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  • 04/26/12--11:51: Donor profile: Peter Thiel
  • Ranking: 5

    Total contributions to super PACs: $2.7 million*

    Notable federal hard money and 527 contributions:

    • $5,000 to Marijuana Policy Project Medical Marijuana PAC (MPP Medical Marijuana PAC) (2004)
    • $5,000 to Managed Funds Association PAC (2008)

    Notable state-level contributions (see here):

    • $25,900 to California gubernatorial candidate Meg Whitman (2010)
    • $21,200 to former California Gov. Arnold Schwarzenegger (2003)
    • $70,000 to California ballot measure Yes on 19 — Tax Cannabis 2010 (2010)

    Corporate name: Clarium Capital; co-founder, PayPal (sold)

    Corporate subsidiaries: None

    Total spent on federal lobbying (2007-2011): $0

    Lobbying issues: N/A

    Family: None

    Biography:

    Peter Thiel is a gay, Christian, a technology mogul, an investor, a lawyer and a libertarian. He believes in creating underwater colonies and has sunk millions into research of life-extending technologies. And he’s Ron Paul’s biggest supporter — at least monetarily.

    Thiel (pronounced “teal”) has contributed $2.6 million to the pro-Ron Paul super PAC Endorse Liberty, nearly all the group's funds. The large donations have drawn comparisons to Sheldon Adelson and Foster Friess, who gave generously to Newt Gingrich and Rick Santorum. But unlike Gingrich and Santorum, Paul has never met his patron, according to Slate.

    Thiel made his fortune as the founder and CEO of PayPal, taking the company public and selling it to eBay in 2002 for $1.5 billion (Thiel later contributed more than $25,000 to then-CEO Meg Whitman’s 2010 California gubernatorial run). He was an early investor in Facebook, fronting $500,000. He currently owns approximately 2.5 percent of the company, which the Wall Street Journal reports could be valued anywhere from $75 billion to $100 billion after it goes public and starts selling stock. Some of Thiel’s other ventures haven’t been quite as successful. The assets of Clarium Capital Management, the hedge fund he founded, shrunk from their peak of $7 billion in mid-2008 to less than $1 billion in mid-2011 — a loss of approximately 90 percent, Bloomberg reports.

    But Thiel is one to take the long view. At a speech he gave in Washington, D.C., in February, Thiel said of his donations to Paul, “The campaign really is for 2016. I think we're just trying to build a libertarian base for the next cycle.”

    Last updated: April 25, 2012

    *2011-2012 election cycle; source: Federal Election Commission

    Peter Thiel, president of Clarium Capital Alexandra Duszak http://www.iwatchnews.org/authors/alexandra-duszak

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    Contrary to expectations, the much-criticized court decisions that gave us “super PACs” have not led to a tsunami of contributions flowing from the treasuries of Fortune 500 corporations — at least not yet anyway.

    What the Citizens United decision and a lower court ruling have done is make household names out of a bunch of relatively unknown, very wealthy conservatives. Of the top 10 donors to super PACs so far in the 2012 election cycle, seven are individuals — not corporations — and four of those individuals are billionaires.

    The top 10 contributors gave more than a third, or $68 million of the nearly $202 million reported by the outside spending groups this election, according to a Center for Public Integrity analysis of Federal Election Commission records.

    Rounding out the top 10 are two labor unions and a physicians’ medical malpractice insurance group.

    The top donor list is mostly Republican, which is not surprising given the competitive GOP presidential primary season. Even so, Democrats have had less success in raising money for super PACs so far.

    In 2010, the U.S. Supreme Court and a lower court set the stage for the new super PACs.

    Such organizations can accept unlimited contributions from corporations, unions and individuals to spend on advertising supporting or opposing a candidate, but are not permitted to coordinate their spending with campaigns, though many employ former campaign operatives.

    Top donors

    No. 1 on the donor list by far is billionaire casino owner Sheldon Adelson and family, who gave $26.5 million. Nearly all of it was spent in a fruitless effort to elevate former House Speaker Newt Gingrich to the GOP presidential nomination through donations to the pro-Gingrich super PAC “Winning Our Future.” Another $5 million went to a group aimed at electing Republicans to the House.

    Adelson, 78, ranks 8th on the Forbes 400 list of the nation’s richest people with a net worth estimated at $21.5 billion. He is an outspoken supporter of Israel and backed Gingrich’s comment that Palestinians are “an invented people.”

    No. 2 Harold Simmons, an 80-year-old Texan, ranks 33rd on the Forbes list with a net worth estimated at $9.3 billion. He gave $16.7 million, which includes $3 million from Contran Corp., in which he has a 95 percent interest.

    Simmons, and his wife, Annette, have given to six different super PACs this cycle, but the conservative group American Crossroads, co-founded by Karl Rove, former adviser to President George W. Bush, is by far his favorite. Simmons has given the super PAC $12 million in the 2012 election cycle.

    Contran is in a wide range of businesses, including chemical manufacturing, metals and waste management. Simmons has been very public in his dislike of President Barack Obama calling him a “socialist” in an interview with the Wall Street Journal and “the most dangerous American alive … because he would eliminate free enterprise in this country.”

    Third on the list is another Texan, homebuilder Bob Perry. Perry, one of the GOP’s most active and prolific donors over the past decade, is a relative piker compared to Adelson and Simmons. He’s not on the Forbes list. Of his $6.7 million in donations, $3.5 million has gone to the pro-Mitt Romney super PAC Restore Our Future and $2.5 million has gone to American Crossroads.

    The other individual donors in the top 10 are:

    • Peter Thiel (fifth), a libertarian, gave $2.7 million to super PACs supporting GOP presidential candidate Rep. Ron Paul, R-Texas. Thiel co-founded PayPal. Forbes ranks him No. 293, with a $1.5 billion net worth.
    • A. Jerrold Perenchio (sixth), gave $2.6 million, with $2 million going to American Crossroads. He is a longtime GOP donor and former owner of Spanish language network Univision. Forbes ranks him at 171 with a $2.3 billion net worth.
    • William J. Doré, a Louisiana energy executive, and Foster Friess, an investor, tied for ninth at $2.25 million. The two men were responsible for most of the contributions to the pro-Rick Santorum super PAC, the Red, White and Blue Fund.

    The National Education Association, the nation’s largest union, was fourth at $3.6 million. It gave $3 million to its super PAC, the NEA Advocacy Fund, which has yet to spend any money on advertising this year. Ranked eighth is the AFL-CIO, with $2.3 million in donations, virtually all of it going to its Workers’ Voices super PAC.

    Rounding out the top 10 is an unlikely super donor, the Cooperative of American Physicians. The co-op gave all its money — nearly $2.6 million — to a super PAC of the same name. The group consists of California doctors who buy medical malpractice insurance through the organization. The doctors want lower malpractice insurance rates and smaller awards in medical malpractice judgments.

    Courts change the game

    This marks the first presidential election following the landmark Citizens United v. Federal Election Commission case, decided in January 2010. The conservative majority of U.S. Supreme Court justices ruled that spending on independent messages that support or oppose federal candidates by corporations and labor unions does not lead to corruption.

    A few months later, a federal court cited this rationale in SpeechNow.org v. Federal Election Commission. That decision led directly to the creation of super PACs. It said that outside spending groups — like American Crossroads, for example — could accept unlimited contributions from corporations, unions and individuals to be spent on political ads.

    Previously, if a group wanted to expressly advocate for or against a federal candidate, it could only collect $5,000 per person per year.

    If an independent group were to raise $5 million for high-profile TV ad campaign advocating against the president or members of Congress, it would need at least 1,000 donors in a year to give the legal maximum. Now, one wealthy individual can single-handedly give a super PAC the cash it needs — and change the political dynamics of a race overnight.

    Washington, D.C.-based attorney Dan Backer, a proponent of super PACs, suspects that much of the money flowing to these nascent groups will come from “the same folks who’ve always contributed," though he also argues that super PACs will allow more people to get involved and have their voices heard.

    Backer said the money “translates into information that empowers voters."

    No limits

    Bob Edgar, a one-time Democratic congressman from Pennsylvania who now heads the advocacy group Common Cause, is among those who have railed against the prospect of deep-pocketed corporations and individuals spending big sums ahead of the 2012 election.

    “There’s no limit on the amount of money that can enter a political campaign,” he said.

    Edgar admits he is surprised that fewer corporations haven’t flexed their political muscle by giving to super PACs, but he predicts that a few “brand-sensitive” corporations will wade into the super PAC water.

    “Corporations are discovering that they have to be careful,” he said. “They can tarnish their brands if they are seen as meddling in partisan politics.”

    However, there is a way for donors to go unnoticed. Nonprofits organized under section 501(c)(4) of the U.S. tax code can accept unlimited contributions and spend the money on ads, just like super PACs, but they aren’t required to reveal their donors.

