SALEM, Ore. — Do candidate-specific super PACs pose a greater threat of corruption to democracy than multi-candidate super PACs, Federal Election Commission Chairwoman Ellen Weintraub asked Friday at a Willamette Law School symposium on political money and influence.

The answer, Weintraub said in response to her own question, "could be yes."

"I would probably define corruption a little more broadly than the Supreme Court does," Weintraub added. 

Ahead of last year's elections, candidate-specific super PACs proliferated.

President Barack Obama's allies, for instance, created Priorities USA Action, while GOP operatives launched Restore Our Future to support the presidential ambitions of Republican Mitt Romney.

In fact, every candidate during the Republican presidential primary was aided by at least one super PAC active on his or her behalf. Many times, one wealthy donor, or a small group of wealthy funders, provided the bulk of the money these groups raised.

Dozens of single-candidate-focused super PACs are currently registered with the FEC, and Weintraub, a Democrat, told the crowd at the Willamette Law School that these days candidates are asking, "Who are we going to get to start our super PACs?"

Casino magnate Sheldon Adelson and his wife, Miriam, notably combined to provide $20 million of the $23.9 million that the super PAC Winning Our Future raised through March. Other relatives of Adelson were responsible for an additional $1.5 million to Winning Our Future.

That group helped keep afloat the candidacy of former House Speaker Newt Gingrich, who personally thanked the Adelsons for their financial support when he dropped out of the race. 

Meanwhile, former Sen. Rick Santorum's cash-poor campaign was also substantially aided a super PAC called the Red, White and Blue Fund. Wyoming businessman Foster Friess was one of the largest bankrollers of the operation, and Friess himself traveled with Santorum on the campaign trail.

Weintraub noted that these super PACs kept the candidacies of Gingrich and Santorum alive "long past the time" that they could have sustained themselves on limited contributions alone.

Presidential candidates in 2012 could accept no more than $2,500 per individual donors, while contributions to super PACs, which are not allowed to coordinate their spending with candidates, are not limited.

At the symposium, Weintraub also defended her frequently criticized agency, saying its membership of three Democratic commissioners and three Republican commissioners was designed to find compromise. Nevertheless, she joked that when you Google the FEC, the most frequent result is the word "dysfunctional."

Additionally, Weintraub noted that the FEC received more complaints during the 2012 election cycle than ever before, and she encouraged making new rules about political spending by U.S. subsidiaries of foreign-owned companies, an issue that arose in 2012 when a company wholly owned by a Canadian firm donated $1 million to Restore Our Future.

"It's an area that we really ought to do a rulemaking on," she said.

The Center for Public Integrity can benefit from the Freedom of the Press Foundation’s latest crowd-funding campaign in support of “aggressive, public-interest journalism focused on exposing mismanagement, corruption and law-breaking in government.” A donation to this fund over the next two weeks will be matched up to $10,000 by actor and Foundation board member John Cusack.

The Freedom of the Press Foundation has already raised about $200,000 for a select handful of organizations, from the National Security Archive to WikiLeaks.

Foundation support for the Center will go toward our National Security reporting on Pentagon spending. We’ll examine what makes up the biggest defense budget in the world. We’ll detail what’s gone wrong in some of the Defense Department's most troubled and costly projects like the F-35 fighter jet and the Navy’s Littoral Combat Ships. We’ll look at the explosion of military entitlements, and map how top defense contractors in Washington regularly finance the election campaigns of the lawmakers who oversee or control their budgets.

Crowd-funding by the Freedom of the Press Foundation is built on the recognition that “this kind of transparency journalism — from publishing the Pentagon Papers and exposing Watergate, to uncovering the NSA’s warrantless wiretapping program and CIA secret prisons — doesn’t just happen. It requires dogged work by journalists, and often, the courage of whistleblowers and others who work to ensure that the public actually learns what it has a right to know.” 

As the Foundation acknowledges, increasingly it is the non-profit media and transparency organizations like The Center for Public Integrity that are emerging as a critical component of the journalism landscape. “Leveraging the power of the Internet, these organizations are helping to reinvent and reimagine independent watchdog reporting.”

I couldn’t have said it better. 

Until next week,

Bill Buzenberg
Executive Director

Hundreds of former Securities and Exchange Commission employees and officials are representing clients or employers before the agency, sometimes helping them score significant regulatory victories, according to a draft of a report scheduled for release today by the Project on Government Oversight, a nonpartisan watchdog organization.

From 2001 through 2010, "more than 400 SEC alumni filed almost 2,000 disclosure forms saying they planned to represent an employer or client before the agency," the report states.

It continues: "Those disclosures are just the tip of the iceberg, because former SEC employees are required to file them only during the first two years after they leave the agency."

The report cites high-profile financial firms such as UBS, JPMorgan Chase & Co. and Alaska Air Group Inc. as benefiting from the work of former SEC employees. Such ex-SEC officials have helped the companies they now represent win favorable regulatory rulings, the report asserts.

Former commission officials "routinely help corporations try to influence SEC rulemaking, counter the agency’s investigations of suspected wrongdoing, soften the blow of SEC enforcement actions, and win exemptions from federal law," POGO writes. "It matters because the SEC has the power to affect investors, financial markets and the economy."

Former SEC officials most frequently land at law, accounting and lobbying firms, as well as financial consulting outfits, according to federal disclosure reports POGO analyzed.

Topping the list are the ACA Compliance Group, Wilmer Cutler Pickering Hale and Dorr LLP, Deloitte, Ernst & Young and KPMG.

Along with the the 117-page report, POGO is releasing an updated, searchable database of former SEC employees, tracking who they're now employed by.

POGO released a related study in 2011.

It’s no surprise that American corporations spend billions of dollars each year on lobbying, trying to gain favorable treatment from legislators. What some may find a bit unnerving is the industry that’s leading the pack in these efforts.

You might think our nation’s defense and aerospace companies, which have legions of hired guns on Capitol Hill, are the leaders.  Or perhaps Big Oil, which is perpetually fighting  with environmentalists and consequently needs friends in Washington to block what it considers onerous legislation or regulations.  

In both cases, you’d be wrong. It’s actually the pharmaceutical industry that spends the most each year to influence our lawmakers, forking over a total of $2.6 billion on lobbying activities from 1998 through 2012, according to OpenSecrets.org. To get some perspective on just how big that number is, consider that oil and gas companies and their trade associations spent $1.4 billion lobbying Congress over the same time frame while the defense and aerospace industry spent $662 million, a fourth of Big Pharma’s total.

(Number two on the OpenSecrets list, by the way, was my old industry, insurance, which spent $1.8 billion. Although health insurers were among the biggest spenders, the list also includes property and casualty and auto insurers.)

 The huge sum of money our nation’s drug makers lavish on Congress each year begs the question, what are they seeking in return? Surely it has something to do with the fact that our nation’s legislators turn a blind eye as pharmaceutical companies engage in predatory pricing practices while enjoying exclusive rights to manufacture drugs for 20 years or more. All at the same time that drug costs and drug price inflation are among of the main drivers of health care costs for individuals and families and threaten the fiscal health of our public health care programs.  

To get some idea of the impact of all this on the American health care consumer, it is instructive to compare drug prices in the United States to those in other countries, where governments set a limit on price increases. While it’s not news that U.S. residents pay more for the same drugs as our foreign counterparts, what is not as well understood is how that gap grows ever larger each year as drug companies around the world dig ever deeper into the pockets of sick Americans to bolster their profits and meet earnings expectations of Wall Street analysts.  

Each year, the Canadian government’s Patented Medicine Prices Review Board releases a study analyzing drug prices around the world, and according to that study prices in the United States have risen an average of 8 percent a year from 2006 through 2011, while drug prices in Canada have remained flat. The impact that has on the divergence in pricing for the U.S. health care consumer is considerable.  

Back in 2006 for example, U.S. consumers paid about 70 percent more than our northern neighbors for prescription drugs still on patent, according to the Canadian board. Five years later, in 2011, that difference had surged to 100 percent. And with drug price inflation in the United States hitting 11 percent in 2011, that gap will undoubtedly grow ever wider in the future.  

The influence that Big Pharma has purchased by lobbying our nation’s legislators has an impact that touches virtually every American. Not only does it affect health insurance premiums, but it also impacts the solvency of our Medicare system, which was expanded in 2006 to include a prescription drug benefit. That was good news for Medicare beneficiaries, of course, but even better news for the pharmaceutical industry. That’s because the industry’s friends in Congress (and the White House at the time) went along with Big Pharma’s demand that Medicare not be allowed to negotiate pricing with drug makers to make medicines more affordable to beneficiaries.

So not only did drug makers get a huge new revenue stream from taxpayers, but they pulled a fast one on us.  Insurers and hospitals and even the Department of Veterans Affairs can bargain with drug makers to get better deals on prices. But, incredibly, not the Medicare program.

The Congressional Budget Office estimates that the government could save $112 billion over the coming decade if Congress reconsidered its 2006 gift to drug makers and gave Medicare the ability to negotiate prices.

Remember that the next time you hear a politician say that the only way to keep the program from going broke is to cut benefits and raise the eligibility age for Medicare from 65 to 67.

In the weeks ahead, in addition to keeping an eye on how health insurers will be seeking to weaken the consumer protections in ObamaCare so they can keep meeting Wall Street’s profit expectations, I will explore the many problematic issues that Congress’ hands-off attitude toward the pharmaceutical industry has on the American health care consumer — both on pricing and on drug makers’ reluctance to invest in new drugs that don’t have blockbuster appeal.

The massacre of 20 schoolchildren and six adults at the Sandy Hook Elementary School in Newtown, Conn., has placed gun violence squarely at the front of the national agenda. Long-skeptical legislators have expressed a new openness to at least consider laws that might keep guns out of the hands of criminals and the mentally ill. Polls show increased support for some new restraints on guns. And just a month after the massacre, President Obama signed nearly two dozen executive actions and proposed a package of legislative initiatives that together represent the most comprehensive effort in decades to reduce what he called “the broader epidemic of gun violence in this country.”

Conspicuously absent from the president’s agenda, however, is much of anything that might address the stunning and widespread weaknesses that have for years crippled the federal agency responsible for enforcing the nation’s gun laws — the Bureau of Alcohol, Tobacco, Firearms and Explosives. Yes, the president announced his nomination of a full-time director for the long-leaderless agency —widely known as ATF — and some of the new proposals do tacitly acknowledge a number of the agency’s long-standing challenges. But the initiatives are modest, and Congress may not go along with any of them. So for now, the bureau remains systematically hobbled by purposeful restrictions, flimsy laws, impotent leadership and paltry budgets. And it’s not at all clear there’s anything on the horizon that would change that situation.

“If you want an agency to be small and ineffective at what it does, the ATF is really the model,” says Robert J. Spitzer, author of The Politics of Gun Control. Spitzer, a political science professor at the State University of New York College at Cortland, says the ATF’s critics, in particular the National Rifle Association (NRA), have been “extremely successful at demonizing, belittling and hemming in the ATF as a government regulatory agency.” The result, he says, is an agency with insufficient staff and resources, whose agents are “hamstrung” by laws and rules that make it difficult or impossible to fulfill their mission.

ATF declined to make any senior officials available for an interview. But  Special Agent  George Semonick, a spokesman for the agency noted that  ATF “does not make the laws and regulations...ATF will hold to what the laws and regulations allow us to do."

A history of controversy

The ATF traces its roots to 1791, when Treasury Secretary Alexander Hamilton tasked his agents to collect a tax on domestic spirits. Since then it has never seemed able to shake its connection to booze. It has had only one prominent director, Eliott Ness, made famous in the TV series "The Untouchables," who ran the agency during Prohibition.

The ATF gained jurisdiction over guns in 1952, but it was not until passage of the Gun Control Act in 1968 that it became the Division of Alcohol, Tobacco and Firearms. Even so, many observers have long argued that one of ATF’s challenges is that it is tasked with carrying out a jury-rigged amalgam of functions —collecting taxes, regulating a disparate group of industries and investigating gun crimes.

It is, perhaps, no coincidence that the agency became a lightning rod for controversy in the late 1970s, around the time the National Rifle Association was taken over by a contingent set on transforming what had historically been an organization of hunters, marksmen and conservationists into a single-issue political operation with an uncompromising view of the Second Amendment.  For the new NRA leadership, ATF was an irresistible target, and the lobbying group has been shooting it full of holes ever since —with some healthy assistance from ATF’s own missteps.

In 1981, when Ronald Reagan was in the White House, the NRA produced a film called It Can Happen Here in which ATF agents were attacked as “Nazi Gestapos” and “jackbooted fascists.” Criticism of the ATF grew so heated that Reagan, a strong gun-rights advocate, recommended dismantling the agency.

That idea was resurrected in 1993 by Vice President Al Gore’s National Performance Review, which suggested moving ATF regulatory operations into the IRS and its enforcement arm into the FBI. The same year, the ATF was fiercely attacked for its mishandling of a raid on the heavily armed compound of the Branch Davidian cult near Waco, Texas, in which four ATF agents were killed and 20 were wounded. Weeks later, after the FBI inserted tear gas into the compound, it burned to the ground, resulting in the deaths of some 80 men, women and children.

Waco became a cause célèbre for anti-government, gun-rights activists. In a 1995 fundraising letter, Wayne LaPierre, now the NRA’s executive vice president, castigated ATF agents as “jack-booted government thugs.” Six days later, another ATF-hater, Timothy McVeigh, blew up the Murrah Federal Building in Oklahoma City, Okla., killing 168 people — including 19 children under the age of 6. McVeigh reportedly targeted the building because it contained a regional ATF office. And former President George H.W. Bush turned in his lifetime NRA membership, calling LaPierre’s letter “a vicious slander on good people.”

Most recently, between 2011 and 2012, the ATF was the subject of virtually nonstop investigations by House and Senate committees and the Justice Department’s inspector general for conducting a botched gun-tracing operation along the Southwest border. Operation Fast and Furious allowed some 2,000 guns to cross into Mexico. ATF agents watched “straw purchasers,” lawful purchasers who stand in for the real buyers, walk off with hundreds of high-powered weapons, many of which later turned up at crime scenes in Mexico, two at a site where a U.S. border agent was killed.

Leadership

ATF’s management came in for harsh criticism following the Fast and Furious operation, but it was far from the first time that the agency’s leadership had been questioned. Following the Waco debacle, an exhaustive Treasury department review was sharply critical of ATF’s performance. The report said the initial probe into the Davidians “was an appropriate response to a dangerous situation” — the compound contained 48 illegal machine guns —and the preponderance of the evidence indicates the Davidians fired first. But the review also asserted that the operation’s on-site leaders lacked the expertise for such a large-scale operation and made fatal errors in judgment in the absence of effective supervision from headquarters. ATF director Stephen Higgins resigned.

