obama administration’s Executive Office of the President had delinquent income tax payments together worth about $460,000, according to a periodic report issued by the IRS’ Federal Employee/Retiree Delinquency Initiative.
Unlike the personal financial disclosures revealing the three Trump officials’ five-figure IRS debts, these earlier Obama-era reports do not name names or reveal debt details.
There is also no comparable IRS debt data yet available for the federal workforce in 2017, making it impossible to know whether current White House officials and federal employees in general owe the IRS less money — or more — under Trump’s administration.
Moreover, Trump has only been in office since Jan. 20 and has not fully populated his administration with key personnel. Hundreds of political positions Trump is responsible for filling are either vacant because he hasn’t appointed people to fill them or because the Senate has not confirmed people he’s nominated.
Many key Trump administration personnel also have yet to file public personal financial disclosures that are supposed to list personal debts, so it’s impossible to know whether anyone else owes the IRS money.
Government watchdogs say situations in which key federal officials owe back taxes undercuts Americans’ faith in their government.
“Public leaders should be responsible in their own affairs, and owing such a debt could lead to instances of corruption,” said Scott H. Amey, general counsel for the Project on Government Oversight, a nonpartisan nonprofit.
“We should hold people we appoint to political positions to a high standard,” said Ryan Alexander, president Taxpayers for Common Sense, another nonpartisan nonprofit. “Clarifying what the standards even are would be helpful.”
As for the IRS, Trump is angling to shrink it: His 2018 budget proposal calls for staffing cuts to the bureau. Trump also wants to cut the IRS’ overall budget to $9.65 billion, down from $12.1 billion six years ago and about $11.2 billion last fiscal year. (Congress has indicated it probably won’t cut IRS funding as deeply as Trump would like.)
Trump himself reported no IRS debt on a personal financial disclosure form he filed in June.
He is, however, no stranger to debt, writ large: His latest personal financial disclosures indicate he has at least $315 million of it, largely stemming from business ventures and owed to a variety of foreign and domestic creditors.
Trump, citing an ongoing audit by the IRS, has categoricallyrefused to release his personal tax returns, bucking a practice followed by every major presidential candidate since the 1960s. The IRS itself has stated that “nothing prevents individuals from sharing their own tax information.”
Such documents would reveal Trump’s tax rate, overall tax payments and charitable giving, among other financial information not contained within standard personal financial disclosure documents.
A senior member of the Senate’s government oversight committee is demanding that the National Nuclear Security Administration explain and account for safety lapses at nuclear weapons facilities that were recently disclosed in an investigation by the Center for Public Integrity.
In a letter sent on Aug. 3, Sen. Claire McCaskill of Missouri, the top-ranked Democrat on the Senate Homeland Security and Governmental Affairs Committee, asked NNSA administrator Frank Klotz to clarify the impact of the weapons production safety errors detailed by the Center, explain the costs incurred as a result of those errors and detail what steps the agency is taking to strengthen its safety enforcement.
McCaskill’s letter also asked Klotz to grade his agency’s own performance, and questioned whether the agency feels it is “meeting its duty to prevent dangerous nuclear accidents.” In a statement with the letter, she said “there’s clearly a safety problem at NNSA, which puts our nation’s nuclear security program at risk. It’s time for NNSA to address safety issues and hold contractors accountable.”
McCaskill, who is also a senior member of the Senate Armed Services Committee, has previously been critical of poor contract oversight and weak whistleblower protections by the Department of Energy, which includes the semi-autonomous NNSA.
Her four-page letter recounted various safety incidents revealed by the Center, including a 2011 episode in which workers at Los Alamos National Laboratories in New Mexico placed plutonium rods dangerously close to one another to take a photograph of them, risking an uncontrolled nuclear chain reaction that would have killed those present.
The facility where the incident occurred is the nation’s only lab capable of fabricating new cores for nuclear weapons and testing old ones to ensure they work, and after the accident that facility was closed for nearly four years while Los Alamos struggled to meet relevant safety standards.
McCaskill asked Klotz to explain the status of the facility and the costs associated with its closure. She also asked how much of the $13.9 billion that President Trump has proposed spending at NNSA during the next fiscal year would be dedicated to improving safety, and whether NNSA plans to sanction the private contractors that operate the nation’s nuclear weapons facilities for their safety lapses, beyond the relatively slight penalties it has imposed so far.
NNSA spokesman Greg Wolf did not immediately reply to a request for comment. He has previously said “NNSA has uncompromising standards for our laboratories, plants, and sites to perform work in a safe and secure manner that protects our employees, our facilities and the public.”