    In fact, 62 percent of the $123 million raised by American Crossroads, the super PAC, and Crossroads GPS, the nonprofit, through the end of 2011 came from mystery donors, according to a Center for Public Integrity analysis of tax and campaign finance records.

    So there may indeed be a flood of money from big corporations headed into the 2012 election — we just won’t see it.

    Clockwise from left: Sheldon Adelson, Harold Simmons, Bob Perry, Foster Friess, William Doré and Peter Thiel John Dunbar http://www.iwatchnews.org/authors/john-dunbar Michael Beckel http://www.iwatchnews.org/authors/michael-beckel

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  • 04/26/12--11:51: Key findings:
  • — The overall goal of the Missile Defense Agency is to defend U.S. territory against ballistic missile attack from other countries — be it accidental, unauthorized or deliberate.

    — According to the GAO, this program has been "rushed", first by the second Bush administration in 2004, and again by the Obama administration in 2010 which set a deadline for working missile defense by 2015.

     

     


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  • 04/26/12--11:51: Donor profile: Bob Perry
  • Ranking: 3

    Total contributions to super PACs: $6.7 million*

    Notable federal hard money and 527 contributions:

    • $11.3 million to the Republican Governors Association
    • $160,000 to Citizens Club for Growth (2004-2005)
    • $4.4 million to Swift Boat Veterans for Truth (2004)
    • $1 million to Progress for America Voter Fund (2004)

    Notable state-level contributions (see here):

    • $1.5 million to Texas Republican Gov. Rick Perry (2010)
    • $200,000 to Pennsylvania Republican Gov. Tom Corbett (2010)

    Corporate name: Perry Homes

    Total spent on federal lobbying (2007-2011): $0

    Lobbying issues: N/A

    Family: Wife Doylene and four children

    Biography:

    The notoriously publicity-shy Bob Perry was born in rural Bosque County, Texas, near Waco, in 1932. His father worked for Baylor University in Waco — notably expelling Tom DeLay, later the Republican U.S. House Majority Leader, because of a series of pranks. Perry married his wife, Doylene, in 1961. They have four children. He founded Perry Homes in 1968.

    The Texas homebuilder is an advocate of “tort reform,” a business-led campaign to limit damages awarded in lawsuits. The Dallas Morning News reported in 2003 that his company had been sued about 20 times in Harris County, which includes Houston, since 1985. Perry is a prolific campaign donor at both the state and national levels, the Center for Public Integrity has reported, giving $38 million to national candidates and groups since the beginning of 2000, according to The Texas Tribune’s estimate.

    Perry granted the Houston Chronicle a rare interview in late 2002, telling the paper, “It is my view that government is not owned by anyone, least of all wealthy contributors. The direction of government taken by either Republicans or Democrats invariably reflects public opinion, which always includes the ‘average voters.’”

    Perry spokesman Anthony Holm has described him to Minnesota Public Radio in 2006 as “a lover of humanity and a patriot [who] believes quite passionately that the best thing to do to help the average American is for them to have a job.” 

    Last updated: April 25, 2012

    *2011-2012 election cycle; source: Federal Election Commission

    Bob Perry, owner of Perry Homes Alexandra Duszak http://www.iwatchnews.org/authors/alexandra-duszak

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    Ranking: 7

    Total contributions to super PACs: $2.55 million*

    • $2.55 million to Cooperative of American Physicians IE Committee

    Corporate subsidiaries: Cooperative of American Physicians Insurance Services, Inc.

    Total spent on federal lobbying (2007-2011): $270,000

    Lobbying issues: Limiting medical malpractice lawsuits.

    Background:

    The Cooperative of American Physicians, Inc., has made $2.5 million in contributions during the 2012 election cycle, making it a top donor to super PACs, with all of its money going to the affiliated Cooperative of American Physicians IE Committee. Most of that money came in two direct transfers from the corporation to the super PAC.

    The Cooperative of American Physicians, Inc., is owned and governed by California doctors. Members qualify to buy medical malpractice insurance through the Mutual Protection Trust, which provides coverage to 12,000 doctors, according to the company. CAP, as it is commonly known, supports medical liability reform; that is, they advocated for legislation that makes it more difficult for patients to bring medical malpractice suits.

    CAP has long been politically active, and has both state and federal political action committees.

    Following the Citizens United U.S. Supreme Court decision, the corporation created the well-funded super PAC. The group hasn’t done much though. Of approximately $632,000 the Cooperative of American Physicians IE Committee has spent during the 2011-2012 election cycle, only about $102,000 of that money has been spent aiding a candidate. Last year, the group supported California Democrat Janice Hahn, who won a 2011 special election in California's 36th Congressional District. The rest of the money its spent has gone to legal, consulting and accounting fees, travel reimbursements, polling and dues to other organizations.

    With nearly $2 million of corporate money still in the bank, the CAP super PAC may be worth keeping an eye on.

    Last updated: April 25, 2012

    *2011-2012 election cycle; source: Federal Election Commission

    Alexandra Duszak http://www.iwatchnews.org/authors/alexandra-duszak

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  • 04/27/12--02:29: Key GAO findings:
  • — The current U.S. missile defense effort, under way for a decade at a cost of $80 billion so far, has not conducted flight tests independently certified as representing real-world conditions.

    — The deployment of interceptors was "rushed", first by the second Bush administration in 2004, and is being rushed again by the Obama administration to meet a deadline for working European missile defense by 2018.

    — A key radar for the planned European missile defense will interfere with broadband communications wherever it is deployed, a circumstance likely to provoke trouble in Romania and Poland.

    — Over the GAO's opposition, the Pentagon has decided to proceed with simultaneous development and continued production of new interceptors, costing around $400 million, which failed in tests last year.


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    Timothy Broas, a top fundraiser for President Barack Obama, is now the nominee to be the next U.S. ambassador to the Netherlands.

    Broas, a partner at the D.C. law firm Winston and Strawn, has raised more than $500,000 for Obama’s re-election efforts as a bundler, meaning he has been credited for raising money from friends, family or business associates.

    He is one of only 117 bundlers who have raised at least half-a-million dollars for Obama, the Democratic National Committee and Democratic parties in battleground states. During Obama’s presidential bid four years ago, he also bundled between $200,000 and $500,000 for Obama’s campaign.

    Individuals are capped in how much they can contribute to politicians, but there’s no limit on how many other people they can turn to and ask for money. Those who help candidates collect large sums are often rewarded with perks such as access, appointments or government contracts, as the Center for Public Integrity has previously reported.

    More than two dozen of Obama’s elite fundraisers have been appointed ambassadors, including to the Bahamas, Finland, United Kingdom, Japan and South Africa.

    In addition to bundling money for Obama, Broas has been a generous financial supporter of politicians – almost exclusively Democrats.

    Broas has personally donated more than $230,000 to federal candidates, parties and political committees since 1989, according to the Center for Responsive Politics, and only two Republicans have benefited from his financial largess.

    Broas donated $500 to GOP presidential candidate Bob Dole during his 1996 bid, and he gave $2,000 to President George W. Bush in 2004 – a year he also backed Democratic presidential nominee Sen. John Kerry, D-Mass., and gave $25,000 to the DNC.

    Notably, this isn’t Broas’ first presidential appointment from Obama: In December 2010, Obama nominated Broas to be on the board of trustees of the Woodrow Wilson International Center for Scholars, a Washington, D.C.-based, think tank created by Congress in 1968.

    The D.C. lawyer has also been a frequent guest to the White House.

    According to records released by the Obama administration, Broas has visited the White House 39 times since 2009, including eight visits with the president and five West Wing meetings with Pete Rouse, a top adviser who served a stint as Obama’s chief of staff and is now the president’s counselor.

    Federal law only requires that campaigns specifically detail how much money bundlers who are registered lobbyists raise, and none of Obama’s bundlers are registered lobbyists.

    The Obama campaign voluntarily discloses its bundlers in four tiers: $50,000-100,000; $100,000-200,000; $200,000-500,000 and $500,000-plus. It is impossible to tell exactly how much each bundler raised.

    Presumptive GOP presidential nominee Mitt Romney has not released any information about his bundlers beyond that required by law. Romney’s 22 disclosed lobbyist-bundlers have collectively raised nearly $3 million for his campaign.

    President Barack Obama greets people as he arrives in an overflow before he speaks at the University of Iowa. Michael Beckel http://www.iwatchnews.org/authors/michael-beckel

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    'Romney, In the Tank for Big Oil'

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    'Romney's Big Oil Trail'

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    A former Bank of America executive featured in iWatch News’ investigation of fraud and cover-ups in the mortgage industry has been honored with a national award for truth-telling.