Months before the Fast and Furious revelations, a Nov. 2010 review of ATF gun trafficking efforts at the border by the Justice IG cast a different, but also unflattering light on agency managers — portraying them as timid, and uninspired. The report quotes ATF agents who said they “felt … discouraged from conducting … complex conspiracy cases,” and cites one special agent in charge who said he “preferred his agents to initiate cases that could be completed within one month rather than cases that involve surveillance, wiretaps and other investigative methods typical of complex conspiracy cases.”

Operation Fast and Furious,  which took months, did involve wiretaps and attempted to get at higher-ups in the Mexican cartels,  may have been in part a reaction to that earlier Justice IG probe — but by any account, it was not a success, and did not reflect well on ATF management. The fallout from Fast and Furious led to the resignation of Kenneth Melson, the ATF’s acting director at the time of the operation, and a top Justice Department official. Two ATF officials in the Phoenix, Ariz., office, where the operation was headquartered, were transferred to Washington. A scathing Justice Department inspector general’s report singled out 17 officials for possible administrative or disciplinary action.

Although critics charged that the congressional inquiry into Fast and Furious was highly politicized, the Justice IG’s indictment of the ATF’s leadership was incontrovertible. “Our investigation identified serious failures by the leadership of ATF,” the September 2012 IG report stated, pointing to “a series of misguided strategies, tactics, errors in judgment, and management failures that permeated ATF Headquarters and the Phoenix Field Division.” The IG found that the operation “received little to no supervision by ATF Headquarters” and that the “failures within ATF ... were systematic and not due to the acts of only a few individuals.”

But these indictments aside, the weakness of ATF’s leadership is, in part, a matter of design. President Obama’s recent nomination of Acting Director B. Todd Jones to permanently head the agency merely highlighted the fact that Congress has forced the ATF to operate without a full-time leader since 2006; that’s when lawmakers changed the position from an appointment to one requiring Senate confirmation.

 Jones is its fifth acting director in the past six years. Senators even refused to approve President George W. Bush’s nominee, Michael J. Sullivan, a former Republican state legislator and U.S. attorney. His confirmation was blocked by three Republican senators who accused him of being hostile to gun dealers and expressed concerns about ATF’s “overly aggressive” enforcement of gun laws.  The Senate also did not act on Obama’s first nominee, Andrew Traver, the chief of ATF’s Chicago office. The NRA said Traver was “deeply aligned with gun-control advocates and anti-gun activities.” Iowa Republican Chuck Grassley, the ranking minority member of the Senate Judiciary Committee, said the Justice Department never produced documents needed to move forward on Traver’s nomination. Grassley has now also expressed concerns about Jones, as has a former FBI official in Minnesota, where Jones has also been serving as U.S. Attorney. Other law enforcement officials in the Twin Cities area have supported Jones.

Higgins, who served as ATF director between 1982 and 1993, says that trying to get anyone confirmed as ATF director is “almost an impossibility” because of the influence of special interests. He says that the lack of a full-time director is damaging both to employee morale and agency operations. “It sends all the wrong messages to the people inside the agency. It says the administration doesn’t think it’s important who’s director, and it says the director’s job is about politics.... And if changes need to be made in the agency, there’s no one to make those changes.”

Resources

The ATF employs about 5,000 men and women, approximately the same number of staff it had a decade ago; about half are special agents assigned to conduct criminal investigations. That’s a force about the size of the Harris County, Texas, Sheriff’s Department, and the same number of agents that ATF had in 1972 when it separated from the Internal Revenue Service and became its own bureau. In a letter to Vice President Joe Biden’s Gun Violence Commission, 108 academic researchers complained that the ATF’s funding was “stagnating” while the budgets of law enforcement agencies such as the FBI had seen “dramatic expansions.” Since 1972, the Drug Enforcement Administration’s staff has more than doubled, while the FBI’s is up by two-thirds. The ATF’s current budget of $1.15 billion is little changed from the $900 million it received 10 years ago.

Higgins and others intimately familiar with the agency’s history say the root of the problem is that ATF has no political constituency, no one invested in seeing it succeed and willing to stand up against those determined to see it fail. The success of ATF’s critics in reining in its authority is nowhere more evident than in the bureau’s appropriation statute, a two-page document that devotes 11 lines to describing the agency’s budget and the remaining 79 lines to proscriptions on its powers. Many of these “riders,” as they’re known, go to the agency’s most basic investigative functions (see chart). Two of the riders ban consolidation and computerization of records. One limits access and use of crime gun trace data, while another is designed to undermine the credibility of whatever trace data are released. One rider overturns ATF efforts to ban the import of large-capacity shotguns, which the agency found had no “sporting purpose.” Another overturned an ATF regulation to limit the import of dangerous weapons under a law originally designed to protect collectors of “curios and relics.”

Perhaps the most iconic of these riders is one that literally bars the oft-suggested transfer of ATF functions to any other agency such as the FBI or Secret Service, which have stronger   reputations and more public support. “These riders are designed to keep the functions of ATF within that agency so they can be targeted for criticism,” says Adam Winkler, author of Gun Fight: The Battle Over the Right to Bear Arms in America. “It’s helpful to have a clear villain.”

No databases and no registration

Of course the NRA has a starkly different view of what the ATF and gun control advocates view as unreasonable restraints. Chris Cox, the executive director of the NRA’s lobbying arm, the Institute for Legislative Action (ILA), did not respond to an interview request. But last February, in the NRA magazine First Freedom, Cox wrote, the “NRA-ILA puts a great deal of effort into protecting gun owners by urging the Congress to pass ‘riders’... that help accomplish our agenda....” An NRA press release from November 2011 heralded the riders in the ATF appropriation as “Twelve Big Wins for Gun Owners.”

According to Cox, the most important of the ATF riders “is a prohibition on creating or maintaining a database of gun owners or guns,” which the NRA and other gun-rights advocates say could be used by a tyrannical government to confiscate firearms.  The rider, which dates back to 1978, was a response to President Carter’s attempt to create a national registry of handguns.  A related rider, dating to 1997, bars the government from creating an electronic database of the names of gun purchasers contained in 597 million gun sale records from 700,000 out-of-business dealers. (Those dealers are required by law to turn their records over to the ATF.) In addition, a 1986 law, the Firearm Owners’ Protection Act (FOPA), explicitly forbids the government from creating a database of gun owners.  

Higgins was stoic about the long-standing ban on databases. “Everyone in the agency understood that things that made sense in the modern era — such as automation — just weren’t going to happen.” But Higgins also said that working through mountains of paper and microfiche records is a huge waste of agents’ time and taxpayer money. As a practical matter, the lack of a computerized records system for gun sales means that a crime gun trace that might otherwise be accomplished in a matter of seconds can take up to two weeks.  

Today, gun sale records are kept at 60,000 separate locations by the nation’s 60,000 federal firearms licensees (FFLs). With a centralized database, an ATF agent in possession of a gun found at a crime scene could simply plug the gun’s serial number into a computer and identify the name of the dealer who sold the weapon, along with the name of the first purchaser. Without a database, agents must often embark on a Rube Goldberg-style odyssey, contacting the gun’s manufacturer or a gun’s importer who will direct the agent either to a middleman who sold the weapon to a dealer or to the dealer himself, who can identify the first buyer. Dealers are required to keep records of each firearm transaction. Frequently, however, the records are on paper, and dealers can’t locate particular ones quickly. At the same time, there is no law requiring consolidation of wholesale weapon transfers — those sales by the manufacturer or middleman — which means ATF inspectors have no way of knowing whether a dealer’s ledgers accurately represent all of the guns he has bought or if he is illegally selling guns off the books.

One gun database that works

Joseph Vince, a former ATF special agent and now a partner at Crime Gun Solutions, a consulting firm, says solving gun crimes is all about gathering information and having the tools to make sense out of it. He says U.S. gun laws often make that work far more difficult. “People talk about 9/11 and not connecting the dots; but when we talk about gun laws, we’re taking the dots off the paper.” Vince says concerns that a centralized database of guns and gun owners will lead to gun confiscation have been disproved by 80 years of history with the National Firearms Act, a 1934 law that requires citizens who own machine guns, short-barrel shotguns and certain other highly dangerous weapons to register them with the federal government. Owners of NFA firearms, as they are known, are fingerprinted, photographed and subjected to an FBI background check, and the serial numbers of their guns are kept in a federal database, whose contents, Vince says, have never been divulged outside of a legitimate law enforcement inquiry. Most important, these weapons are rarely used to commit crimes. The NFA has effectively removed these guns from the criminal marketplace.

Vince notes that NFA weapon owners are also required to obtain a clearance from a local law enforcement authority, because these officials are more likely to know whether a prospective machine-gun owner is a responsible citizen. “If you’ve got anger issues, if you’re getting involved in weekly brawls at bars or beating your wife, you shouldn’t have a firearm,” says Vince. “It’s just common sense.” Vince and some gun control advocates argue that assault weapons and other modern, high-powered guns should be brought under the registration requirements of the NFA. The assault weapons ban recently proposed by Sen. Dianne Feinstein, D-Calif. includes no registration language.

Background checks miss many buyers

The centerpiece of the president’s just-released gun agenda is a proposal to require, in his words, “universal background checks for anyone trying to buy a gun.” Under the 1993 Brady Handgun Violence Prevention Act, licensed dealers are required to run a background check through the FBI’s National Instant Criminal Background Check System (NICS) before selling a firearm. Between 1998 and 2012 the FBI conducted more than 160 million background checks and turned away nearly a million prohibited buyers, including convicted felons, domestic abusers, illegal aliens, drug abusers and so-called mental defectives.

The problem with the current law is that it covers only guns sold by FFLs; there are currently no background checks for sales by "private sellers," that is, individuals and unlicensed dealers, many of whom sell at gun shows, flea markets, or on the Internet. President Obama and gun control groups have suggested that as many as 40 percent of all gun purchases are made through unlicensed sellers, and New York City Police Commissioner Raymond Kelly estimated about 6 million such sales last year.  

Selling guns without a license was made a lot easier when Congress passed the 1986 Firearms Owners’ Protection Act, which narrowed the definition of “those who engage in the business of” selling firearms and were required to buy a license. “You could tell if someone was engaged in the business of selling firearms by looking at a simple sequence of sales,” says William J. Vizzard, a former ATF agent and now a professor of criminal justice at California State University, Sacramento. But the new law exempted “collectors,” people engaged in “occasional sales” and those selling guns from a “personal collection” regardless of its size, all of which greatly expanded the universe of unlicensed sellers.  After FOPA, Vizzard says, “we’d arrest a guy with hundreds of guns, all with price tags on them, and he’d say they were part of his collection, and the tags were to let his family know what they were worth in case he died.” Vizzard says the law should define a dealer based on the number of guns he sells.

Richard Feldman, a former NRA lobbyist and president of a gun-rights group called the Independent Firearm Owners Association, insists that the gun show loophole could be closed at little cost by requiring show operators — rather than individual dealers — to conduct NICS checks on all gun sales. Alternatively, unlicensed dealers might be required to run their checks through licensed dealers, for a small fee. That would eliminate the incentive criminals have to buy from unlicensed gun show dealers.  

The current system of background checks is also hampered by ongoing problems with data collection. Missing from the NICS system are millions of state and federal records that would disqualify prospective buyers — including mental health and drug abuse records, and case histories of accused felons. A report by the Government Accountability Office found that 17 states have provided fewer than 10 mental health records to the database. As a result, thousands of prohibited buyers slip through the cracks every year. In 2010, about 3,000 such cases were identified. The president’s gun violence plan calls for additional funding to help states compile mental health and other records and get them into the system.

No cross-checks: The 24-hour rule

The absence of background checks for potentially millions of gun sales each year means that an ATF agent trying to trace a gun picked up at the scene of a homicide may find no paper trail.  If he’s lucky, a dealer will identify the first buyer. But 85 percent of traced crime guns had changed hands at least once before being recovered by law enforcement, and none of those secondary buyers were run through the NICS system.  

The investigative challenges are further complicated by a series of riders authored by then-Rep. Todd Tiahrt, R-Kan., in 2003 in collaboration with the NRA. One of the “Tiahrt amendments,” as they’re known, requires the FBI to destroy information contained in Brady or NICS checks within 24 hours. When a felon purchases a gun, he commits a new felony. But the FBI now has only 24 hours to figure that out. In effect, the FBI is required to destroy evidence of a crime. “Obviously, bringing the record retention down to 24 hours would preclude any significant investigation,” says Julius Wachtel, a retired ATF agent with 20 years of service. “One might as well not even bother.”

According to the NRA, the rider “protects the privacy of law-abiding gun buyers.”  

ATF handgun traces demonstrate that 20 percent of handguns collected from crime scenes were initially part of large-scale purchases of multiple firearms. That’s why the Brady law included a provision requiring that dealers who sell more than one handgun to any single individual within a five-day period file a special report with the ATF and the local police. ATF agents say these multiple sales reports are one of the most valuable tools for identifying gun traffickers. But traffickers can easily evade this reporting requirement and assemble their arsenals without being detected by purchasing a single handgun from multiple dealers over a period of several days, weeks or months. A straw buyer can pass 100 Brady checks.  And because the NICS database cannot retain that information for more than 24 hours, it’s impossible to detect that he or she has made multiple purchases.

Although the Brady law did not require multiple sales reports for long guns, including the military-style assault rifles favored by Mexican drug cartels, President Obama has tried to crack down on traffickers in those weapons. In 2011 the Justice Department issued a rule requiring gun dealers in four Southwest border states to file multiple sale reports for rifles of larger than .22-caliber. The NRA and the Newtown, Connecticut-based National Shooting Sports Foundation (NSSF) immediately went to court to stop its enforcement. Cox, the NRA lobbyist, said the rule “will only divert scarce law enforcement resources from legitimate criminal investigations and squander them on policing law-abiding retailers.” But Peter Forcelli, an ATF supervisory special agent, called the long-gun rule a “huge tool” that “gives us a head start to investigate potentially unlawful sales.” During the first eight months of the program, ATF initiated 120 investigations based on multiple long-gun sale reports and recommended prosecution of more than 100 defendants in 25 separate cases. Two federal district courts turned down the NRA/NSSF challenge, which is now before the U.S. Court of Appeals in Washington, D.C.

No dealer inventories

Yet another Tiahrt amendment bars the ATF from forcing gun dealers to conduct annual inventories of their firearms, which the NRA’s Cox describes as a “laborious and time-consuming process” and “generally unnecessary.” In fact, unlike automobile dealers who have a pretty good idea when a car is missing from the lot, gun dealers seem to lose track of firearms all the time. In 2010, ATF inspections of less than 10 percent of firearms licensees identified more than 31,000 missing weapons. Unlike gun dealers, explosives dealers, also regulated by ATF, are required to keep annual inventories.

Yet lost and stolen firearms account for a huge percentage of the guns that turn up at crime scenes. Between 2005 and 2010, the Justice Department reported 1.4 million guns stolen. More than 80 percent were never recovered. Although licensed dealers are required to report stolen weapons, there is no similar requirement for individuals, although numerous cities and towns — 30 in Pennsylvania alone — have enacted laws that require such reporting within 24 to 48 hours. The International Association of Chiefs of Police supports these laws, arguing that quick reporting of stolen guns makes it far easier to track down thieves, traffickers and straw purchasers.  The NRA opposes lost and stolen reporting laws.  An NRA challenge to a Pittsburgh law was turned down in 2010.

For ATF investigators, a large number of lost or stolen firearms from a particular dealer can be a red flag that the dealer may be selling to criminals.  An ATF study in 2000 found that more than 57 percent of crime gun traces in 1998 came from just 1.2 percent of gun dealers. The Washington, D.C.-area snipers, who murdered 10 people in the course of a three week shooting spree in 2002, obtained their assault rifle from a Tacoma, Washington, dealer with a long history of “missing” firearms.

Limits on dealer inspections and penalties

Corrupt dealers will often claim that a firearm that turned up at a crime scene was lost or stolen. Absent annual inventories, ATF must rely on on-site inspections to ascertain whether a dealer has accounted for every firearm he has bought or sold. That was made more difficult by the 1986 Firearm Owners’ Protection Act, which limits ATF to a single dealer inspection per year, regardless of that dealer’s track record. ATF officially claims to have 776 "inspectors" to examine 60,000 FFLs. But as spokeswoman Ginger Colbrun explained, only about 600 officers actually conduct inspections while the remainder are administrators. In addition, those 600 officers are responsible not only for inspecting active gun dealers but explosives dealers and prospective dealers.  In 2011, less than half of the inspections conducted by those 600 officers were of active retail and wholesale gun sellers.  "We do the best job that we can and visit as many dealers as possible," Colbrun said, "but with the resources we have we're not going to get to every dealer every year."

 In January, the agency made a presentation at the "SHOT" firearms exhibition in Las Vegas which singled out dealer inspections as a major priority and "risk assessment tool," and specifically noted that some FFLs are not inspected "for more than 5 years."  An ATF official said they are currently trying to visit each dealer at least once every five years.

The NRA has complained for years that dealer inspections are a nuisance and has accused ATF of harassing honest gun dealers and revoking licenses “for insignificant technical violations.”  But Andrew Molchan, the director of the 4,000 dealer National Association of Federally Licensed Gun Dealers,  maintains that dealer relations with ATF have been “better in recent years.”  “We don’t have the kind of ridiculous problems there used to be a lot of,” he says. That doesn’t mean dealers are happy when ATF agents pay a visit. Last year, Indiana gun dealer Charles Ludington received a four-year prison sentence after pleading guilty to selling guns to a convicted felon. Ludington came under suspicion during a routine ATF audit in which he was unable to account for 997 firearms. Investigators also found 93 guns that had not been logged in as inventory, another signature of illegal sales.

Even with inspections, closing down corrupt dealers for record violations is extremely difficult. That’s due in part to another Firearm Owners’ Protection Act provision which reduced the penalties for record keeping violations. “Even when you find blatant violations of records laws, you can no longer charge a felony,” says former ATF agent Vizzard. “And most U.S. attorneys are much too busy to be charging misdemeanors.” In 2010, the ATF inspected more than 10,500 dealers and found reporting violations had been committed by half of them. Yet only 71 dealers had their licenses revoked or were denied a renewal. Revocations can take years because of due process requirements, and dealers can remain open while they challenge revocations in the courts (see sidebar).  

Restrictions on use of gun trace data

The Tiahrt amendments also barred the use of ATF trace data in administrative proceedings such as those to revoke a dealer’s license. John Feinblatt, chief policy adviser to New York City Mayor Michael Bloomberg, said trace data is extremely useful in establishing “whether a dealer has broken the law,” and that barring its use in revocation hearings is “like having a law that says you can’t introduce DNA evidence in a rape case.” Under Tiahrt most trace data is also off limits to journalists and scholars. “You’re trying to detect a pattern,” says former ATF agent Vince. “And the idea is, let’s keep the truth and the facts from really coming out so the public can’t see what’s really going on.” In a recent report, Mayors Against Illegal Guns charged the gun lobby with “blindfolding law enforcement” by limiting access to trace data.

Several Tiahrt restrictions have been removed from the law in recent years. These include a provision that prevented state and local police from analyzing gun trafficking patterns and another that prevented law enforcement agencies from sharing ATF trace data. During his 16 years in the House, Tiahrt received $77,350 from the NRA, according to the Center for Responsive Politics. He chose to run for Senate in 2010, but was defeated in a primary.

Statutes and punishments          

Legal experts and former ATF officials have long argued that the legal tools available to the agency are weak —for instance, there is no comprehensive federal firearms trafficking statute. As a result, “ATF must use a wide variety of other statutes to combat firearms trafficking,” said the Nov. 2010 Justice IG report. “However, cases brought under these statutes are difficult to prove and do not carry stringent penalties —particularly for straw purchasers of guns.”

The president’s plan to reduce gun violence recognizes that “there is no explicit law against straw purchasing, so straw purchasers and others who traffic guns can often only be prosecuted for paperwork violations.” The president has called on Congress to pass new gun trafficking laws with serious penalties —a bipartisan quartet of House members proposed such legislation last week —but the prospects for passage are far from clear, given the politics.

And so ATF agents are left with those paperwork violations. And since those don’t draw heavy sentences, the IG reported, U.S. attorneys “are less likely to accept and prosecute” these cases. A Justice Department review of straw buyer sentences between 2004 and 2009 found that they averaged only 12 months. Following complaints from several U.S. attorneys in 2011, the U.S. Sentencing Commission approved guidelines that allow judges to increase sentences for straw purchases by up to five years.

US attorneys also told the IG there were insufficient investigative and prosecutorial resources for gun trafficking cases, while ATF agents reported that they didn’t refer cases “that they assume would be rejected” by prosecutors.             

ATF’s future

A White House statement on the president’s gun violence proposals says there “is no excuse for leaving the key agency enforcing gun laws in America without a leader.” Despite the burgeoning controversy over his nomination, perhaps Jones, a former Marine, will get the chance to convince the Senate that he is the right man for the job. But even with a full-time director, it is not at all clear that the ATF is up to the task of enforcing America’s gun laws — or that the agency has the tools to do so.

The NRA view is that more than enough laws are already on the books. In his post-Newtown speech, Executive VP LaPierre insisted that fully 20,000 gun laws “have failed” to protect us. And he claimed that “government has failed in enforcing...our laws against violent criminals with guns.”

Even with all its limitations, the ATF is not exactly a paper tiger. ATF investigations helped win more than 68,000 convictions between 2005 and 2010, sending more than 55,000 criminals to prison for an average of 15 years each.

Still, retired ATF agent Wachtel says federal gun laws are “toothless” and that “corrupt licensees and traffickers have little fear of discovery or meaningful punishment.” Wachtel calls U.S. gun laws “an illusion” designed to reassure the public that “we can really keep guns from falling into the wrong hands if we just check people’s records,” while at the same time “telling the industry we’re going to help you sell as many guns as you possibly can.”  

In a report issued shortly before the president announced his gun plan, the Center for American Progress, a liberal advocacy group, called the ATF a “beleaguered agency that is unable to adequately fulfill its mission” and said it is “simply incapable of functioning properly as a standalone agency in its current state.” The Center called on the White House to make the ATF a unit of the FBI. “What we want,” said Winnie Stachelberg, executive vice president for external affairs and a co-author of the report, “is to see ATF moved ... to an agency that can work in the way it needs to, to reduce gun violence.” 

But despite the post-Newtown atmosphere, dramatic change at ATF seems highly unlikely. When Presidents Reagan and Clinton threatened to send ATF’s functions to the FBI and Secret Service, both ATF defenders and the NRA moved decisively to prevent that from happening. President Obama has so far opted not to re-fight that battle. And it's not clear that Congress is seriously interested in giving ATF the resources and power it needs to identify and arrest gun criminals. Absent major new developments, that leaves ATF in the same handicapped state it’s been in for years. And that seems to be just the way a lot of people like it.

When Air Force Capt. Jeff Haney’s F-22 fighter crashed in Nov. 2010, while he was gasping for oxygen in the cockpit, the Air Force surprisingly blamed it on him – not the plane.

In a controversial Accident Investigation Board report released a year after the accident, Air Force officials cited three “human factors” as causing the crash: Haney’s “channelized attention” to restoring air flow to his oxygen mask; his failure to keep an eye on his instruments and surroundings; and his “unrecognized spatial disorientation” while plummeting to earth.

The Air Force’s critics, as well as Haney’s family, immediately alleged that the service had sacrificed the reputation of one of its pilots to hide a defect in the $412 million advanced fighter jets so it could preserve political and financial support for them. The Air Force denied it. But now the critics suddenly have some new ammunition.

In a report released Feb. 6, the Department of Defense’s Deputy Inspector General Randolph R. Stone accused the Air Force of conducting a sloppy, inadequate probe of Haney’s deadly crash in the wintry Alaska wilderness.

Stone wrote that the Air Force’s conclusions were “not supported by the facts” presented and didn’t exhaust all investigative leads. He said the three human factors cited by the board were “separate, distinct and conflicting,” and concluded that the Air Force did not explain how they all could have worked together to cause the crash.

The report’s errors and omissions called into question the Air Force board’s conclusions, Stone and his colleagues said. The Air Force, in its response, conceded its account of the accident “could have been more clearly written,” but insisted that findings were supported by clear and convincing evidence and that the board had exhausted all available investigative leads.

The auditors said they weren’t buying it, however, partly because they found the board had failed to analyze how factors such as hypoxia, loss of consciousness due to high g-forces and sudden incapacitation may have affected the pilot. Neither did the board adequately explain how it decided Haney’s mask was in the full-up position as the plane sank – a conclusion that ruled out several other areas of investigation, including the possibility that Haney had removed his mask because the oxygen flow was too weak.

The accident occurred on a flight out of Joint Base Elmendorf-Richardson near Anchorage. The Air Force board said that Haney failed to pull out of a dive, causing him to slam into the ground near a stream in the Talkeetna Mountains. Haney’s widow, Anna Haney, alleged to the contrary that the plane was “dangerous and defective” in a lawsuit against the plane’s builders, Lockheed Martin, Boeing Co., Honeywell and Pratt & Whitney. She reached a confidential settlement with the contractors last year, according to the Air Force Times.

The crash focused new concerns on the oxygen systems originally installed in the Air Force’s state-of-the-art F-22’s, which have been criticized by some as models of costly, goldplated weapons systems that are hard to maintain and ill-suited to fulfill present-day needs.

The Obama administration decided to stop buying the planes in 2009, but at the time of the accident, the plane’s advocates were trying to keep open the option of restarting its assembly line. “The Air Force has always circled the wagons around that airplane,” said Winslow Wheeler, director of the Straus Military Reform Project at the nonprofit watchdog group, Project on Government Oversight.

Two pilots appeared on the CBS television network’s “60 Minutes” program last year saying they had suffered hypoxia, or oxygen deprivation, during flights and as a result they had taken out extra life insurance.

A Nov. 2012 report by the Congressional Research Service report states that the Air Force has records of at least 25 incidents where F-22 pilots reported hypoxia-like symptoms in flight, possibly due to oxygen deprivation. Hypoxia can cause nausea, headaches, fatigue or blackouts.

As the Center for Public Integrity has previously reported, the aircraft’s problems with its oxygen system are not the only ones it has faced. Since the first F-22 rolled off the assembly line in 2003, it has suffered at least six accidents costing over $1 million each while experiencing mechanical breakdowns that could require another decade of redesign and repairs.

On its first overseas deployment, for example, a squad of F-22’s lost all their computer systems in flight and had to be led back to base by mid-air tankers, a retired Air Force general said. The fleet was grounded in 2010 because of rusted ejection-seat parts. The planes were grounded again in 2011 following complaints about the oxygen system and Haney’s fatal crash.

For its part, the Air Force has promised to give the Inspector General’s office a more detailed analysis of the “non-causal” factors, such as hypoxia, and details of how it reached its conclusions regarding the emergency oxygen activation system and blood oxygen levels. The inspector general’s office asked that the work be done by the end of this month.

A new federal advisory panel report makes a forceful case for more research into environmental causes of breast cancer, which was diagnosed in 227,000 women, killed 40,000 and cost more than $17 billion to treat in the United States last year.

Compiled by the congressionally mandated Interagency Breast Cancer and Environmental Research Coordinating Committee, the report notes that most cases of breast cancer “occur in people with no family history,” suggesting that “environmental factors — broadly defined — must play a major role in the etiology of the disease.”

Yet only a fraction of federal research funding has gone toward examining links between breast cancer and ubiquitous chemicals such as the plastic hardening agent bisphenol A; the herbicide atrazine; and dioxin, a byproduct of plastics manufacturing and burning, says the report, prepared for Health and Human Services Secretary Kathleen Sebelius and released today.

“Prevention needs to be as important as other investments that are made in screening, treatment and access to care,” Jeanne Rizzo, co-chair of the committee and president of the San Francisco-based Breast Cancer Fund, said in an interview. “There really is a problem, and until we address it we’re going to continue to have a quarter of a million new cases every year.”

The report’s release comes three months after a Center for Public Integrity article detailing a study of female plastic automotive parts workers in Windsor, Ontario. That study found that women employed in the chemical-intensive industry were nearly five times as likely to develop breast cancer, prior to menopause, as women in a control group.

“That was essentially an uncontrolled human study,” Rizzo said of the Windsor workers. “We can’t do that. We need to learn from animal studies.”

Asked to comment Monday, a spokesman for the Department of Health and Human Services said, “We look forward to reviewing the report.”

At least 216 chemicals, including endocrine-disrupting substances like bisphenol A, have been associated with mammary gland tumors in animals. Endocrine-disrupting chemicals, or EDCs, are used to make plastics and pesticides and found in products such as furniture, metal food cans and cosmetics.