    Eileen Foster, the former top mortgage fraud investigator at Countrywide Financial Corp. and Bank of America, was one of the five people honored with Ridenhour Prizes this week. The awards are named in recognition of Ron Ridenhour, a U.S. Army veteran who exposed the 1968 My Lai massacre in Vietnam.
    Foster took the opportunity during the awards ceremony at the National Press Club in Washington to call for criminal prosecutions of high-level executives who oversaw the fraud and predatory lending that helped spawn the nation’s foreclosure disaster.

    “Here we are, several years after the onset of the financial crisis, caused in large part by reckless lending and risk-taking in major financial institutions and still not one executive has been charged or imprisoned,” Foster said.  

    If federal prosecutors can’t nail down cases for the original frauds in the banking industry, she said, they should prosecute the cover ups that helped hide these crimes — drawing on the "overwhelming evidence of perjury, witness tampering and obstruction of justice” that can be found in court cases and government documents.  

    The U.S. Department of Labor ruled last year that Bank of America had improperly fired Foster for leading internal investigations that “revealed widespread and pervasive wire, mail and bank fraud” at Countrywide. It ordered the bank to reinstate her and pay her some $930,000.

    Foster, who worked first at Countrywide and then at Bank of America after it acquired Countrywide in 2008, claimed that Countrywide executives covered up fraud and worked to silence whistleblowers who tried to report forged documents, faked data and other illegal activity inside what was once the nation’s largest mortgage lender.

    Bank of America is appealing the Labor Department’s decision. The bank claims its decision to fire Foster was “solely based on issues with the employee’s management style and in no way related to the employee’s complaints and the allegations made in the complaint.” It said never retaliates against workers who raise questions about fraud or other problems.

    Eileen Foster was mortgage fraud investigations chief for Countrywide Financial Corp., which eventually became Bank of America.       Michael Hudson http://www.iwatchnews.org/authors/michael-hudson

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  • 04/27/12--16:35: About the story:
  • This story was reported by Maggie Mulvihill, Julia Waterhous and Alex Burris from the New England Center for Investigative Reporting. Read more about the New England Center here.


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    Pro — America is threatened by an increasingly hostile world, with threats coming from many corners of the globe. Reducing our military would lower our guard and make us more vulnerable. If problems broke out in more than one place, we would not be able to deal with them all. Furthermore, cutting defense spending would be seen as a sign of weakness and would embolden our enemies to challenge our interests.

    Con — Even though there is no country in the world that can even come close to matching us militarily, we are spending more than we did at the height of the Cold War. The national defense budget has gone up and up so that it is now more than three times all of our potential enemies combined. This is way out of proportion to the real threats we face and doesn’t buy us more security.


    Editor's note: Between now and May 9th, we will be presenting questions adapted from a national survey by the Program for Public Consultation, a nonprofit group affiliated with the University of Maryland, that was developed jointly with the Center for Public Integrity and the Stimson Center. The survey, which was done with a representative national sample, is meant to gauge public attitudes on whether and how defense spending should be reduced as part of Washington’s effort to trim projected federal deficits totaling $10 trillion over the next decade. The national survey is now being analyzed and findings will be presented on the websites of the three organizations involved and at a joint press conference on May 10th. Visitors to this website are welcome to register their opinions as well; a tally of those results (not to be confused with the findings of the scientific sample of the survey) may be given on the website at a later date. —R. Jeffrey Smith

    Past Daily Defense Questions

    • Day 1: Should the U.S. lead in military spending or share more of the burden?

    Be the first to hear about the survey results by following and subscribing to iWatch News and the Center for Public Integrity

    The Center for Public Integrity is one of the country's oldest and largest nonpartisan, nonprofit investigative news organizations. iWatch News is the Center's online publication dedicated to investigative and accountability reporting. It provides original and exclusive daily stories as well as in-depth investigations and commentary.


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    South of the border, war is raging with guns mostly supplied by merchants in the United States.

    The Government of Mexico has estimated that almost 50,000 people have been killed since 2006, a toll that has made its top officials irate about the persistent flow of weapons south. Some law enforcement officials in the U.S. government share the Mexican’s concern, but their attempts to stanch the flow by obtaining better intelliegence about it have badly singed their fingers.

    The notorious “Fast and Furious” operation by the Bureau of Alcohol, Tobacco and Firearms — one in a string of attempts over a nearly decade-long period to tag and closely monitor the movement of individual arms — blew up when two of the weapons being tracked were used to kill a U.S. border patrol agent in 2010.

    Republicans in Congress seized on the issue, holding multiple hearings last year. Acting ATF Director Kenneth Melson was reassigned. The Phoenix U.S. attorney who oversaw the operation also resigned, and Republicans called for the resignation of Attorney General Eric Holder. And President Obama has been largely hands off on the gun issue, treating it as the political third rail that is best to be ignored, or at least carefully walked around.

    Into this politically-charged environment, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) released a first-of-its-kind report on Thursday that nonetheless attempts to assess the proportional distribution — if not the scope — of the arms flowing to drug cartel operatives.

    It confirmed that a majority of the weapons being used by the Mexican drug cartels to kill police, criminals and civilians alike have come from inside the United States. Precisely, of the 99,691 weapons traced from Mexico between 2007 and 2011, 68,161 were manufactured or imported from the U.S. — over 68 percent. Because the data only reflect arms that are captured by Mexican law enforcement agencies, they depict only a subset of all those that flow south.

    The data also showed the U.S. arms’ contribution is becoming more malignant: Criminals using U.S. weapons have been moving from handguns to rifles with detachable magazines, weapons with far greater destructive ability in conflicts with government forces. The percentage of traced guns that were rifles went from 28.2 percent in 2007 to 43.3 percent in 2011, while the percentages for pistols, revolvers and shotguns declined.

    The flow of U.S. weapons to foreign countries isn't constrained just to Mexico. Over the five years studied in the report, over 99 percent of the weapons seized for tracing in Canada, for example, were of U.S. origin. Of the five countries studied in the Caribbean for 2011 alone, the largest percentage of weapons with a U.S. origin came from The Bahamas (94 percent), followed by the Dominican Republic (81.3 percent), Jamaica (80.8 percent), Barbados (60 percent) and Trinidad and Tobago (43.3 percent); the majority of weapons seized for tracing were handguns.

    But Mexico remains the more volatile situation. After all, there aren't civilians being gunned down in the streets of Vancouver. Some of the most powerful weapons to show up in Mexico were first imported in a stripped-down condition into the United States, and then modified by domestic gun dealers before being transported across the border.

    The data has been seized upon by advocates of stricter gun controls in the United States. In a press release, Sen. Diane Feinstein (D-CA) said the new data "makes it very clear that we need to increase our efforts to starve the supply of American weapons that arm Mexico's brutal drug trafficking organizations." ATF was required to release the gun recovery data due to a provision authored by Feinstein as part of last year's Commerce, Justice and Science Appropriations bill.

    The reports form the most comprehensive long-term data available for guns that have been traced through ATF's National Tracing Center. A report done in 2009 by the Government Accountability Office found that 87 percent of firearms seized by Mexican authorities and traced over the previous five years were from the United States — a higher figure that suggests U.S. law enforcement efforts to root out trafficking may now be having a modest impact.

    The National Rifle Association’s Institute for Legislative Action, a group funded partly by gun manufacturers, did not have an immediate comment.


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    I learned that Mitt Romney had won the Nebraska Republican presidential primary last week via a “Breaking News” e-mail alert from POLITICO.  It wasn’t the news from the Cornhusker state, however, that caught my eye. It was instead the health insurance industry’s decision to spend our premium dollars on an Internet ad — an ad warning of dire consequences if the Supreme Court doesn’t rule the way insurers want on the constitutionality of Obamacare.

    The worst-case scenario for insurers is if the high court strikes down the provision of the law requiring us to buy coverage (the so-called individual mandate), but allows the law’s important consumer protections to go forward.

    The reason Obamacare is built around the individual mandate is because of the relentless lobbying by insurers, and not just on Capitol Hill.  Representatives of the industry made frequent trips to the White House during the debate on reform to twist the arm of President Obama, who had campaigned against the mandate when he was running for president.  

    The insurance reps were persuasive in arguing that the parts of the bill consumer advocates were demanding wouldn’t work unless an “enforceable personal purchase requirement” (a.k.a., the individual mandate) was also included, along with subsidies from the government to help low-income families pay their premiums. And not incidentally, insurers love the mandate because it forces millions more people to buy health insurance policies. The insurance folks made it clear that without the mandate and subsidies, the industry would spend whatever was necessary to defeat reform. So a deal was cut. The industry promised it would not try to destroy reform if it got the mandate, and it would even go along with some of what consumer advocates wanted.