“National survey data show that many of these chemicals are present in the blood or urine of children and adults in the United States,” the committee’s report says, “and some EDCs are present in 100 percent of the people sampled.” Exposure to such compounds early in life can be especially dangerous, the report says

All told, some 84,000 chemicals are registered for use in the United States. But complete toxicological screening data are available for only 7 percent of these substances, says the report, which calls for “enhanced testing of chemicals, especially classes of chemicals combined together as a mixture, for effects on the mammary gland and breast …”

Environmental exposures, moreover, have gotten relatively little attention from researchers.

The National Institutes of Health spent almost $2.4 billion on 2,910 breast cancer research projects from fiscal year 2008 through fiscal year 2010, the report says. But only about 27 percent of these projects had to do with prevention, and just 10 percent could be considered “environmental health research.”

Of the $2.8 billion appropriated by Congress from 1992 through 2012 for the Department of Defense Breast Cancer Research Program, 75 percent went toward “basic biology and treatment research, with only 3 percent for prevention and cancer control projects,” the report says.

The committee recommends that researchers prioritize “chemicals that are produced in high volumes for which there is biologically plausible evidence of their role in the development of breast cancer.”

It also suggests that regulators improve oversight of “cosmetics and personal care products as well as household cleaning and food containment products,” and step up environmental monitoring, especially of “underserved and under-researched groups as well as ‘fenceline’ communities that are in close proximity to industry or waste sites.”

Spokespeople for the Environmental Protection Agency and the American Chemistry Council, the chemical industry’s main trade association, did not respond to requests for comment Monday.

Harvard University law professor Lawrence Lessig* and his campaign finance reform organization, Rootstrikers, are today calling on Federal Election Commission Chairwoman Ellen Weintraub to conduct a public hearing on super PAC regulation.

Rootstrikers says the request, and related petition, were prompted by a Center for Public Integrity article Saturday by Michael Beckel that quotes Weintraub as saying super PACs that support a single candidate may have more of a corrupting influence on the political process than super PACs that support multiple candidates.

"I would probably define corruption a little more broadly than the Supreme Court does,"  Weintraub said at a forum Friday at Willamette University in Salem, Oregon.

The high court considers spending by outside groups, independent of candidates, to be less of a corruption risk than unregulated direct contributions to candidates.

In his letter to Weintraub, a Democratic appointee, Lessig tells her that she "gave this country some much needed hope" with her comments, but added that "hope is not enough."

Lessig is also calling on the commission to consider issues such as whether super PACs may be run by a supported candidates' former staffers or family members and whether candidates may raise funds on behalf of a super PAC.

Read the full letter here.

(Update: 3:34 p.m.) Weintraub tells the Center she'd "be happy to hold a hearing" on super PACs. She wouldn't speculate on the timing of such a hearing, but said sooner would be better.

And while a hearing might help the often fractious FEC institute rulemaking surrounding the Supreme Court's 2010 Citizens United decision and the subsequent federal SpeechNow.org decision, Weintraub said campaign reformers' expectations should be reasonable.

"I am bound by what the Supreme Court said. I'm not in a position to disregard the Supreme Court — I'm well aware of my place in this universe," she said. "But we are better informed now about how [super PACs] work than even the courts were when they ruled."

The issue of single-candidate super PACs in particular is "a topic that really deserves our consideration" as far as potential FEC rulemaking is concerned, Weintraub added.

*The Center for Public Integrity receives funding through an arrangement with Harvard University, facilitated by Lessig.

President Barack Obama's new nonprofit advocacy group, Organizing for Action, is using tonight's State of the Union address as a  fundraising opportunity. The group is emailing supporters asking them to register for a "special online call" following the speech before a joint session of Congress.

Upon registering your name, email address and ZIP code, you are immediately directed to an online form soliciting a donation to the organization, which describes its overarching mission as "achieving enactment of the national agenda Americans voted for on Election Day 2012."

The Democratic National Committee also blasted out an email this evening inviting supporters to watch the State of the Union address on its website.

Immediately after Executive Director Patrick Gaspard's signature? A large, red button with white letters reading "DONATE."

The GOP fundraising machine, meanwhile, is hardly idle.

Republican National Committee Chief of Staff Jeff Larson tonight emailed supporters with graphics depicting national economic conditions.

"Take a look at the real state of the union below and contribute today," he wrote, with the words "contribute today" linked to an online donation form.

Sen. Jerry Moran, R-Ky., chairman of the National Republican Senatorial Committee, predicted that Sen. Marco Rubio, R-Fla., would deliver a State of the Union rebuttal speech that would "articulate our message of opportunity, growth and security for every American."

Then Moran made his political fundraising pitch: "That is why I hope you will help add to this momentum for 2014 by giving one special donation of $25, $50 or $100 to the NRSC so we can elect more Republican Senators. Your gift will help us recruit strong candidates for the 2014 elections."

In 2007, when Deborah Rice was appointed chair of an Environmental Protection Agency panel assessing the safety levels of flame retardants, she arrived as a respected Maine toxicologist with no ties to industry.

Yet the EPA removed Rice from the panel after an intense push by the American Chemistry Council (ACC), an industry lobbying group that accused her of bias. Her supposed conflict of interest? She had publicly raised questions about the safety of a flame retardant under EPA review.

Rice’s travails through the EPA’s Integrated Risk Information System, or IRIS, program reveal the flip side of industry’s sway. Not only does the ACC back many scientists named to IRIS panels, it also has the power to help remove ones it doesn’t favor.

The ruckus over the Maine scientist surfaced six years ago, but its lesson echoes today.

To Rice, her removal points up an irony borne out by a Center for Public Integrity investigation: Scientists with deep ties to industry are allowed to continue on IRIS panels. But she — with no financial link to industry — was booted.

“It wasn’t like I was a consultant, saying this stuff is really bad because someone is paying me to do it. I was the toxicologist working for the state of Maine asked by my department to do these reviews,” she said. “That was the basis on which they said I was in conflict.”

Another irony: Rice’s assessment was on target. Two years later, the EPA moved to cease production of decaBDE, a chemical it views as a possible carcinogen. In Maine, Rice’s research had supported a state ban on the chemical.

Rice was with the Maine Center for Disease Control and Prevention when she was appointed to the EPA panel convened to study the safety of brominated flame retardants used in products ranging from building materials to electronics and plastics. The panel was tasked to assess the safe reference doses of four forms of polybrominated diphenyl ethers (PBDEs) — including decaBDE, which Rice had studied for several years in Maine.

A former EPA toxicologist, Rice had been honored by the agency in 2004 for outstanding scientific work.

Her undoing came after she made public comments about a compound that was under EPA review.

Before her appointment to the IRIS panel, Rice, like other members, was asked whether she had taken public positions on the chemicals being studied. She answered “No” — but reported that in 2004 and 2005, as a toxicologist for the Maine CDC, she had written a review of the health effects of PBDEs.

With the IRIS panel due to convene Feb. 22, 2007, members were asked on Feb. 16 if any of their information had changed. “No changes,” Rice reported.

A day earlier in Maine, Rice had testified before the Legislature supporting a ban of decaBDE. “Deborah Rice with the Maine CDC’s Environmental and Occupational Health Program told lawmakers there is no question in her mind that deca should be eliminated because it is a persistent toxin that accumulates in the food chain,” the Bangor Daily News reported.

The ACC seized on those public statements and, in May 2007, dispatched a 10-page letter to the EPA urging that she be stricken from the panel. The chemistry council cited “certain information that has come to light that could suggest the potential for bias exists on the part of the Peer Review Chairperson.”

The ACC cited her comments in Maine and in articles she had written. “Thus, EPA staff had to know or should have known that the Chairperson has been a fervent advocate of banning deca-BDE — the very sort of policy predisposition that has no place in an independent, objective peer review,” wrote an ACC vice president.

Rice’s inclusion on the panel, the ACC said, “ultimately calls into question the overall integrity of the entire IRIS database.”

An EPA official met with the ACC that June. In the end, the agency sided with industry, concluding that Rice’s statements created a “perception of bias.” Reviewers found, however, that her comments did not influence others — “because her comments were echoed by the other panelists.”

In August 2007, the EPA deleted Rice’s comments from its website. A day later, an IRIS official called Rice to tell her the news.

The EPA site today says: “The final report includes only four of the five reviewers’ comments. One reviewer’s comments were excluded from the report and were not considered by EPA due to the perception of a potential conflict of interest.”

Rice had already completed her IRIS service when the EPA took its action. She said she was simply reporting her findings as a toxicologist and had no conflict. “All of a sudden my comments disappeared as if I had never been part of this panel,” she said.

Rice wonders whether industry targeted her as part of a larger plan to discredit attempts to ban deca. At the time, several states were raising concerns over the retardant’s safety. The EPA itself had raised concerns — ones so significant that in late 2009 the agency and several chemical companies agreed to phase out its production.

“I think the motivation just has been to discredit me personally,” Rice surmised. “To say, ‘She’s biased, she has a conflict, she’s discredited. These other states shouldn’t pay attention to what Maine has done.’ And it seemed to me they saw a good opportunity to do this.”

The ACC said it sought Rice’s removal to ensure the peer review was independent.

Her ouster triggered a dustup. Groups ranging from the Environmental Working Group to the Center for Science in the Public Interest chastised the EPA for removing Rice while, in other cases, keeping panelists with ties to industry. “The actions taken by EPA against Dr. Rice call into question the credibility of EPA management,” the groups wrote in 2008, urging the EPA to reinstate Rice as panel chair. “When it allows itself to serve the interests of the polluting industries that it is charged with regulating, it has perverted its mission.”

Rep. John Dingell, D-Mich., then-chairman of the Energy and Commerce Committee, pressed the chemistry council to explain why panelists with industry ties “have not been targeted by the ACC as also having conflicts of interest that would disqualify them from serving on EPA panels.”

The EPA’s Office of Inspector General investigated, and found no wrongdoing in the agency’s actions. “We conclude that EPA did not violate existing federal law, regulations, guidance or other relevant requirements in its actions,” an IG official wrote in January 2009.

Still, the removal of Rice shone a light on the system — for a time. The EPA “kind of promised to clean things up,” said Rice, who recently retired. “Once the spotlight shifts to something else, it’s business as usual.”

In September 2010, scientists at the Environmental Protection Agency came to a startling conclusion: Even a small amount of a chemical compound commonly found in tap water may cause cancer.

The compound, hexavalent chromium, gained infamy in the Oscar-winning film Erin Brockovich, based on the David-vs.-Goliath legal duel between desert dwellers in Hinkley, Calif., and Pacific Gas & Electric Co. The film ends in Hollywood fashion, with the corporate polluter paying $333 million to people suffering from illnesses.

But in real life, the drama continues. More than 70 million Americans drink traces of chromium every day, according to the Environmental Working Group, a nonprofit research organization.

And now, more than a decade after the film, EPA scientists cite “clear evidence” that the chemical compound, also known as chromium (VI), can cause cancer. The federal agency was poised to announce its findings in 2011, a step almost certain to trigger stricter drinking-water standards to prevent new cancers and deaths.

The chemical industry’s trade association and chief lobbyist, the American Chemistry Council, urged the EPA to wait for more research, a common practice to delay action on toxic chemicals. However, Vincent Cogliano, the soft-spoken head of EPA’s chemical-assessment program, rebuffed the powerful group, writing in an April 2011 letter that “strong” new research was already available.

Ten months later, the EPA reversed itself, quietly posting a notice on the Internet that it was pushing back the release of its findings for at least four more years. Environmentalists were stunned at the reason: The agency would wait for the results of new studies costing $4 million and paid for by the American Chemistry Council.

The EPA decided to wait at the urging of a panel of scientists chosen to give an unbiased review of the chromium findings. But the EPA doesn’t vet these scientists directly, instead handing the task over to outside contractors. An investigation by the Center for Public Integrity found that several of the panelists had worked on behalf of PG&E to defend the company in the Brockovich lawsuits.

President Obama pledged during his 2008 campaign to halt meddling and interference in government science. The president put restoring integrity to science on his short list of priorities in his first inaugural address, right after fixing the economy and before health care reform. “We'll restore science to its rightful place,” he said.

The story of chromium (VI), full of twists and turns, offers a case study in how the Obama administration has failed to shield science at the EPA from industry influence.

Companies with a stake in chromium have borrowed from the Big Tobacco playbook, using science to create doubt. Ever since the brassy Brockovich knocked on doors in Hinkley to organize a class-action lawsuit, scientists paid by industry have tried to convince the courts and regulators that chromium (VI) poses no health risk.

Some of those scientists ended up on the panel chosen to review the EPA’s chromium findings, the Center for Public Integrity found:

• Three of the five panelists who urged delay had worked on industry's behalf in the Hinkley court cases.

• One of those scientists was retained by PG&E in the company’s ongoing chromium cleanup in Hinkley at the same time he was serving on the EPA panel.

• Another scientist who urged the EPA to wait for the American Chemistry Council studies served as a consultant on those studies.

“You don’t have to be a rocket scientist to realize that this is corrupt and unacceptable,” contends Rena Steinzor, a law professor at the University of Maryland and president of the Center for Progressive Reform, a think tank that recently published a report on the chemical industry’s influence.

Those members served on the EPA’s toxic-chemical-assessment program, the Integrated Risk Information System. IRIS, as it is known, is the pure science upon which clean air and water rules are based. But IRIS has become a major bottleneck, delaying new federal and state air and water standards amid industry influence and other factors. Critics say the EPA has only itself to blame.

Since October, EPA Administrator Lisa Jackson has declined interview requests to discuss IRIS or loopholes that open the door for potential conflicts of interest. Yet Jackson is pushing reform before she leaves office this week that would address some of the conflicts unearthed in the Center’s review, and cited by environmental activists.

And recently the EPA decided to move up its timetable to complete its chromium assessment to later this year.

Case study of industry’s muscle

The issue of scientists with industry ties serving on special EPA peer review panels goes beyond chromium. One out of every six scientists appointed to such panels since Obama took office had been a primary author of research articles funded by the American Chemistry Council over the past dozen years.

In all, 11 of the 68 members appointed to EPA panels assessing chemical health hazards were significant authors on studies funded by the ACC, a review of the council’s research database reveals. That number does not capture all scientists backed by industry, just those with work funded by the ACC. The authors of the hexavalent chromium studies, for example, are not included.

One scientist who has served on several EPA panels and co-written more than a dozen ACC-funded studies said that working with industry does not necessarily suggest a conflict.

“Scientists by and large want to get at the truth, so this really becomes more a matter of a perception of a problem than a real problem, in my opinion,” said Frederick J. Miller, an independent consultant who once worked at the Hamner Institutes for Health Sciences, a North Carolina research institute formed in the 1970s by leaders from 11 major chemical companies.