    One of the reasons the White House and Congressional Democrats agreed to the mandate was because they thought, foolishly, that including it in the bill might attract some Republican support.  Not only would it ensure a viable private insurance market, it actually was first proposed by the Heritage Foundation, a conservative think tank. Who would have thought that the mandate would wind up being the most contentious part of the legislation and the basis of the constitutional challenge by Republican politicians that would ultimately reach the Supreme Court?

    The health insurance industry, through its two big trade groups—America’s Health Insurance Plans and the Blue Cross Blue Shield Association—was quick to file an amicus brief when the high court announced it would take up the issue. They argued in the brief that the consumer protections in the law “are inextricably linked to the law’s personal coverage requirement and have to be severed if the court finds the coverage requirement unconstitutional.”

    That was in January. Now that we’re getting close to June, when the court is expected to rule, the industry is rolling out a new phase of its campaign to make sure the consumer protections bite the dust—even, I’m willing to bet, if the justices decide to uphold the entire law.

    The industry undoubtedly chose POLITICO for its ad because the news organization is widely followed inside the Beltway.  Insurers were sending a message to the justices, reminding them of what they wrote in the amicus brief, and also to lawmakers on Capitol Hill, putting them on notice that should the court strike down only the mandate, insurers will be pulling out all the stops to make sure Congress guts the rest of the law.

    “At a minimum,” as AHIP and BCBSA wrote in January, the protections that will have to go are the ones that require insurance firms to sell coverage to anyone who applies for it and that prohibit them from using pre-existing conditions and a person’s medical history to deny coverage or to charge exorbitant rates for it.

    To bolster its case, AHIP is now pointing to what it claims were unintended consequences of certain reforms in the state of Washington several years ago.

    “In the 1990s,” according to the POLITICO ad, “Washington State tried to implement market reforms without a mandate. By 1999, it was impossible for an individual to buy a health insurance policy in 31 of Washington's 39 counties. Learn more about The Link between the individual mandate and market reforms at http://bit.ly/thelinkahip."

    Washington Insurance Commissioner Mike Kreidler confirmed to me that Washington lawmakers in 1999 rolled back some of the consumer protections that had been enacted six years earlier, but he’s not buying AHIP’s prediction that insurers would flee the marketplace if the Supreme Court declares only the individual mandate unconstitutional.

    “I think that would happen only in the absence of other mechanisms and options to help reduce insurers’ risk,” Kreidler said. “For example, creation of an open enrollment period for these plans could minimize the likelihood of people jumping in and out of coverage when they have major procedures planned.

    “Also, here’s what could be different from 1993,” he added. “If the individual mandate is thrown out but the Medicaid expansion and subsidies upheld, you’d likely have fewer people hopping in and out of the market because of those safety nets allowing them to get and keep coverage.”

    Don’t expect the insurance industry to advertise that, though. They want those consumer protections gone. And they will be spending a lot of money in the months ahead to make us all think those protections are not in our best interests after all—regardless of how the court rules. 

    Holding a sign saying "We Love Obamacare," supporters of health care reform rally in front of the Supreme Court in Washington on March 27, 2012, as the court continued hearing arguments on the health care law signed by President Barack Obama. Wendell Potter http://www.iwatchnews.org/authors/wendell-potter

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    It’s challenging enough to knock off an entrenched member of Congress in a primary contest. But California State Sen. Bob Dutton probably didn’t count on the fact that he would also be picking a fight with nearly a million Realtors.

    The Rancho Cucamonga Republican is running against Rep. Gary Miller, a 14-year GOP incumbent in the June 5 open primary. The National Association of Realtors political action committee and a super PAC funded by the trade association have spent more than $709,000 on advertising and direct mail supporting Miller.

    "The amount of money being funneled into this primary from Washington, D.C., special interests on behalf of Miller is mind boggling,” said Clint Lorimore, Dutton’s campaign manager, in an email.

    Actually, the super PAC is based in Chicago, as is the trade association. But the NAR has an office in the capital and plenty of money to spend on Washington politics. The association spent more than $22 million on lobbying last year, according to the Center for Responsive Politics (CRP).

    The NAR is also the sole funder of the National Association of Realtors Congressional Fund, a super PAC, which has spent about $313,000 on independent expenditures in the race with the regular PAC making up the balance.

    Super PACs, made possible by the Supreme Court’s ruling in the Citizens United case, can spend unlimited amounts to support or oppose the candidate of their choice as long as they do not coordinate their activities with the campaign.

    Miller sits on the House Financial Services Committee, which oversees the real estate and insurance industries, and the House Transportation and Infrastructure Committee. He is also the founder of G. Miller Development, a home building and development company.

    The NAR’s employees and regulated PAC have contributed $68,019 to Miller over the course of his career, according to CRP. Only the National Association of Homebuilders has given more.

    That number may seem small, but contributions to federal candidates from political action committees that support multiple candidates are capped at $5,000 per election.

    “It’s fairly clear that they’re [Realtors] going to have a level of access to him that the ordinary American doesn’t have,” said Bill Allison, editorial director at the Sunlight Foundation.

    Phone calls and emails requesting comment from Miller’s offices in Washington, D.C., were not returned.

    Scott Reiter, the managing director of the Realtor's association’s regular political action committee doesn’t see a problem with the super PAC’s pro-Miller expenditure.

    “That’s perfectly legal,” he said. “That’s called democracy.”

    Dutton has also received support from a super PAC — Inland Empire Taxpayers for Jobs has spent $50,365 on his behalf on consulting and direct mail. The group’s biggest backer is Prime Healthcare Services Inc. of Ontario, Calif, which contributed $25,000.

    It’s not clear why NAR spent money from its regular PAC on ads supporting Miller. Unlike a super PAC, regular PACs can make direct contributions to candidates and are subject to contribution limits.

    In the 2010 election, the association’s super PAC spent $1.1 million.

    Miller found himself in a tough race following redistricting. Having represented the once solidly Republican 42nd District since 1998, he chose to run in the 31st District this year after the 42nd became significantly more competitive.

    The National Association of Realtors Congressional Fund was one of the first super PACs to have accepted contributions solely from a related trade association; during the 2010 election cycle, the National Association of Realtors was one of a handful of nonprofits to be responsible for the entire funding of a super PAC, according to CRP.

    This election cycle, the California-based Cooperative of American Physicians has done the same for its super PAC, contributing $2.5 million since the beginning of 2011.

    John Dunbar contributed to this story.

    The National Association of Realtors Building in Washington, D.C.   Alexandra Duszak http://www.iwatchnews.org/authors/alexandra-duszak

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    GALLATIN, Tenn. — Small fires were a part of the job at the Hoeganaes Corp. metal powder plant 30 miles northeast of Nashville. By early 2011, some workers later told investigators, they had become practiced in beating down the flames with gloved hands or a fire extinguisher.

    The company’s own product fueled the fires. Scrap metal rolls into the rust-colored plant on the town’s industrial periphery and is melted, atomized and dried into a fine iron powder sold to makers of car parts. Sometimes, powder leaked from equipment and coated ledges and rafters. Under the right conditions, it smoldered.

    Wiley Sherburne, a 42-year-old plant electrician, sometimes told his wife how this dust piled up everywhere, she recalled. On quieter weekend shifts, he said he could hear the telltale popping sound of dust sparking when it touched live electricity.

    In the early morning of January 31, 2011, Sherburne was called to check out a malfunctioning bucket elevator that totes dust through the plant. Near his feet, electrical wires lay exposed. When the machine restarted, the jolt knocked dust into the air. A spark — likely from the exposed wires, investigators later concluded — turned the dust cloud into a ball of flame that engulfed Sherburne and a co-worker.

    “He’s burned over 95 percent of his body,” doctors told Sherburne’s wife, Chris, when she arrived at the Vanderbilt University Medical Center’s burn unit. “He’s not going to live.” Her husband died two days later.

    The fires at the Hoeganaes plant were not over. Another struck in March, then a third in May. In all, five workers died in accidents that shook this small community. Each man left behind a wife and children. One had four children under 11. Another became a grandfather the day before an explosion caused fatal burns.

    Each blaze here involved combustible dust, a little-noticed danger that has killed or injured at least 900 workers across the country during the past three decades. The fuel has varied, but the effects have been similarly devastating. In Gallatin, it was iron. In Port Wentworth, Ga., sugar. In Kinston, N.C., plastic. Elsewhere, dust from substances as varied as wood, nylon fiber, coal and flour sparked fires and explosions.

    Since 1980, more than 450 accidents involving dust have killed nearly 130 workers and injured another 800-plus, according to a Center for Public Integrity analysis of data compiled by the federal Occupational Safety and Health Administration and the U.S. Chemical Safety Board. Both agencies, citing spotty reporting requirements, say these numbers are likely significant understatements.

    Yet a push to issue a rule protecting workers from the danger has stalled in the face of bureaucratic hurdles, industry pushback and political calculations, the Center for Public Integrity found.

    OSHA, in a statement, said it must “make difficult decisions as to how to best allocate the agency’s limited rulemaking resources.” While addressing dangers like combustible dust and dangerous substances breathed by workers are important, OSHA said, it “has placed a great deal of emphasis on broad rulemaking efforts that have the potential to result in fundamental changes [for] safety and health in the workplace.”

    Representatives for Hoeganaes refused interview requests from the Center for Public Integrity. In a legal filing, the company has denied violating safety standards at the Tennessee plant where Wiley Sherburne died.

    ‘All of a sudden one day, boom’

    A dust fire is, in a sense, the result of a perfect storm. The powder has to form a cloud in a confined area and touch an ignition source, such as a spark, flame or overheated pipe. “It’s this unlikeliness that leads people to the false sense of security that it can’t occur,” said John Cholin, an engineer who has investigated dust accidents for 30 years and has a consulting firm.

    Often, workers don’t know that the dust lurking on flat surfaces could, when dispersed in a cloud, fuel a violent explosion. But experts, worker safety advocates and government officials have been sounding alarms for years.

    Steve Sallman, a health and safety official with the United Steelworkers union, still thinks about the dust fire 20 years ago that severely burned two of his co-workers at an Iowa plant making tires for agricultural vehicles. “It bothers me to this day because it was preventable,” he said.

    Hindsight in the wake of dust explosions has often revealed missed warning signs. Rarely does a company develop a dust problem overnight.

    “It goes along for years with the dust building up, building up, and everything’s fine, nobody’s harmed, nobody thinks anything about it,” said Sandra Bennett, an official at the Tennessee Occupational Safety and Health Administration, which investigated the Hoeganaes accidents. “All of a sudden, one day, boom.”

    Standards to address the danger have existed for more than 85 years, but following them is voluntary for many plants. Where they do apply, enforcement is so haphazard that the association that sets the standards believes this policing duty should be placed in OSHA’s hands.

    The agency seems to agree. In 2009, OSHA announced it was starting the process of issuing a rule to address combustible dust.

    Three years later, the process is still stuck in its early stages, and OSHA has given up on making significant progress this year, moving the topic to its list of “long-term actions.” Some experts point to key impediments OSHA faces: the potential cost of the sweeping rule, an anti-regulatory political climate and an increasingly drawn-out rulemaking process.

    Top agency officials refused to explain the rule’s status. In a statement, OSHA said, “Prevention of worker injuries and fatalities from combustible dust remains a priority for the agency.” But, the statement said, developing the rule is “very complex,” and “could affect a wide variety of industries and workplace conditions. As a result it has been moved to long-term action to give the agency time to develop the analyses needed to support a cost-effective rule.”

    News of OSHA’s decision reached Chris Sherburne at the end of January, around the first anniversary of her husband’s death. “I just couldn’t believe it,” she said. “You put it on the back burner, and that’s where it’s going to stay.”

    Her frustration is shared by victims’ families who have seen other health and safety rules similarly stalled, shelved or eviscerated. Whether it’s combustible wood dust at a sawmill, disease-inducing beryllium at an aluminum smelter or lung-wrecking silica at an iron foundry, OSHA allows workers to face conditions that many experts and even the government’s own scientists consider unsafe.

    OSHA’s statement said it is “committed to protecting workers,” but that “numerous steps in the regulatory process mean OSHA cannot issue standards as quickly as it would like.”

    Not the first time

    Documented dust explosions have been killing workers since the late 1800s or earlier, and technical publications discussing the hazard date to the early 20th century.

    The Chemical Safety Board, an independent federal agency, has examined a handful of major dust accidents and identified disturbing trends. The board, however, can’t issue or enforce rules. Among the catastrophic accidents the board investigated, each plant also had a history of small dust fires that did little or no damage and prompted little concern.

    “You have to consider all those fires as close calls for something that could kill somebody,” the board’s chairman, Rafael Moure-Eraso, said in an interview. “Hoeganaes is precisely the case in point.”

    At the Gallatin plant, periodic small dust fires ignited in certain areas, investigators found. Some employees told state inspectors they put out blazes once or twice a month; others said the fires came about once a week.

    Because the fires had done little damage, workers had come to accept them as part of the job, investigators found. That changed the January day a dust cloud ignited and fatally burned Wiley Sherburne and Wayne Corley.

    Two months later, investigators found, a worker accidentally knocked loose dust that had collected on a furnace and was engulfed in flames. He leaped off a ladder to safety and survived.

    Then, on May 27, sparks triggered an explosion of hydrogen gas leaking from a pipe, investigators determined. The blast knocked dust loose from the rafters, and some of it ignited as it rained down on workers. “There was so much dust in the air that you could only see the areas where it was burning,” one employee told investigators. Three workers died, and two more were injured.

    Last year was not the first time Hoeganaes had experienced the deadly potential of its iron dust. The May accident in particular bore “striking similarities” to one that occurred in 1992 at the company’s plant in Riverton, N.J., said the CSB’s lead investigator, Johnnie Banks.

    Twenty years later, Jeffrey Richardson remembers that accident well. It left him with third-degree burns covering 97 percent of his body. He has one ear and one hand, though it has no fingers. His body is covered with skin grown in a lab; it heals slowly and tears easily.

    “They said my foot and my eyelids were the only place where I wasn’t burned,” he recalled recently. “I still to this day have a nurse come every day to dress wounds that I still have ongoing.”

    As in the May 2011 accident, a hydrogen explosion shook the building, and burning dust fell from the rafters. Richardson recalls it covering him as he struggled to find an escape route. “I could hear it sizzling and cracking,” he said.

    The company contested the 10 serious violations OSHA issued for the fire that burned Richardson, and the agency cut the fine from $22,500 to $15,300. Hoeganaes is now contesting the 25 serious violations and $122,900 in fines assessed by the Tennessee regulators after the 2011 accidents in Gallatin.

    Optional standards, lax enforcement

    Many plants already are required to follow rules addressing combustible dust — at least in theory.

    The National Fire Protection Association, a nonprofit group that sets an array of standards and conducts research and training, first issued guidance in the 1920s. Since then, committees of industry officials and experts have updated the association’s combustible dust standards regularly. Many experts praise the standards, and OSHA often points to them as widely recognized practices when citing violations.

    But two problems limit the standards’ reach: They are optional in many areas, and, where they apply, enforcement is often lax or nonexistent, experts have found.

    Some state and local governments have adopted the NFPA standards as part of their fire codes, while others have chosen the International Fire Code, which has general guidance on combustible dust and references the NFPA codes without explicitly requiring companies to follow them.

    Even where the rules apply, those charged with enforcing them are typically state or local fire inspectors. Inspections of industrial plants are rare, the CSB has found, and inspectors are often ill-equipped to recognize even glaring dust hazards. “The rank-and-file first line of code enforcement is totally ignorant of the problem,” Cholin said.

    In Gallatin, the fire department’s senior inspector visited the Hoeganaes plant in May 2011 — after the first two fires but before the third. He noted a list of concerns, including inadequate emergency lighting and the need to keep exit routes clear. He didn’t mention combustible dust.

    The department eventually noted dust levels during inspections this January and March. Asked if inspectors ever brought up combustible dust with Hoeganaes before last year’s accidents, Fire Chief William Crook said, “If they have, I’m not aware of it.”

    The CSB found a similar pattern after other accident investigations in Indiana and North Carolina: Fire officials had missed dust problems in inspections before deadly accidents.

    Recognizing dangers that could lead to dust fires and explosions also can be a problem for companies and their insurers. In investigations of four dust explosions that killed 28 workers, the CSB found insurers had missed serious dust hazards during audits in each case.

    In Gallatin, the insurer Allianz did note the potential risks from iron dust in a 2008 audit. Hoeganaes commissioned testing in 2009 and 2010 that showed its dust was combustible. In August 2010, Hoeganaes hired a company to clean up the dust, according to a report by the state inspector examining the January 2011 accident. But, the report notes, “it was apparent that the employer was not ensuring clean up [sic] was maintained through good housekeeping practices between these cleanings.” Piles of dust up to four inches thick sat on equipment throughout the plant, the inspector found.

    Such breakdowns point to the need for an OSHA standard, which could lead to “broader recognition and the potential for stronger enforcement,” said Guy Colonna, manager of the NFPA division that oversees the association’s combustible dust standards.

    Still, enforcement by OSHA isn’t a perfect solution. The CSB’s 2006 study found that OSHA inspectors weren’t adequately trained to recognize dust hazards.

    In a statement, OSHA said it developed a three-and-a-half-day session to train its inspectors to recognize combustible dust hazards in December 2007. But the agency can get to only a fraction of the plants that may have dust problems.