“The people that serve on these panels … know if somebody is trying to make an argument that doesn’t hold water,” said Miller, who began his career in government.

However, studies have shown that when industry pays for research, it may influence the outcome. A 1998 analysis  of more than 100 articles published on secondhand smoke reported that 37 percent found no health risk. At least 74 percent of the articles exonerating cigarette smoke were written by scientists with ties to the tobacco industry.

The American Chemistry Council has a stake in the outcome of research. Lobby disclosure forms from 2011 reveal that the ACC lobbied the EPA on its assessments of three highly controversial chemicals: dioxin, formaldehyde and chromium (VI). The group boasts on its Web site that “in 2012, we helped defeat or amend 281 chemical regulation and product ban proposals.”

The ACC, whose members such as ExxonMobil, Dow Chemical, Merck and Procter & Gamble are a who’s who of the Fortune 500, is one of the freest-spending lobby groups on Capitol Hill. In 2011, it laid out $12.6 million on lobbying, four times the amount spent by the National Rifle Association.

David Fischer, a senior director at the ACC, defended the group’s research program. “We feel we have an obligation to step up and fund studies to assist the agency — whether it’s EPA or others — to answer questions that might be posed about chemicals that we manufacture,” he said.

Asked if any of the ACC’s studies had ever shown that a chemical was more toxic than previously thought, Fischer replied, “I'm not aware of one right at this moment.”

The ACC said it was not involved in selecting the peer reviewers studying chromium (VI). “EPA's peer reviewers were selected by EPA. They were vetted in the normal peer review process from EPA and we from the ACC do not have any direct links to these people,” said Ann Mason, the ACC scientist who commissioned the group’s new studies on chromium.

However, few scientists in the world specialize in chromium, a compound used to add color to paints, make stainless steel, add finish to chrome and inhibit rust. During its lawsuits, PG&E hired several of these scientists as expert witnesses; some say the debate over the compound’s toxicity caused lasting splits in the tight-knit scientific world.

One of PG&E’s key experts was Steven Patierno, a former professor of pharmacology at the George Washington University School of Medicine and Health Sciences who had conducted numerous studies on the metal. Patierno, now the deputy director of the Duke Cancer Institute, has been an expert defense witness in seven chromium lawsuits. He hasn’t wavered in his view that drinking low doses of chromium (VI) does not cause cancer.

By early 2011, Patierno was selected for the peer review panel critiquing the EPA’s chromium (VI) findings. At a public meeting on May 12, 2011, he revealed a potential conflict of interest. There’s no recording or transcript of the meeting. Nothing in the EPA’s public record reveals the conflict. Two EPA officials who were there say they cannot recall what Patierno said. Patierno himself declined requests for an interview.

Jennifer Sass, a senior scientist at the nonprofit Natural Resources Defense Council, took notes at the meeting and said that Patierno revealed he was an investigator — though not a principal investigator — on the American Chemistry Council studies.

The ACC’s Mason disputes that Patierno was involved. But Travis O’Brien, one of the principal investigators on the studies and a former colleague of Patierno’s at George Washington University, told the Center for Public Integrity that Patierno was a consultant on the research.

Max Costa, now a professor at New York University’s medical school, knows Patierno well. When Costa taught at the University of Texas Medical School, Patierno worked in his laboratory. The two published research together. Costa said they became rivals when they took opposite sides in the PG&E lawsuit.

He argues that Patierno’s opinions are not credible because he works for the chrome industry. “He’s been a paid a large amount of money by them, and he’s totally biased because of that.”

Patierno levels the same charge against Costa, attacking his conclusions in a lawsuit as “unsubstantiated” and “severely flawed.” Patierno criticized  the EPA for even citing Costa’s papers among hundreds of others in its report. In his peer review comments, Patierno said two of Costa’s articles should not be taken seriously because “they were written and published at a time when the senior author was actively engaged as an expert witness for the plaintiffs in high-profile hexavalent chromium lawsuits.”

Patierno was an expert witness for PG&E in the same lawsuits. When he was asked in a 2006 lawsuit if he discloses his expert-witness work for industry when submitting articles on chromium (VI), he answered no. Patierno said his articles were based on laboratory studies that were not relevant to his legal work.

Costa was originally listed as a candidate for the EPA peer review panel, according to documents obtained by the Center through a Freedom of Information Act (FOIA) request. Costa says he disclosed his work in the PG&E lawsuit but doesn’t know if that work disqualified him. An EPA official said privately said that Costa’s work as an expert witness may have kept him off the panel.

Industry ties and EPA panel

Patierno was not the only defense litigation expert who served on the EPA’s IRIS panel. Two others were John P. Wise Sr., a toxicology professor at the University of Southern Maine, and Joshua Hamilton, a chief academic and scientific officer at the Marine Biological Laboratory in Woods Hole, Mass., which is affiliated with Brown University.

Wise, who worked in Patierno’s laboratory as a graduate student, said that in 1997 he worked for a consulting firm and was assigned to do research for an industry client in the Hinkley lawsuit – but that he has not accepted industry money in the past 15 years. Wise added that he was never told the identity of the client and that he does not believe "such limited contact so long ago" influenced his opinion.

Hamilton was a defense expert in a PG&E chromium lawsuit that settled in 2006 and worked for the company as a consultant again starting in 2009, according to PG&E. PG&E acknowledged that it hired  Hamilton in May 2011 — the same month the EPA panel met — to consult on the ongoing chromium cleanup in Hinkley. PG&E said it paid him $110,000.

Hamilton appeared before a California Regional Water Quality Control Board on June 8, 2011, to speak on behalf of PG&E about its cleanup of Hinkley. The EPA peer review panel issued its final comments one month later, on July 6, 2011.

Hamilton’s consulting work included criticism of the California EPA’s own scientific assessment of chromium (VI), which was nearly identical to the EPA’s.

In an eight-page statement to the water board dated July 9, 2011, Hamilton wrote that the state agency’s findings did not represent “established science.” He described California’s regulations as “overly protective.”

The PG&E director in charge of the Hinkley cleanup, Sheryl Bilbrey, said Hamilton’s work should not have affected his objectivity. “PG&E expects all of our experts to give us unbiased advice,” she said. “So we would never ask anyone to change their scientific opinion to fit something that we would want.”

Asked whether it was appropriate for an EPA peer reviewer to be working simultaneously for PG&E, the ACC’s Fischer said, “That sounds like a conflict of interest to me. Generally, the way you get around it is you just — you don’t appoint that particular scientist to that particular panel.”

It was not the first time Hamilton had been paid a substantial sum by PG&E. In 2001, Hamilton said he was surprised to get a $100,000 check in the mail before doing any work as an expert witness. According to his deposition, Hamilton talked to PG&E’s lawyers about the check and learned that it was on top of his hourly fee. PG&E ultimately paid Hamilton nearly $300,000 for his work on the lawsuit.

“That’s completely outrageous,” said Francesca Grifo, director of scientific integrity at the nonprofit Union of Concerned Scientists. “I don’t know how anybody could stand up logically and say I got $100,000 but it didn’t affect how I handled this.”

Hamilton declined interview requests.

EPA farms screening to consultants

Working for a chemical company appears to violate the EPA’s guidelines on conflicts of interest. The EPA’s Peer Review Handbook says peer reviewers should appear to be impartial, defined as not having anything that “may cause a reasonable person with knowledge of the relevant facts to question the expert’s ability to carry out official duties without bias or influence.”

The handbook offers, as an example of a conflict, a scientist paid to be an expert witness for a chemical company in a class-action lawsuit.

Yet, the EPA doesn’t ask scientists if they’ve worked as expert witnesses or have taken money from industry. Instead, it turns that job over to private companies, which handle conflict-of-interest reviews in secret. All of the information the vendors collect, including financial disclosure forms, is “considered private and non-disclosable to EPA or outside entities except as required by law,” the EPA policy says.

The contractor examines candidates’ published work, and prospective panelists fill out a questionnaire detailing potential conflicts. Once the panel is picked, the contractor certifies to the EPA that “no unresolved actual or potential conflict of interest issues” remain.

What’s more, the ethics guidelines are not binding on contractors, and the EPA handbook says the agency should not override decisions on conflicts of interest. “EPA should not attempt to make any changes in the contractor’s conclusions as this would compromise the independence of the peer review conducted by the contractor,” the handbook says.

The EPA said it set the system up this way to ensure impartiality. But, the Center found, this structure helps shield the very conflicts the agency aims to avoid.

A year ago, the Center sought information on the screening of IRIS panelists through a FOIA request. The EPA withheld most documents, including emails between the vendors and agency.

Officials at Eastern Research Group Inc., the Massachusetts firm that vetted the peer reviewers on the chromium (VI) panel, did not return emails and phone calls. An official at another company handling peer reviews, Versar Inc., said he was prohibited by EPA from talking.

The EPA’s administrator, Jackson, and its chemical-assessment officials declined requests for on-the-record interviews. But an EPA official acknowledged privately that the agency was not fully aware of the chromium (VI) peer reviewers’ ties to PG&E. The official defended the use of private vendors, contending that if the EPA chose peer reviewers, it could pick scientists it knew would be friendly.

However, the EPA routinely selects scientists for other advisory panels. Critics said it’s not clear how checking financial disclosure forms would taint the process. The Peer Review Handbook does note that checking disclosure forms would activate the Federal Advisory Committee Act, a law meant to make panels more open.

“It’s bizarre,” Grifo said of the EPA’s secretive screening process. “At its core it’s supposed to increase the public trust in the system. If it looks like the whole system is rigged to begin with, then why should a citizen trust it?”

The EPA said it was working to reduce the potential for conflicts. “We are exploring the best ways to provide for public review of contract-managed peer review panels and ensure that contractors are held accountable for their assessment of any conflicts of interest,” the agency said in a statement.

The ‘pure science’ bottleneck

Some 700 new chemicals hit the market each year, adding to the tens of thousands already in use. Yet the EPA has assessed only 557 chemicals since the IRIS program began in 1985. A typical review takes six to eight years, sometimes much longer. It took 27 years for the agency to issue a partial assessment of dioxin, a byproduct of plastics manufacturing and burning.

The Government Accountability Office (GAO) concluded in 2008 that the IRIS program was so bogged down that it was in danger of becoming obsolete.

In 2009, EPA Administrator Jackson made bold promises within her first weeks in office to fix the program. She pledged to finish many more assessments and to try to complete each one within two years. Since May 2009, the EPA said it completed 24 IRIS assessments, “double the number” completed in the same time period prior to May 2009.

Yet its overall progress remains slow, and in the past two years, the program produced as few assessments as ever. Last year, the EPA planned to complete 40 assessments. It finished three.

The reasons for the logjam are complex. But it has become common for industry and its allies inside the federal government to push for delay. “Even a single delay can have far-reaching, time-consuming consequences, in some cases requiring that the assessment process essentially start over,” the GAO reported.

In the case of chromium (VI), evidence shows that industry worked closely with the EPA as the agency conducted its assessment. On Oct. 8, 2009, a scientist at a law firm representing chemical companies complained in an email that the EPA was pushing ahead on its assessments without waiting for studies to address “gaps” in the science.

“EPA moved Chrom VI up by about two years after ‘we’ entered into a process of planning research with them to address gaps,” wrote Richard Canady, a former scientist at the White House’s Office of Management and Budget (OMB), who was then working at the private law firm of McKenna, Long & Aldridge. “I’d like to make a case for EPA planning ahead in cooperation with industry.”

Canady’s email was sent to Nancy Beck, a toxicologist at OMB who reviewed the EPA’s findings. Beck referred Canady to an American Chemistry Council official for help in gathering data. A 2009 investigation by a subcommittee of the House Science and Technology Committee criticized Beck for improperly interfering with IRIS assessments during the George W. Bush administration. Beck now works for the ACC. She did not return a call last week seeking comment; an ACC spokesman said Tuesday he would seek her perspective.

In a recent interview, Canady said he could not recall the precise details from his email and declined to reveal clients for which he was working. But Canady said he thought the process of planning research with the EPA “wasn’t that formal.” Instead, industry scientists would call EPA scientists to find out what new data would help them in their chromium (VI) assessment, he said.

His 2009 email also said, “Peter made a point to me the other day about how boron and methylene chloride were good examples of working together on developing data ahead of assessments in ways that influenced the outcome.”

Canady said this was a reference to Peter Preuss, then the director of the EPA’s National Center for Environmental Assessment, which oversees IRIS.

The EPA originally planned to issue its chromium (VI) assessment last summer, giving the ACC time to finish its new studies. However, under Jackson’s imperative to quicken assessments, the EPA moved up its timeline by six to nine months.

When the EPA’s Cogliano rebuffed the ACC’s request for a delay, the trade association turned its attention to the peer review panel.

Critics say the industry uses comments on chemicals that are under review to overwhelm the agency.

“There’s a very elaborate process that involves multiple opportunities for industry to pick away and blast away and confuse and overload the staff of IRIS, and the IRIS staff reacts by trying to address each and every one of industry’s concerns,” said law professor Steinzor.

“The chemical industry has made IRIS its leading target, one of its leading targets, for spoil in the current age of greed,” Steinzor said

Of the 49 public comments submitted to the EPA on chromium before the peer-review panel met, the American Chemistry Council and its research partners authored 29 of them, totaling 1,661 pages. In addition, 10 other comments totaling 137 pages came from industry urging the EPA to wait for the ACC studies.

As the EPA stood poised to announce potential new safeguards for chromium (VI), the ACC had hired a scientific consulting firm, ToxStrategies, to manage the $4 million studies of mice and rats given the chemical for 90 days.

The panel met May 12, 2011, at a Hilton hotel near Reagan National Airport. Patierno was highly critical of the EPA’s findings and suggested the agency “absolutely consider the extensive new data being provided.” Hamilton and Wise agreed.

In a recent interview, Wise said he wasn’t entirely familiar with ToxStrategies’ findings, which hadn’t yet been published. But he assumed the delay would be short, only a few months. The EPA initially said the delay would take four years. Later, the agency said the assessment would be done this year.

Anatoly Zhitkovich, a professor at Brown University who chaired the EPA peer review panel, was upset with the results and wrote his own review published in the journal Chemical Research in Toxicology, according to Costa, a close colleague. Zhitkovich declined an interview request, but his article supported the findings of the EPA.

In lobbying for delay, the American Chemistry Council quietly enlisted the help of a small office within the U.S. Small Business Administration.

SBA Chief Counsel for Advocacy Winslow Sargeant, an electrical engineer by training, submitted a comment to the EPA on Oct. 5, 2011, challenging its scientific conclusions and urging it to delay its chromium assessment pending completion of the ACC studies. Winslow cited the peer review comments from Hamilton and Wise to support his argument.