    Since October 2007, OSHA has been targeting plants that may have dust problems through a special enforcement program. During that time, the agency and its state counterparts have conducted more than 2,800 inspections. Asked for an estimate of the number of plants that meet the criteria for inspection under the program, though, OSHA said the total was likely “in tens of thousands.”

    Applying the program without a combustible dust standard in place means inspectors must resort to issuing citations for rules not written to address dust. If dust is piling up around the plant, for example, housekeeping standards might apply. If wires are exposed, electrical safety rules might form the basis for a citation.

    OSHA can use the “general duty clause” to cite companies for exposing workers to well-known dangers not addressed by specific standards. This approach, however, often leaves the agency vulnerable to industry challenge.

    Consider Hoeganaes: The last time the plant was inspected by the Tennessee Occupational Safety and Health Administration before the 2011 fires was in 2008. The inspector, Dave McMurray, visited the plant after the agency received information that a few workers had suffered hearing loss — problems for which he ended up citing the company.

    While he was there, however, he saw enough iron dust collecting around the plant to cause concern. “If you put your hand on the railings, it would come away black,” McMurray, who is now retired, recalled in an interview.

    Without a combustible dust standard, he felt his only option was to see whether workers were breathing levels of dust that might pose a health risk — a hazard for which there was a standard. The samples, however, weren’t above the limit. The monitors measured only what was in the air near the workers at the time, not what had collected on ledges and rafters.

    McMurray felt there was little he could do. “It’s a whole world of difference when we have a standard,” he said. “When we have a specific standard, we go for it.” At Hoeganaes, he said, “I went as far as I thought I could.”

    After the fires in 2011, state regulators drew on a variety of standards to cite Hoeganaes. They alleged electrical safety violations, shoddy maintenance of the hydrogen pipe that leaked in May and an inadequate emergency response plan, for example. They accused the company of allowing dust to build up throughout the plant and failing to train workers on its dangers.

    Hoeganaes contested every citation. Among the legal arguments the company has raised: State officials are trying to enforce a combustible dust rule that doesn’t exist.

    ‘Past time to issue a standard’

    Four years ago, Jamie Butler sat on a curb outside the burning wreckage of the packing building at the Imperial Sugar refinery in Port Wentworth, Ga., an industrial hub near Savannah. His brother sat beside him. They’d escaped one of the worst dust explosions in U.S. history.

    There had been a ball of flame, Butler recalled, and then fire everywhere — on the walls, on machines, in the air. Sugar dust had exploded in a conveyor belt, then triggered blasts throughout the plant. Dust that had built up over the years fueled the explosions and rained down on Butler and his co-workers.

    Butler had found a hole that had been blown in the wall and made it, with his brother, to the curb outside. They talked for a minute or two, before emergency responders loaded Butler into one ambulance and his brother into another. “That was the last time I ever saw my brother,” Butler said.

    The disaster killed 14 people — including Butler’s brother and uncle, a longtime plant employee — and left dozens burned. Butler, now 29 with three children, remained in a coma for months; he has severe burns on his head, face, legs and arms. “Since I got burned, I’ll be in the hospital on a regular basis, just sick, throwing up, dehydrated,” he said recently, sitting in his lawyer’s riverfront office. “I don’t sweat how I used to sweat.”

    The blast was the type of catastrophe that can spur reform. Congress held a hearing, and then-Sen. Barack Obama said in a statement, “It is past time to issue a standard to prevent these kinds of accidents.”

    Even before Imperial Sugar, the CSB had investigated a series of deadly dust accidents and recommended in 2006 that OSHA issue a rule to protect workers from dust fires and explosions. After investigating the disaster in Port Wentworth, the board again urged OSHA to act.

    This time, OSHA appeared to be listening. It launched a special enforcement program targeting companies with unaddressed dust problems. In April 2009, the agency announced it was starting the rulemaking process.

    “We felt that our efforts had paid off,” CSB chairman Moure-Eraso said recently. “And then we wait and we wait. And there are more accidents; there are more fatalities. And this process continues, and it seems to be never-ending.”

    Long rulemaking processes have become the norm for OSHA. For the 58 significant standards the agency has issued since 1981, the average time from beginning the process to finalizing the rule was almost eight years, a recent study by the Government Accountability Office found.

    To issue a significant new rule, federal agencies must navigate a complicated process that includes multiple rounds of review — both internally and at the White House’s budget office — and public comment. New laws and executive orders have added requirements over the past three decades.

    OSHA, however, faces particular challenges. The agency must show that a proposed rule is both technically and economically feasible for every industry that would be affected — a research-intensive task. If a rule could affect a significant number of small businesses, OSHA must convene a panel and allow them to raise objections to an unpublished rule draft. It is one of only three federal agencies required to do this.

    OSHA is particularly vulnerable to legal challenges after issuing a standard. In general, agencies must prove to a judge that a rule isn’t arbitrary, capricious or an abuse of discretion. OSHA, however, must show its rule is supported by “substantial evidence in the record considered as a whole” — a much higher standard.

    All of this means addressing combustible dust is a mammoth task. OSHA has to research the dangers of everything from the coal dust at a power plant to the wood dust at a sawmill, then show that addressing the danger would be realistic in each case. The rule would affect many small businesses, and OSHA said in a statement that it plans to convene the required small-business panel this year.

    Industry groups generally haven’t opposed a rule altogether, instead arguing that the rule shouldn’t apply to them. The National Cotton Council, for example, told OSHA many of its members shouldn’t be included and challenged the accuracy of the agency’s list that included past cotton dust fires and explosions. The American Home Furnishings Alliance insisted in written comments that “no federal intervention in our industry is justified or required.”

    The American Chemistry Council has taken a harder line, arguing that a new rule is unnecessary. “We believe that the accidents that have occurred might have been prevented if current OSHA regulations and relevant combustible dust consensus standards had been followed and enforced,” the council wrote to the Center.

    Some see the political climate — in which the phrase “job-killing regulation” is never far from the discussion — as one explanation for the slow progress. “OSHA has its heart in the right place; we know that they’re struggling with this,” said Robyn Robbins, a safety and health official with the United Food and Commercial Workers union. “It’s just a shame that people make this political.”

    Lessons from a previous dust fight

    Many arguments echo those made 30 years ago during a tussle that led to a standard now widely considered a success story. In the late 1970s, a series of deadly grain dust explosions at grain elevators and similar facilities attracted national attention. OSHA announced in 1980 that it was considering a rule to regulate the handling of grain dust.

    Large industry trade groups and small grain elevator operators objected vociferously. The National Grain and Feed Association called the rule “unwarranted” in comments to OSHA and said it “could have a substantial economic impact on the grain and feed industry without substantially improving the safety or health of workers.”

    In 1987, OSHA issued the rule. In 2003, the agency reported evidence that, in the decade after it took effect, deaths in grain dust explosions dropped by 70 percent and injuries by 60 percent.

    In 2010, the National Grain and Feed Association — the same group that had sued OSHA to try to block parts of the rule — noted this “unprecedented decline in explosions, injuries and fatalities at grain handling facilities” in comments submitted to OSHA.

    Nor did meeting the rule’s requirements ruin the industry. The association cited the “economic benefit of implementing the grain handling standard” and wrote, “We firmly believe that there is overwhelming evidence supporting the grain handling standard’s effectiveness in preventing fires and explosions and resulting injuries during a time when grain handling capacity increased almost sixty percent.”

    OSHA’s current attempts to address combustible dust are more complicated, encompassing many different industries with different types of dust. But some view the grain dust rule as an example of what could be accomplished.

    “A general industry standard does have the potential to be at least as successful [as the grain dust standard] in terms of awareness, but how successful depends on the specifics of the regulation,” said Bob Zalosh, a consultant who investigates accidents and advises companies on prevention.

    Some in Congress want OSHA to act now. California Rep. George Miller and two other House Democrats have introduced a bill that would require the agency to issue an interim rule within a year.

    “The fact that workers are killed and injured in all too frequent, clearly preventable combustible dust explosions shows that Congress must act,” Miller said in a statement to the Center. “Legislation is needed to protect workers because of the years it takes to cut through the red tape just to get a final protection in place.”

    ‘Fall through the cracks at every level’

    In Georgia, the building Jamie Butler and his co-workers knew during their time at Imperial Sugar is long gone, consumed entirely by the inferno of February 2008. In its place is a modern packing facility company officials say stands as evidence of what they learned from the disaster. The project, which included some work on the refinery itself, took about two years and cost roughly $220 million, vice president of manufacturing Raylene Carter said.

    “If there is ever an explosion again — and that’s just not going to happen — it would never spread from building to building ever again,” Imperial Sugar health and safety official Kathleen Gonzalez said during a recent tour, pointing to a system designed to blanket the area with water and halt a fire in its tracks.

    Sugar no longer enters the packing building on a conveyor belt — the location of the initial explosion in 2008. It is shot through pipes in pellets packed so densely that they shouldn’t be able to ignite. Sensors can detect the first signs of sparks in the pipes, then automatically isolate the area and flood it with a neutralizing solution.

    Near work areas, vacuums take spilled dust to a vessel outside the building — a contrast from the company’s previous practice of using compressed air to clean dust, which blew it onto ledges and rafters where it eventually was shaken loose, fueling explosions. A sign reminds workers, “Your job is not complete until your work area is CLEAN.”

    The company has told OSHA it “strongly support[s]” issuing a combustible dust rule. “We believe that there is still a low level of knowledge of the extent of hazards of combustible dust in industry,” the company wrote OSHA.

    Such about-faces often come after deaths have occurred — and company officials, inspectors or auditors missed warning signs. The NFPA’s Colonna said he is frequently called to conduct training after explosions — in Georgia after the Imperial Sugar catastrophe, and in Kentucky after a 2003 dust explosion killed seven workers. This March, the Gallatin Fire Department’s two inspectors attended a two-day training seminar on combustible dust led by the NFPA, said Crook, the department’s chief.

    Meanwhile, dust accidents continue. In February, after a dust explosion, OSHA cited a Wisconsin company that makes whey products. In April, the agency issued violations to a New Hampshire wood pellet mill where a dust-fueled fire spread throughout the building. The same month, the agency alleged violations – some of them willful, which OSHA says are intentional violations or those committed with indifference to the law – at an Illinois pasta manufacturer where two workers were seriously burned in a sugar dust explosion.

    “I think the universal theme is that these accidents are a symptom of the fact that there isn’t a comprehensive dust standard,” said Daniel Horowitz, the CSB’s managing director. “Hoeganaes really illustrates how problems like this can fall through the cracks at every level.”

    A father’s memory

    In Gallatin, dust piled up for years despite inspections, audits and small fires.

    “They need a set of guidelines,” Chris Sherburne said. “If there was a standard, I think that would have made a lot of difference because there was so much [dust] there at the time.”

    As the gears grind in Washington, she’s raising a teenage son and tending to a 34-acre patch of farmland. She hasn’t given up on some of the plans she and Wiley made. They had always hoped to build a new house on their land to replace their double-wide, and in December 2010 — about a month before his death — they’d decided to start the following spring.

    Chris stuck to the plan, functioning as her own general contractor. “I decided to just build it and see what happens,” she said recently.

    Last December, Chris and her son moved into their new house. No pictures of Wiley adorn the walls or mantelpieces. “It’s easier for us not to have stuff in plain view,” Chris said. When Wiley’s body was cremated, at first the ashes sat on Chris’ bedroom dresser. “After a few days,” she recalled, “I said, ‘Wiley I can’t look at you every day; I can’t do this.’ He’s in the closet now.”

    Some reminders are inescapable. Chris and her son have kept his tools and work clothes, keepsakes of the man who could fix anything. “You could bring him a motor in a box, and he’d put it back together,” Chris recalled.

    As their son approached driving age, the plan was for Wiley to help him find a clunker and fix it up. Instead, he now drives his father’s souped-up Dodge Ram 2500. “Every now and then, when I see it coming up the driveway,” Chris said, “for a split second I still think it’s Wiley.”

    Wiley Sherburne, a 42-year-old electrician, and the Hoeganaes Corp. metal powder plant where he worked.      Chris Hamby http://www.iwatchnews.org/authors/chris-hamby

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    When it comes to student discipline, suspending kids and a heavy police presence in schools are policies that are doing more harm than good, according to a new report on three especially troubled California districts.  

    The report released Thursday by University of California scholars and Human Impact Partners is an exhaustive profile of students in South Los Angeles, Oakland and the agribusiness hub of Salinas in Central California. All these communities have high levels of family poverty, high rates of student suspension and high dropout rates. Oakland-based Human Impact Partners reviews data and conducts on-the-ground interviews to assess the effects that public policies have on equity and health in communities.

    The report was funded by the California Endowment. The Center for Public Integrity also receives some support from the Endowment.

    The Los Angeles school district has already adopted what’s called “positive behavioral support” as an alternative to out-of-school suspension. But researchers found that some L.A. schools are still failing to use the method. As a result, students are still being suspended and losing hundreds of days of school time. The report delves into the high rate of suspensions for “willful defiance,” and the serious discipline challenges the schools face.

    The researchers also touch on Los Angeles’ school police, the largest school police force in the nation. They recommend that district police officers, sheriff’s deputies and city police “dedicate a meaningful amount of their professional development over the next three years” to learning about positive behavioral support as “an alternative intervention.” 

    The Center for Public Integrity recently obtained and analyzed records of school police citations in Los Angeles, which are heavily concentrated in low-income schools. More than 40 percent of the tickets, many of them for scuffles and disturbing the peace, were issued to kids 14 and younger.

    In Salinas, a heavily Mexican immigrant community, researchers examined the city’s gang problem and efforts to reach younger students and deter them from getting into violent activity. The homicide rate in Salinas is about four times the national rate, researchers noted. Educators have instituted pilot programs in “restorative justice” to get students to talk through and resolve disputes rather than schools relying on suspension to try to reform them.

    The report describes restorative-justice programs now being used in the Oakland Unified School District. The district had about twice the state’s dropout rate of 17 percent in 2010. Students told researchers getting suspended was a chance not to reform behavior, but to “get high” and “steal stuff” and play videogames.

    The Oakland district has other problems.

    Last week, the district was informed that a federal grand jury and the FBI are investigating its school police force. Media reports say two incidents are the focus of the probe. One involves the former schools police chief, who resigned in August after admitting to a drunken verbal outburst laced with alleged racist remarks. The other incident is an officer-involved shooting of a 20-year-old non-student. 

    Another report released this month that scrutinizes Oakland looks specifically at suspensions of black male students in the district. Oakland is home to one of California’s larger African-American communities. The report by the Urban Strategies Center offers suggestions for how to respond to data showing that black male students, 17 percent of enrollment in in the district in 2010, were 42 percent of all students suspended.

    Susan Ferriss http://www.iwatchnews.org/authors/susan-ferriss

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    While much of the world’s focus has been on the civil war in Syria, the island kingdom of Bahrain continues to shake with anti-government protests that started in last year’s “Arab Spring.” While it has received less attention, human rights groups have documented ongoing government abuses.

    Those concerns were enough to put a halt on a weapons sale from the U.S. to Bahrain last fall, but the Obama administration announced last Friday that it has decided to proceed with the sale, despite the ongoing upheaval and protests from both Congress and human rights groups.

    “Bahrain is an important security partner and ally in a region facing enormous challenges,” wrote Pentagon spokeswoman Victoria Nuland in an official statement announcing the sales. “Maintaining our and our partners’ ability to respond to these challenges is a critical component of our commitment to Gulf security.”

    In a nod to the human rights concerns, the Pentagon said the weapons being sold to Bahrain will not include anything that could be used against protestors. Instead, it would be a package of equipment geared towards protecting the country from external threats, including engines for F-16 planes and harbor security boats.

    “Sales of items that are sort of predominantly or typically used by police and other security forces for internal security, things used for crowd control, we’re not moving forward with at this time,” said an unnamed administration official on a conference call last Friday. “That would include things like tear gas, tear gas launchers, stun grenades – those sorts of things.”

    In December, the Center for Public Integrity reported on concerns from the Government Accountability Office that equipment such as night vision goggles could be used by security forces to crack down on protests. The report also raised questions about how the State department often fails to investigate past abuses from foreign security forces slated to receive military technology, which can increase “the risk that [U.S.-funded] equipment may ultimately be used by violators of human rights.”

    A $53 million sale was initially announced last fall, but was frozen in October while the U.S. waited to see improvements on the human rights situation. The administration has declined to disclose a total list of what materials will be sold to Bahrain, or how much the new package will cost.

    Bahrain is a major strategic partner for the U.S. The island nation received $80.4 million in military financing from the U.S. between 2005 and 2010 and is home to a 60-acre U.S. naval base which houses the U.S. Fifth Fleet. The fleet patrols the waters of the Middle East and is responsible for making sure the Strait of Hormuz, which a significant portion of the world’s oil passes through, remains open. The fleet would also be a first line of defense against any aggressive moves from Iran.

    The protests have largely been driven by a rift between Bahrain’s Sunni ruling family and its majority Shi’ite population, but have been exacerbated by human rights abuses suffered by protestors at the hands of government forces.  In November, an independent panel formed by the Bahrani government issued a report detailing a number of abuses, including commonplace torture in police stations such as electrocution and threats of rape. In response to the report, the government promised to reform its internal security forces — something that has yet to happen, according to experts.