But emails obtained through FOIA by the advocacy group Center for Effective Government revealed that the ACC helped shape the SBA letter. An ACC lobbyist, Randy Schumacher, sent an email to Sargeant’s office on June 28, 2011, asking for its help.

“Administrator Jackson calling upon her to stop the Cr6 risk assessment process to do exactly as EPA’s peer reviewers deemed advisable,” Schumacher wrote. “Since it appears EPA needs to hear from more constituents for it to listen to its own peer review team, would SBA be willing to send a letter to Ms. Jackson to weigh in on this matter?”

Later emails from Schumacher suggested editing changes to Sargeant’s letter. The SBA official has not responded to interview requests.

Frustration prompts reform push

Now the EPA is in the process of revamping its IRIS program once more. Cogliano has proposed releasing the names of prospective peer reviewers in advance, giving the public an opportunity to explore conflicts. “This will improve transparency in the peer review process,” the EPA said in a statement. The changes could be formally announced this week, as Jackson departs.

The ACC’s Fischer says he’s in favor of a conflict-of-interest policy that allows industry to participate on peer review panels. “Bias in and of itself should not necessarily disqualify a particular scientist from serving on the panel,” he said. “Industry perspective is a bias but so [is] every other perspective.”

The EPA is also weighing whether to set “stopping points” for new research, a deadline after which no additional studies would be considered. Kenneth Olden, a senior EPA official who oversees IRIS, has proposed announcing assessments two years in advance, giving industry time to complete new studies.

Such proposals drew criticism at an EPA meeting in November, with an environmental group’s scientist stating bluntly that industry seeks delays because it wants IRIS to fail. His comments drew faint gasps from a conference room filled almost entirely with industry consultants.

“The practice of waiting for one more study to be completed, as has happened repeatedly under IRIS – especially when that study is to be conducted by an entity with a vested financial interest in tilting the outcome – simply must stop,” said the scientist, Richard Denison, with the nonprofit Environmental Defense Fund. “Simply put, a decision delayed is health protection denied.”

This story has been clarified to reflect that, as an employee of a consulting firm, John P. Wise Sr. worked for an industry client in the PG&E lawsuit but that he was never told the identity of the client.

President Obama put a rosy spin on several accomplishments of his administration in his 2013 State of the Union address.

• The president claimed that “both parties have worked together to reduce the deficit by more than $2.5 trillion.” But that’s only an estimate of deficit reduction through fiscal year 2022, and it would be lower if the White House used a different starting point.

• Obama touted the growth of 500,000 manufacturing jobs over the past three years, but there has been a net loss of 600,000 manufacturing jobs since he took office. The recent growth also has stalled since July 2012.

• He claimed that “we have doubled the distance our cars will go on a gallon of gas.” Actual mileage is improving, but Obama’s “doubled” claim refers to a desired miles-per-gallon average for model year 2025.

• Obama said the Affordable Care Act “is helping to slow the growth of health care costs.” It may be helping, but the slower growth for health care spending began in 2009, before the law was enacted, and is due at least partly to the down economy.

The president also made an exaggerated claim of bipartisanship. He said that Republican presidential candidate Mitt Romney agreed with him that the minimum wage should be tied to the cost of living. But Romney backed off that view during the campaign.

Analysis

President Barack Obama gave his State of the Union address to Congress Feb. 12, laying out his legislative agenda for the coming year and achievements of his time in office. But Obama puffed up his record.

Deficit Reduction

Obama said the administration and Congress “have worked together to reduce the deficit by more than $2.5 trillion.” A bipartisan group called the estimate “very reasonable.” But it is only an estimate — and a debatable one at that — for deficit reduction from budgets through fiscal year 2022. Exactly how much will be cut will be up to future Congresses.

And, even if Congress meets those deficit-reduction goals, deficit spending will continue and the federal debt will grow larger — unless much more is done.

Obama: Over the last few years, both parties have worked together to reduce the deficit by more than $2.5 trillion — mostly through spending cuts, but also by raising tax rates on the wealthiest 1 percent of Americans. As a result, we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.

Obama has cited the $2.5 trillion figure on numerous occasions, including at a Jan. 14 news conference. It is based largely on two pieces of legislation: the Budget Control Act of 2011, which placed caps on discretionary spending beginning in 2012, and the American Taxpayer Relief Act of 2012, which prevented tax hikes on most Americans in 2013 but allowed rates to go up on the top 1 percent of taxpayers. There was some additional savings from reductions in discretionary spending in the fiscal 2011 appropriations bills.

Republicans challenge the $2.5 trillion figure with some justification, because the amount of savings depends heavily on the baseline — that is, the starting point of comparison. The White House told us it used the Office of Management and Budget’s January 2011 baseline.

In a recent report, the bipartisan Committee for a Responsible Federal Budget estimated the deficit reduction at $2.7 trillion, using the nonpartisan Congressional Budget Office’s August 2010 baseline. But it also acknowledged that “there is no simple answer to the question of how much deficit reduction has been enacted so far.” The report says starting a year earlier or later would reduce the estimated savings.

CRFB, Feb. 11: Although $2.7 trillion is a very reasonable estimate of enacted savings, it is by no means the only way to measure past savings. It is worth noting that the discretionary savings in this number are in fact calculated from the high point of discretionary spending. Measuring either from a year later or from a year earlier would result in a smaller savings number because base discretionary spending (excluding the effects of the stimulus) actually increased between 2009 and 2010 due to larger-than-projected appropriations.

As we have written once before, the vast majority of the deficit reduction has yet to materialize. Congress is supposed to comply with the caps on discretionary spending imposed by the Budget Control Act in future appropriations bills. But whether that happens remains to be seen.

And, even if Congress complies, deficit spending will continue, and the federal debt will rise — just not as quickly as it otherwise would have. The latest CBO figures show the public debt — that is, the amount the federal government owes the public — will approach $20 trillion in 2023, an increase of more than $8 trillion from its current level of $11.6 trillion.

For that reason, most budget experts warn that the president understates the scope of the budget problem when he says, as he did in his speech, that “we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.” The nonpartisan Concord Coalition says the president’s goal of accomplishing $4 trillion in deficit reduction “would hardly mean the ‘job is finished.’ ”

The Committee for a Responsible Federal Budget struck the same cautionary note in its report, saying the progress so far is “notable” but enacting $4 trillion in deficit reduction will not stabilize the debt.

CRFB, Feb. 11: Declaring victory with an additional $1.5 trillion would be dangerous, however, since it would leave no margin for error, would result in slower economic growth, would leave little fiscal flexibility, and would have little chance of stabilizing the debt beyond the ten-year window. For these reasons, we believe the debt must be not only stable, but on a clear downward path by the end of the decade.

Manufacturing Jobs

The president was correct when he said U.S. “manufacturers have added about 500,000 jobs over the past three” years, but that’s not the whole story.

Overall, there has been a net loss of more than 600,000 manufacturing jobs since Obama took office in January 2009, and manufacturing job growth during his tenure has stalled since reaching a peak of nearly 12 million jobs in July 2012.

Obama: After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three.

Over the past three years — since January 2010 — the U.S. economy has added 490,000 manufacturing jobs. According to the Bureau of Labor Statistics, there were 11,950,000 manufacturing jobs in January 2013 — up from the 11,460,000 jobs recorded in January 2010. However, there were 12,556,000 manufacturing jobs in January 2009. So overall, there has been a loss of 606,000 jobs since Obama took office.

More recently, “manufacturing growth has been stuck in neutral,” as the National Association of Manufacturers said in a Feb. 12 press release. During the three-year period cited by Obama, manufacturing jobs peaked at 11,957,000 in July 2012. Since then, the jobs figure has fluctuated, and the economy has lost 7,000 manufacturing jobs.

Invoking Romney on Minimum Wage

Making a pitch to raise the minimum wage to $9 an hour, Obama argued for its bipartisan appeal by invoking his 2012 presidential campaign foe, Republican Mitt Romney, as a kindred spirit when it comes to tying the minimum wage to the cost of living. But Romney actually backpedaled a bit on that position during the campaign.

Obama: Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty and raise the federal minimum wage to $9.00 an hour. … So here’s an idea that Governor Romney and I actually agreed on last year: Let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on.

It’s true that during a campaign event on Jan. 7, 2012, Romney remarked: “My view has been to allow the minimum wage to rise with the [Consumer Price Index] or with another index so that it adjusts automatically over time.”

But just two months later, Romney hedged on that position in an interview with CNBC’s Larry Kudlow, saying that in the midst of a recovery, “right now, there’s probably not a need to raise the minimum wage.”

Kudlow, March 5, 2012: Why do you want to raise the minimum wage? Why do you want to index it for inflation?

Mitt Romney: Well, actually, when I was governor the legislature passed a law raising the minimum wage. I vetoed it. … And I said, “Look, the way to deal with the minimum wage is this. On a regular basis,” I said in the proposal I made, “every two years we should look at the minimum wage, we should look at what’s happened to inflation. We should also look at the jobs level throughout the country, unemployment rate, competitive rates in other states or, in this case, other nations.” So, certainly, the level of inflation is something you should look at and you should identify what’s the right way to keep America competitive. … Yeah, so that would tell you that right now there’s probably not a need to raise the minimum wage.

Car Mileage Double-talk

The president claimed that “we have doubled the distance our cars will go on a gallon of gas” — which isn’t remotely close to being true right now.

In fact, according to the University of Michigan’s Transportation Research Institute, the average EPA city/highway sticker mileage of light duty vehicles sold last month was 24.5 miles per gallon. That’s quite good — a record, in fact. And it’s 17 percent better than the 21.0 mpg for vehicles sold four years earlier, in the month Obama took office. That’s an impressive gain, but it’s a far cry from having “doubled the distance our cars will go on a gallon of gas.”

Obama was referring to his administration’s actions for raising future federal fuel efficiency standards, which call for cars and light trucks to achieve 54.5 mpg by the model year 2025. But it remains to be seen whether automakers can produce — and consumers will buy — vehicles that achieve such a doubling of average mileage a dozen years from now.

Health Care Costs

Obama said the federal health care law was “helping” to reduce the growth of health care costs. It may be helping, but the slower growth of health care spending began before the law was enacted. And experts say the down economy has played a role. It’s not clear how much impact the federal law has had.

Obama: Already, the Affordable Care Act is helping to slow the growth of health care costs.

From 2009 to 2011, the growth in national health care spending was at its lowest rate in 50-plus years, the entire time the National Health Expenditure Accounts reports have been published by the Centers for Medicare & Medicaid Services. Spending grew by 3.9 percent each year for 2009, 2010 and 2011. (The growth in 2008 was 4.7 percent, and 2007′s was 6.2 percent, with higher growth for years previous — see Table 3.)

But the Affordable Care Act wasn’t signed into law until 2010, after the recent slowing began. And the bulk of the law, including the individual mandate and federal subsidies to help Americans buy insurance, has yet to take effect. Experts have mainly blamed the economic slowdown for a corresponding reduction in health care spending. Economists and statisticians at the Centers for Medicare & Medicaid Services reported in 2011: “Job losses caused many people to lose employer-sponsored health insurance and, in some cases, to forgo health-care services they could not afford.”

The New York Times reported this week that the slower growth meant lower deficits, as federal spending also eased. The Congressional Budget Office reduced its projected Medicare and Medicaid spending for 2020 by 15 percent. The federal health care law may be affecting spending, but it’s unclear how much. As the Times said, “Health experts say they do not yet fully understand what is driving the lower spending trajectory.”

The economy is part of the reason, said CBO Director Douglas W. Elmendorf. But the way doctors and hospitals deliver care may be another.

New York Times, Feb. 11: Some insurers have moved away from simply paying per procedure by giving health care providers financial incentives to reduce complications and rehospitalizations, for instance. Doctors, nurses and hospitals have also taken steps to reduce wasteful treatments. Many of the changes predate the 2010 health care overhaul, but the law has also contributed to the changes by offering some financial incentives, health care experts say.

So the health care law gets some credit. It’s “helping” to slow the growth of costs, as Obama said. But the reduced growth began before the law was enacted and is due to forces — such as the economy — beyond the control of the legislation.

Puffing Up Renewable Energy

Obama said wind and solar energy have doubled. True, but they’re still a very small percentage of energy production and consumption in the U.S.

Obama: We have doubled … the amount of renewable energy we generate from sources like wind and solar.

We looked at this claim when Obama made it several times on the presidential campaign trail last fall. We found that wind and solar energy generation had doubled from 2008 to 2011. Consumption for wind also doubled, and it nearly doubled for solar.

But wind and solar were very small portions of energy generated before — and even after — that increase. Wind was 13 percent of all renewable energy generated in 2011. (Renewable includes biomass, such as ethanol, and hydro.) Solar was 1.3 percent of renewable energy generated. Renewable energy altogether accounted for just 9 percent of U.S. energy consumption in 2011.

Frank V. Maisano, an energy expert at the law firm Bracewell & Giuliani, told us: “Making large increases in wind power or solar power is not as big a challenge, let’s say, as making a 50 percent increase in natural gas. … You have to put it into context.”

– by Eugene Kiely, Brooks Jackson, Lori Robertson and Robert Farley

A company that sells a popular Valentine's Day decoration— the helium balloon — is floating a pair of new advocates toward Capitol Hill.

North Carolina-based wholesaler Helium & Balloons Across America has hired the Alpine Group to lobby on its behalf, according to documents filed Wednesday with the U.S. Senate.

Greg Means, a former chief of staff for ex-Rep. Dennis Eckart, D-Ohio, and Mike Henry, a former staffer on the House Transportation and Infrastructure Committee, will handle the account, the Senate filing shows.

The documents state that the lobbying duo will press the government on issues "affecting domestic helium supply and pricing."

A company employee confirmed the company is concerned about helium supply issues, and forwarded questions to owner Gary Page, who couldn't immediately be reached for comment.

Indeed, companies that rely on the gas are enduring one of the most significantheliumshortages in decades, causing prices to spike.

In addition to its namesake products, Helium & Balloons Across America also sells candy and plush toys, such as the decidedly adorable "huggy bear" — a large, white bruin clutching a red heart featuring the words "I Love You."

The company is not the only member of the balloon lobby: An outfit called the Balloon Council has spent $80,000 during each of the past three years lobbying the federal government on legislation that includes Senate Bill 2374 — the Helium Privatization Act — and "issues related to the crude refined helium supply."

In 2009, a network of online media outlets began popping up in state capitals across the nation, each covering the news from a clearly conservative point of view. What wasn’t so clear was how they were funded.

“The source is 100 percent anonymous,” said Michael Moroney, a spokesman for the Franklin Center for Government and Public Integrity, the think tank that created the outlets.

In fact, 95 percent of Franklin’s revenue in 2011 came from a charity called Donors Trust, according to Internal Revenue Service records.

Conservative foundations and individuals use Donors Trust to pass money to a vast network of think tanks and media outlets that push free-market ideology in the states — $86 million in 2011 alone. The arrangement obscures the identity of the donors wishing to keep their charitable giving private, especially “gifts funding sensitive or controversial issues,” according to the group’s website.

The $6.3 million donation to the Franklin Center was the second-largest gift made in 2011 by the group, a tax-exempt “public charity” that takes tax-deductible donations from donors “dedicated to the ideals of limited government, personal responsibility, and free enterprise,” according to its website.

Donors Trust includes 193 contributors, the majority of whom are individuals. “A lot of donors are flying totally under the radar,” says president and CEO Whitney Ball.

Donor-advised fund

Since its founding in 1999, Donors Trust and its affiliated organization, Donors Capital Fund, have distributed nearly $400 million, becoming major vehicles for tax-exempt giving from wealthy conservatives such as billionaire industrialist Charles Koch.

Koch is among an exclusive pool of donors who have used Donors Trust as a “pass-through,” says Marcus Owens, the former director of the IRS Exempt Organizations Division, now in private legal practice. “It obscures the source of the money. It becomes a grant from Donors Trust, not a grant from the Koch brothers.”

Ball helped found Donors Trust in 1999 as a “donor-advised” fund. Donors can open an account and protect their identity from the public and even the recipient of their grants.

In addition, donor-advised funds offer contributors an extra level of control over where their money ends up, which seeks to remedy what Ball sees as the tendency for foundation money to “drift left.”

This was a chief concern of Daniel Searle, the late philanthropist and pharmaceutical executive who was one of Donors Trust’s early board members.

In 1998, with help from Donors Trust co-founder and board chairman Kim Dennis, Searle established an endowment called the Searle Freedom Trust, now worth $114 million, which has in turn given generously to Donors Trust.

‘Great guys’

The Searle Freedom Trust is one of dozens of conservative foundations that have given tens of millions of dollars to Donors Trust from 2001 to 2011. Among the group’s donors is the Knowledge and Progress Fund, a Wichita, Kan.-based foundation run by Charles Koch.

The foundation gave almost $8 million to Donors Trust between 2005 and 2011.

Where those funds ended up is a mystery, though some Donors Trust recipients, including the Mercatus Center and the Institute for Humane Studies based at George Mason University in Virginia, have also received major funding from foundations set up by Charles Koch and brother David.

Nearly half of the revenue for David Koch’s Americans for Prosperity Foundation came from Donors Trust in 2010, in the form of $7.6 million in grants.

Representatives for the Koch foundations did not return calls for comment.

Before Donors Trust, Ball was the director of development for the libertarian Cato Institute, which Charles Koch was instrumental in founding.

“We think they’re great guys,” she says of the Kochs, “but if they weren’t around, we’d still be successful.”

At a private Koch fundraising meeting in the summer of 2010, Donors Trust hosted cocktails and dessert for what Ball called a “target-rich environment” of wealthy donors.

Several wealthy conservatives who have attended Koch fundraising parties have Donors Trust accounts, including Amway co-founder and longtime booster of conservative causes Richard DeVos; hedge fund billionaire Paul Singer; and Philip Anschutz, owner of the conservative Examiner newspapers.

Dozens of other major conservative philanthropies have Donors Trust accounts, including the Lynde and Harry Bradley Foundation, the John M. Olin Foundation and the Coors family’s Castle Rock Foundation, according to IRS records.

Money in the states

For a decade, Donors Trust has bolstered the efforts of D.C.-based conservative think tanks, including Cato, the Heritage Foundation and the American Enterprise Institute — whose president, Arthur C. Brooks, is on the Donors Trust board.

In recent years, it has taken a strong interest in the states, funding state-level think tanks and three national umbrella organizations that coordinate their activities:  the American Legislative Exchange Council, the State Policy Network (SPN), and the Franklin Center.

“Gridlock” at the federal level of government means donors see “a better opportunity to make a difference in the states,” says Ball, who sits on the board of the State Policy Network.

SPN has become a major recipient of Donors Trust money — receiving $10 million in the past five years.

In 2011, the nearly $2 million in grants from Donors Trust made up about 40 percent of SPN’s revenue for the year, according to tax records obtained by the Center.

In the past five years, Donors Trust money has gone to at least 51 state-level think tanks affiliated with SPN, located in nearly every state. Last year, SPN used the money to incubate think tanks in Arkansas, Rhode Island and Florida, where it hosted its yearly gathering in November.

One workshop touted privatization of state and local government services. Another featured anti-tax crusader Grover Norquist. A third focused on how “property rights and markets provide the best way to protect the environment.”

SPN also sponsors the American Legislative Exchange Council, another D.C.-based clearinghouse for state-level policymaking that gets support directly from Donors Trust.

A laboratory for corporate-friendly laws in the states, ALEC hosts closed-door meetings where corporate lobbyists and state legislators meet to hammer out free-market legislation.

Ten state-level think tanks got a total of $200,000 from Donors Trust to attend ALEC meetings in 2011 including the Michigan-based Mackinac Center and the Arizona-based Goldwater Institute, which introduced a raft of anti-union model bills at ALEC’s spring 2012 conference.

The Mackinac Center has gotten $2.4 million from Donors Trust since 2008, according to the Bridge Project, a liberal think tank.

One Donors Trust grant to Mackinac Center was earmarked for “statehouse reporting” efforts. Mackinac put the money toward a media machine of blogs and research studies making the case for the state’s new “right-to-work” law.

The Mackinac Center works closely with other Donors Trust recipients, including the Franklin Center, which counts Mackinac’s “media” outlets in Michigan as affiliates.

The Franklin Center, Mackinac and another major recipient of Donors Trust cash, Americans for Prosperity, co-hosted a day-long training for “citizen watchdogs” featuring speakers on “school choice” and “union reform” from the Mackinac Center and Republican state Rep. Tom McMillin, who is also an ALEC member.

Against the tide

The California-based Tides Foundation, which Ball calls the “ideological opposite” of Donors Trust, also operates donor-advised funds.

In 2011, Tides raised $91 million and made $96 million in grants, including $26 million to overseas recipients.

Tides gives grants to the American Civil Liberties Union Foundation and liberal groups like the Center for American Progress and the National Resources Defense Council.

Since 2010, the foundation has received $10 million from George Soros’ Foundation to Promote an Open Society, which has assets of $2.2 billion. Tides has assets of $142 million, and the Donors Trust funds have combined assets of $62 million.

The Center for Public Integrity has received funding from Soros’ Open Society Foundations and the Tides Foundation.

Soros’ foundation listed the specific recipient of its grants to Tides, including its largest gift, a $1 million grant for school nutrition programs. The largest foundations contributing to Donors Trust do not identify the ultimate recipient of their funds, records show.

Donor-advised funds offer private foundations created by wealthy individuals several tax advantages and a degree of anonymity, but there are also advantages for recipients.

The Franklin Center, for example, maintains a tax-exemption as a “publicly supported” entity.

If the organization were perennially accepting 95 percent of its funding from a handful of wealthy donors “it would not count as public support” and could jeopardize its tax status, Owens said.

Though its donors remain anonymous, the Franklin Center touts“transparency, accountability, and fiscal responsibility as its watchwords.”

Franklin has numerous ties to the Koch-connected Americans for Prosperity like board member Rudie Martinson, a former assistant state director for AFP’s North Dakota’s chapter, and Franklin’s vice president of strategic initiatives, Erik Telford, who was director of membership and online strategy at AFP for four years.

One of Franklin’s state-based blogs, New Jersey Watchdog, also received $50,000 from AFP in 2011, according to IRS records.

In 2011 alone, Donors Trust helped the Franklin Center expand by funding state-based reporting projects in Illinois, Iowa, Missouri, Nebraska, Nevada, Ohio and Virginia.

Recurring themes on the Franklin Center blogs include “union bosses,” “Marxian” senators and the perils of renewable energy.

Franklin has noted that its journalists’ work had landed on major networks from Fox to MSNBC. The details of several stories offered by the Franklin-funded outlets have been called into question, however.

One report from a New Mexico affiliate housed at a free-market think tank also funded by Donors Trust garnered national attention when it reported that millions of dollars in federal stimulus money had been allocated to non-existent congressional districts.

The government database on stimulus spending had indeed listed non-existent districts as receiving funds, but the Associated Press reported that the problem was due to data errors and that “’phantom congressional districts’ are being used as a phantom issue to suggest that stimulus money has been misspent.”

When asked to comment on the criticism, Franklin Center spokesman Moroney said: “Franklin Center adheres to the highest degree of journalistic integrity and we stand by our Watchdog.org reporting 100 percent. In this case, the Associated Press had it wrong.”

The Obama administration is forging ahead with a multi-billion dollar plan to shift from paper to electronic medical records, despite continuing concerns the program may be prompting some doctors and hospitals to improperly bill higher fees to Medicare. An investigation into those billing questions — which convened a hearing Wednesday — has yet to produce much in the way of results, and critics are questioning the seriousness of the efforts.  

Some digital records software marketed to medical professionals may be encouraging use of elevated billing codes that pay fatter fees, according to the nation’s top health information technology official. That could undermine cost savings the government expects to achieve by adopting the digital systems.

“There is a lot we don’t know about that,” Farzad Mostashari, the National Coordinator for Health Information Technology, said Wednesday at a hearing of policy experts studying the billing issue. “We don’t know if the shift (in higher billing) reflects appropriate coding or inappropriate coding.” He added: “We don’t know if this leads to an increase in costs … or has other impacts.”

In October, Mostashari directed the panel of experts to investigate whether the digital systems allow doctors to cut and paste records from prior encounters with a patient, a practice known as “cloning.” Many experts say this process can raise the size of a patient’s bill, even though it reflects little in the way of added or necessary medical service.

Mostashari’s called for the review in the wake of the Center for Public Integrity’s “Cracking the Codes” series, which found that thousands of medical professionals have steadily billed higher rates for treating seniors on Medicare over the last decade — adding $11 billion or more to their fees. The investigation suggested that Medicare billing errors and abuses are worsening as doctors and hospitals switch to electronic health records.

Mostashari said at the start of Wednesday’s daylong hearing that it is “pretty clear” that if digital health records are “documenting care that didn’t occur, that’s not just fraud, it’s really dangerous medicine.”

But the policy panel spent less than an hour listening to four witnesses discuss the billing issue, suggesting that officials aren’t likely to quickly resolve concerns about potential fraud and abuse even as they commit up to $30 billion in government funding to encourage doctors and hospitals to purchase electronic records.

Ivy Baer, representing the Association of American Medical Colleges, recommended in her testimony that use of the “copy/paste” functions be limited and that doctors only document services “pertinent” to treating the patient’s current medical problem.

Michelle Dougherty, director of research and development from the American Health Information Management Association, said in prepared testimony that digital records can produce “volumes of redundant data” that are “very difficult to use and understand.” She said policy makers need to be aware of “red flags” that could produce inaccurate records — for instance, software that allows doctors with a single mouse click to check a box indicating that all body systems were examined and found to be normal, even though that not all were actually examined. Since doctors are compensated for the total amount of service they provide, these systems can improperly generate higher fees.

Dougherty also said that “cloned” documentation produced by cutting and pasting information from previous patient visits “continues to be a significant problem” that creates “unnecessary redundancy and at times inaccurate information.”

There was little talk of how wiring up medicine might raise doctor billings when President George W. Bush in 2004 set the goal of creating a digital medical record for every American within ten years. In early 2009, the Obama administration added billions of dollars in stimulus funds in the hopes that electronic health records would both enhance the quality of medical care and hold costs in check.

At the hearing’s conclusion panel chair Paul Tang, of the Palo Alto Medical Foundation in California, said that the group had little information about whether digital records improperly contributed to rising health care costs.

“We don’t have any data, positive or negative, that would be useful,” he said.

In all, the Obama administration expects to spend more than $30 billion helping doctors and hospitals purchase the gear and use it to improve health care. More than half the nation’s hospitals have received some payments, and so far more than $10 billion has been spent. Just over half the doctors now billing Medicare are using digital records.

But critics of the initiative have claimed for years that the office of national coordinator (ONC) has been more aggressive as a cheerleader for the technology industry than regulator and steward of billions of dollars in taxpayer money.

Donald W. Simborg, a California physician who participated in two government groups that studied the billing fraud issue, said on Wednesday that Mostashari’s review relies too heavily on panel members with close ties to the burgeoning health information technology industry. He questioned its effectiveness in determining if the digital equipment contributes to Medicare billing fraud.

Simborg likened the situation to “asking the NRA to investigate gun violence.” Simborg noted that the policy committee consists of strong supporters of electronic health records “who could hardly provide an unbiased and objective view on this.”

Ross Koppel, a sociology professor at the University of Pennsylvania, said that officials face a difficult balance in making sure that the software programs accurately reflect the services a doctor rendered and are not just maximizing  payments.

In a brief interview on Wednesday, Mostashari bristled at the suggestion that his office is doing little to ensure that digital medical records don’t take taxpayers for a ride. “This is just the beginning of the conversation,” he said. An ONC official said that the Centers for Medicare & Medicaid Services plans to investigate the “upcoding” issue in regard to digital records, but could provide no details. The ONC panel is set to resume its deliberations today.

Criticism of the initiative also has come from Republicans in Congress concerned about its costs and from within the federal government.

In a Sept. 24 letter, Department of Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder warned five hospital and medical groups of their intent to ramp up investigative oversight, including possible criminal prosecutions, of doctors and hospitals that use electronic health records to improperly bill for more complex and costly services than they actually deliver — a practice known as “upcoding.”

In an Oct. 4 letter, four Republican House members urged HHS Secretary Sebilius to suspend government payments to hospitals and doctors, arguing the program may be wasting tax dollars and doing little to improve the quality of medical care. They argued that tax dollars spent so far have failed to ensure that the digital systems can share medical information, a key goal. Linking health systems by computer — called interoperability — is expected to help doctors avoid costly duplication of tests and medical errors. The House members have yet to get a response, according to a spokesperson.

The HHS Office of Inspector General also is investigating what it called “fraud vulnerabilities” related to use of electronic health records. The report is “currently in process” and is expected to be released sometime this year, according to agency spokesman Donald White.

While many experts believe that digital records will eventually prove their worth and help doctors keep people healthier, the government program has spawned an aggressive sales push by technology companies, which typically stress that their products can significantly boost the bottom line for doctors and hospitals. One company predicts an increase of one Medicare coding level for each patient visit to the doctor, potentially adding $225,000 in new revenue in a year, for instance.