    Human Rights Watch released a report in late April documenting ongoing abuses in the island nation. The group acknowledges that changes have been made, like putting cameras throughout police stations to record abuses, but found that the torture has simply moved outside the police station. In one case the group interviewed two teenage boys who were taken to an empty lot and beaten severely.

    “The situation has not improved very much,” Joe Stork, Deputy Director for Human Rights Watch’s Middle East and North Africa Division, said in an interview. What improvements have occurred have been mostly cosmetic, “not a basic behavior change,” he says.

    Stork believes the Obama administration cares about the human rights issue, but feels that political concerns trumped concerns over abuses. “To be meeting a Bahranian request for certain kinds of arms is a bad move in our view,” he says.

    At least two leading Democrats in Congress agree the arms deal is a bad idea. “The U.S. and the Government of Bahrain share strategic interests, but if history has taught us anything, this is a time to demonstrate our unambiguous support for the aspirations of the Bahraini people for greater political freedom,” wrote Sen. Pat Leahy (D-Vt.) in a statement released Friday. The author of the so-called Leahy Law, which attempts to prohibit arms sales to foreign security forces facing human rights concerns, added that the deal “sends the wrong message.”

    “This is exactly the wrong time to be selling arms to the government of Bahrain,” Sen. Ron Wyden (D-Ore.) added in a separate statement. Last October, Wyden introduced legislation to block arms sales to the country. “Reform is the ultimate goal and we should be using every tool and every bit of leverage we have to achieve that goal. The State department’s decision is essentially giving away the store without the government of Bahrain bringing anything to the table.”

    The controversy may continue for some time. Stork says he expects the protests to continue. Protestors “feel betrayed they feel sick and tired of having their demands ignored,” he says. “I don’t see this ending, and I don’t think the government is capable of putting it down.”

    Bahraini military boats with U.S. and Bahraini forces aboard, seen through the deck of a British military supply ship, approach for a mock interception in 2006, about 15 miles off the coast of Bahrain. Aaron Mehta http://www.iwatchnews.org/authors/aaron-mehta

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    You don’t have to be a campaign donor or corporate executive to get an audience with Wisconsin Gov. Scott Walker. But it doesn’t hurt.

    Walker received contributions from employees or political action committees at more than half of the 130-plus companies that appear in his official calendars, according to an analysis by the Wisconsin Center for Investigative Journalism.

    These employees and PACs gave Walker at least $1.5 million since May 2009, just after he declared his candidacy for governor.

    “Wisconsin is Open for Business,” the Republican governor proclaimed in a press release on the night he was elected. His calendars from January 2011 through January 2012 bear out this stance, revealing a steady stream of contacts with top company officials.

    Walker’s spokesman, Cullen Werwie, said the governor’s calendars reflect his priorities.

    “Gov. Walker has been working hard to encourage job creators to expand in Wisconsin,” Werwie said in an email interview. “It should be no surprise that those interested in creating jobs in Wisconsin would meet with the governor.”

    Center reporters pored through more than 4,400 calendar entries during this 13-month period to tally Walker’s contacts.

    The analysis suggested that big donors got more access. Three-quarters of all PACs that have given Walker at least $20,000 are associated with companies that show up on his calendar. In contrast, about a quarter of the PAC donors that gave under $20,000 are listed.

    Companies and their executives appear in Walker’s calendars in jobs announcements, factory tours, check presentations, phone calls and private meetings — sometimes labeled “no media,” as with 3M and Caterpillar Inc.

    The list includes many big businesses, such as Harley-Davidson, IBM, Northwestern Mutual, Johnsonville Sausage, Walgreens and Uline. No one company dominated Walker’s time: Leading the list, with four contacts, was Ashley Furniture, based in Arcadia, Wis.

    “This governor has long been known as being pro-business, which led to business people giving money to his campaign,” said Joe Heim, a political science professor at UW-La Crosse. “Whether the money was related to the access remains to be seen.”

    Heim noted that, according to the Center’s analysis, Walker hasn’t received campaign contributions from two-thirds of executives who spent time in person or on the phone with him.

    “You can have access to the governor without contributing, to be blunt,” Heim said.

    Mike McCabe, executive director of the nonpartisan watchdog Wisconsin Democracy Campaign, disagreed, noting that just 1 percent of the population contributes to political campaigns. He said Walker’s calendars lend credence to citizens who believe that “politics is just a rich person’s game, and you have to have a lot of money to have a voice.”

    McCabe added that direct giving to candidates is only a small part of the cash that major players pump into campaigns, with much of the rest coming from outside special interests.

    “I guarantee you that the numbers you describe understate the companies’ involvement,” he said.

    Does money equal access?

    Former Democratic Gov. Jim Doyle was once billed as a participant in a “Meet and Greet” breakfast with the Dairy Business Association “exclusively for DBA members who have contributed to the DBA Conduit or Political Action Committee.”

    In Walker’s calendars, the connection between money and access is never so explicit. And they rarely say what’s discussed.

    For example, the calendars show Walker visiting roofing distributor ABC Supply Co. Inc. on Jan. 18, 2011, for a meeting of a Rock County economic development group.

    Recently released video footage shows Walker at this meeting talking to Diane Hendricks, the company’s executive vice president, about his plan to curtail collective bargaining for public workers, which he described as the beginning of a “divide and conquer” strategy.

    Hendricks later became Walker’s largest contributor. She gave Walker contributions at or near the maximum $10,000 limit in each of the last two election cycles, then last month wrote him a $500,000 check, taking advantage of a state law that removes the limit for officials facing recalls. Walker also met with Hendricks twice in April 2011, at least once in her capacity as a board member of WisconsinEye, the calendars show.

    Another donor, John Bergstrom, who owns the state’s largest car dealership and has given Walker $4,000 since January 2010, received a call from Walker on Jan. 20, 2011, according to the calendars. It was the day after a state Senate committee introduced a bill at Walker’s request that would exempt a single parcel of land owned by Bergstrom from state wetlands rules. The exemption passed, in advance of a bill that eased restrictions on infilling of all wetlands.

    Georgia Duerst-Lahti, a professor of political science at Beloit College who signed the Walker recall petition, said the governor’s meetings with corporations and donors “reflects the Republicans’ pro-business ideology, but also the governor’s astounding fundraising.”

    Walker has raised more than $25 million since taking office. “How’s he going to raise that kind of money without courting corporations?” she asked.

    Heim cited an example — Walker’s acceptance of a phone call in February 2011 from a blogger posing as billionaire supporter David Koch — to illustrate his belief that while money buys access, it does not always buy influence.

    “Walker promised nothing,” Heim said. “It was simply a friendly conversation. I bet if I called, he wouldn’t answer. But access is not necessarily influence.”

    Few union contacts

    While the calendars documented many corporate encounters, the Center found scant evidence of contacts between Walker and organized labor. On April 21, 2011, Walker met with Terry McGowan and Robb Kahl of Local Operating Engineers 139, a union that endorsed Walker for governor and made $12,000 in PAC contributions to his campaign.

    McGowan has since expressed discomfort with Walker’s remarks to Hendricks. The union is not endorsing a candidate in the current recall election.

    Mary Bell, president of the Wisconsin Education Association Council, the state’s largest teachers union, confirmed that she spoke briefly with the governor on Feb. 9, 2011, as his calendar reflects. But Bell said the requested follow-up meeting never happened. She accused Walker of being more interested in “putting up a front than trying to work with us in a productive way.”

    Spokesman Werwie declined to comment on why Walker has seldom met with union officials. But he did say the governor’s schedule “is set and based on how to best create private sector jobs in Wisconsin, which is why (he) met with private sector union representatives, who have largely been a partner in economic development.”

    Walker faces Milwaukee Mayor Tom Barrett on June 5 in a nationally watched recall election.

    This three-part series, The Walker Calendar Files, including an interactive graphic of calendar entries, is available at: wisconsinwatch.org/walkercalendars.

    The nonprofit and nonpartisan Center (WisconsinWatch.org) collaborates with Wisconsin Public Television, Wisconsin Public Radio, other news media, MapLight and the UW-Madison School of Journalism and Mass Communication. Works created, published, posted or disseminated by the Center do not necessarily reflect the views or opinions of UW-Madison or its affiliates. 

    Wisconsin Gov. Scott Walker speaks Jan. 3, 2011, at an inauguration ceremony at the state Capitol in Madison, Wis. Kate Golden http://www.iwatchnews.org/authors/kate-golden Bill Lueders http://www.iwatchnews.org/authors/bill-lueders Amy Karon http://www.iwatchnews.org/authors/amy-karon

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  • 05/31/12--20:20: About this story
  • This story was reported by Kate Golden, Bill Lueders and Amy Karon for the Wisconsin Center for Investigative Journalism


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