Federal officials lack any system to monitor the accuracy of hundreds of billing and medical software packages in use across the country. That shortcoming caught the eye of the American Medical Association, which helped develop the billing codes and favors stricter government standards. In May, the doctors’ group urged officials to require testing that assures digital devices bill accurately and “do not facilitate upcoding.”

The information technology industry generally agrees that computerized medical records can lead to higher costs. But it argues that the software makes it easier for doctors and hospitals to more efficiently document all of the work they do — which they often failed to do on by hand on paper.

The 2012 election, the most expensive on record, left the political action committees of many top lobbying firms hurting for cash, a Center for Public Integrity analysis of Federal Election Commission records indicates.

The PAC sponsored by Patton Boggs, for example, the nation's biggest lobbying firm, ended the 2012 presidential election cycle with 20 percent less cash than it did after the 2008 presidential election cycle — nearly $146,000, versus $183,000 records show. It also ended the 2010 midterm election cycle with slightly more available cash. Patton Boggs has no comment on its PAC activity, said Kevin O'Neill, deputy chairman of the firm's public policy department.

The firm's dozens of recent clients include AT&T, Citigroup, Delta Airlines, Facebook, FedEx, General Electric, Goldman Sachs, the Lance Armstrong Foundation, National Association of Broadcasters, Northrop Grumman, Raytheon, Visa and Wal-Mart, according to filings with the U.S. Senate.

Meanwhile, the PACs of Van Scoyoc Associates, Williams and Jensen and Cassidy & Associates also each enter the 2014 election cycle with less cash on hand than they did at the same point two and four years ago, the analysis shows.

Holland & Knight, K&L Gates, Alston & Bird and Akin, Gump, Strauss, Hauer & Feld enter the midterm election season off their cash-on-hand mark from either two or four years ago, but not both. Although K&L Gates' PAC is in slightly better financial shape now than at the end of the 2010 cycle, its current reserve of about $138,000 is down more than 23 percent from the more than $180,000 it boasted following the 2008 cycle.

Unlike freewheeling super PACs that may accept unlimited donations, traditional PACs may only raise up to $5,000 from an individual per year, making replenishment of campaign war chests more labor intensive. The payoff? A traditional PAC is allowed to give money directly to a politician's campaign, something super PACs are banned from doing.

Heavy PAC spending contributes to lower reserves at the end of an election cycle, obviously, and several lobbying firm PACs spent well into the six-figure range during the 2012 cycle. They'll almost exclusively rely on firm employees to refill their accounts. And spending for lobbying firm PACs often begins at the front end of election cycles so the PACs may make an impression on lawmakers early in a congressional session.

Despite the expensive election, the PACs of four top 20 lobbying firms are heading into the 2014 cycle with more money than at the same point two or four years ago.

Ernst & Young is tops among them. The accounting firm, which earned more than $13.5 million in 2012 from its lobbying services, finds its PAC flush with more than $868,000 cash on hand far more than the roughly $276,000 it carried into the 2010 election cycle, federal records show. The firm had no comment on its PAC activities, spokesman John La Place said.

Prominent Ernst & Young lobbying clients include Aetna, Airlines for America, Barclays, Boeing, Dow Chemical, ExxonMobil, Johnson & Johnson, Microsoft, Pfizer, the Renewable Fuels Association and Zurich Financial Services, Senate records show. 

Brownstein Hyatt Farber Schreck realized the greatest increase in its PAC cash balance, jumping 116 percent — from about $64,500 to more than $139,000 — from the start of the 2010 cycle to the start of the 2014 cycle.

With more than $112,000 heading into the 2014 cycle, Hogan Lovells' PAC is also on better footing than it was two or four years ago. BGR Group's cash poor PAC posted only about $2,600 in reserve to end last year, but that's more than it had at the end of the previous two cycles.  

Among the nation's top 20 firms last year in terms of lobbying revenue, as ranked by the Center for Responsive Politics, eight do not sponsor federal PACs. They are Ogilvy Government Relations; Podesta Group; Peck, Madigan & Jones; Mehlman Vogel Castagnetti; Capitol Counsel; McBee Strategies; Cornerstone Government Affairs and Fierce Isakowitz & Blalock.

Florida Sen. Marco Rubio and Kentucky Sen. Rand Paul made misleading or exaggerated claims in their responses to President Barack Obama’s State of the Union address. Rubio claimed that the federal health care law was causing people to lose “the health insurance they were happy with,” but that glosses over the fact that 27 million uninsured Americans are expected to gain coverage. Paul claimed the federal government borrows “$50,000 every second,” but the true figure is about $30,000. And he made a reference to an Internet rumor about Obama giving out free phones to the poor.

Rubio Lambasts Health Care Law

Rubio gave the Republican response immediately after Obama’s address, and he criticized the Affordable Care Act.

Rubio, Feb. 12: And because many government programs that claim to help the middle class often end up hurting them. For example, ObamaCare, it was supposed to help middle-class Americans afford health insurance. But now, some people are losing the health insurance they were happy with.

The fact is, the Affordable Care Act is expected to cause tens of millions of uninsured Americans — many of them likely falling under the vague “middle class” label — to gain health insurance, not lose it. In a fact sheet on his speech, Rubio’s office points to a nonpartisan Congressional Budget Office report that said 27 million of the uninsured would have coverage as early as 2017 (as shown in this more detailed CBO chart).

Rubio’s claim about some people losing “the health insurance they were happy with” references the CBO’s estimate that the number with employer-sponsored coverage would decline by 7 million, also as early as 2017. That’s a net reduction, with some workers gaining coverage, some losing it, and others deciding to obtain other insurance on their own.

Again, these are estimates for what the insurance landscape will look like in the future. People aren’t “now … losing the health insurance they were happy with,” as Rubio said. In fact, CBO’s estimates show 2 million uninsured Americans gaining coverage this year. Employer-sponsored insurance is going up by 1 million — not down. Medicaid and CHIP coverage also go up by 1 million. The mandate that individuals have insurance, and subsidies for lower-income persons, don’t go into effect until 2014, but already adult children up to age 26 have been able to stay on their parents’ insurance under the federal law. And while some workers are expected to lose an offer of insurance from their employer in the future, the overall impact of the law is a significant net gain in coverage.

The CBO report does say that it has increased its estimate of the number without employer-sponsored coverage through 2022, up from 4 million in a previous estimate. Why did the number go up? CBO said it was due to the lower marginal tax rates for those earning under $450,000 a year, as enacted by the American Taxpayer Relief Act — which was passed to avert the so-called fiscal cliff. The extension of those lower rates make tax-free employer-provided insurance less valuable, and it “will lead to a greater reduction in such coverage and higher enrollment in insurance exchanges than previously estimated.” So lower taxes would cause more workers to join the subsidized exchanges. CBO also adjusted its estimate of what workers would earn as income, the result being that “slightly more tax filers and their dependents” would qualify for subsidies and Medicaid. Fewer workers would take employer-sponsored coverage as a result.

Paul Overstates Federal Borrowing

In his response to the president — the Tea Party response, not the official GOP response — Paul exaggerated when he claimed the federal government borrows “$50,000 every second.” The U.S. is borrowing a lot of money — but not that much. The actual amount is about $30,000 a second.

Paul: We’re in danger, though, of forgetting what made us great. The president seems to think the country can continue to borrow $50,000 every second.

The nonpartisan Congressional Budget Office in its Feb. 5 budget outlook report (Table 1) projects that the public debt will increase from $11.280 trillion in fiscal 2012 to $12.229 trillion in the current fiscal year, which began Oct. 1, 2012. That’s an additional $949 billion in public debt, which is how much the federal government borrows from individuals, corporations, foreign countries and entities other than the federal government. That comes to $30,093 per second, so the country is not borrowing “$50,000 every second.”

Now, that per-second figure was considerably higher earlier in the Obama administration. In fact, Treasury Secretary Timothy Geithner wrote a letter to Congress on April 4, 2011 that said: “On average, the public debt of the United States increases by approximately $125 billion per month (although there are significant variations from month to month).” That equals $1.5 trillion a year, meaning the U.S. at the time was borrowing $47,564.68 every second.

We went to the Treasury’s “debt to the penny” website to determine how much the public debt had increased in the 12 months prior to Geithner’s letter. We found that it rose from $12.76 trillion on April 1, 2010 to $14.25 trillion on April 1, 2011. That was an increase of roughly $1.49 trillion — or $47,248 every second. So, Geithner’s figure was accurate at the time. (Reuters wrote a story a month after Geithner’s letter that cited the treasurer’s $125 billion monthly figure. “The U.S. government borrows more than $40,000 per second,” the wire service wrote.)

We don’t mean to minimize the scope of the nation’s debt problem. But Paul is wrong to suggest the president will “continue to borrow $50,000 every second,” when CBO projects the U.S. will borrow about 40 percent less than that this fiscal year.

Paul Advances ‘Obama Phone’ Myth

Paul also wrongly suggested that the Obama administration instituted a program to give free cell phones to the poor.

“The president offers you free stuff but his policies keep you poor,” Paul said. He later commented that “for those who are struggling, we want you to have something infinitely more valuable than a free phone, we want you to have a job and a pathway to success.”

While it’s true that the government provides subsidized phone service for low-income persons, such programs were in existence before Obama came into office.

As we wrote most recently in May 2012, Lifeline, a federally mandated program that reimburses phone companies with a monthly subsidy of $9.25 for each low-income customer, has been around since 1984, when it began providing landline service to customers. Funded by telecom fees that are part of customers’ monthly phone bills, the program is designed to fulfill FCC policy of providing universal access. The program was then expanded during the George W. Bush administration in 2008 to cover cell phone usage.

And as we originally wrote in 2009 — debunking false Internet claims of an “Obama phone” — TracFone Wireless also started its SafeLink Wireless program, which offers up to 250 free minutes of cell phone use each month, in 2008.

These and similar programs are actually a product of the 1996 Telecommunications Act to “ensure all Americans, including low-income consumers and those who live in rural, insular, high cost areas, shall have affordable service and [to] help to connect eligible schools, libraries, and rural health care providers to the global telecommunications network.”

– Lori Robertson, Eugene Kiely and D’Angelo Gore

Sen. Frank Lautenberg, D-N.J., announced today he's retiring from the U.S. Senate, but that doesn't necessarily mean he's done fundraising.

Lautenberg's campaign committee, which has $182,000 to its name, owed the senator more than $1 million heading into 2013, according to its latest federal campaign finance filing.

The debt stems from money Lautenberg personally loaned his campaign committee during 2002 when he beat a better-funded Republican, Douglas Forrester.

Had Lautenberg sought another term, he would have likely faced popular Newark, N.J., Mayor Cory Booker in a Democratic primary.

Early polls gave Booker a sizable lead, meaning the 89-year-old Lautenberg would need to crank his fundraising machine to its highest level ever — and potentially dump in more of his own cash — to have any chance at retaining his seat. That Lautenberg, even as an incumbent, is hurting for cash doesn't inspire confidence in his chances for re-election.

Consider that Lautenberg's neighbor in New York state, Democratic Sen. Chuck Schumer, entered 2013 with more than $9.7 million in reserve and no debt.

Lautenberg could forgive the debt. Or the Lautenberg for Senate committee could continue collecting funds, which would be used to pay back its namesake candidate. Lautenberg's current term expires in January 2015, and he says he intends to serve until then.

A candidate committee by law cannot disband until it's settled its debts one way or another, which explains why hundreds of one-time candidates with no plans to re-enter electoral politics still technically operate campaign committees.

Among them are a slew of former presidential candidates, from the recent— Republicans Newt Gingrich and Rick Santorum — to those from campains of yore, such as Democrats John Edwards and Al Sharpton.

Former Secretary of State Hillary Clinton only terminated her 2008 presidential committee this month after finally clearing its debts.

Americans whose spouses have been exiled for years as a result of strict immigration penalties took their plight to Congress Thursday, begging legislators to help them as lawmakers discuss overhauling immigration laws.

Some of the affected families met with a key figure in the immigration fight, Rep. Luis Gutierrez, D-Ill. , who told them that he believes there is a new bipartisan spirit in Congress, and a readiness to eliminate at least some of the mandatory penalties Congress approved in 1996. Members who approved the punitive laws in 1996 said they wanted to try to deter illegal immigration by punishing offenders more harshly. The penalties have split up families for years at a time.

The punishments, mandatory terms of exile known as “bars,” must be imposed on an undocumented spouse when he or she tries to go through the process of becoming a legal resident.  Americans have a right to sponsor foreign spouses for legal residency, but their citizenship does not trump the penalties Congress currently requires be handed down.  

Thousands of Americans’ spouses – many of them parents of children who are U.S. citizens – have received these bars since they started kicking in, after delays, around 2002. A basic bar ousts spouses for 10 years. But some spouses have been barred for 20 years, even for life with no possibility of return. 

On Thursday, affected Americans with small children told Gutierrez of relocating to Mexico to reunite with spouses. They complained of multiple hardships, including health problems and threats of kidnapping and extortion.

“What devastation,” Gutierrez said, calling the bars “cruel” and “fundamentally wrong” because they force a U.S. citizen to raise children alone, without a spouse, or face exile to keep a family together.  Gutierrez sits on the House Judiciary Committee and its House Subcommittee on Immigration and Border Security, key forums where negotiations over immigration proposals will likely occur.  

Los Angeles resident Chris Xitco, whose story was featured in a recent Center for Public Integrity  report on the bars, traveled to the Capitol to participate in the Thursday press event. It was organized by American Families United, a group urging Congress to make changes that would reunite families and put more flexibility into immigration penalties.

Xitco met with aides to his two senators, California Democrats Dianne Feinstein and Barbara Boxer, as well as with an aide to Sen. Marco Rubio, R-Fla., who could be critical to mustering GOP support for immigration reform.  

Rubio’s press secretary did not respond to requests for comment.

“I don’t know how optimistic I can get,” said Xitco, 49, who fears for the safety of his wife Delia and their two small children, who live south of Tijuana, and whom he visits on weekends.

His wife, whom he married in Los Angeles in 2002, was barred at least until 2018, a punishment meted out because she had crossed the border a second time after getting caught once. She received a lifetime bar that can only be appealed after 10 years.

Margot Bruemmer, 40, of New Jersey, recounted moving to a rural area in Mexico’s Veracruz state after her husband was barred in 2005.

The couple has two children, ages two and four. Bruemmer said her lawyer failed to warn the couple that her husband would end up barred for at least 10 years when she tried to legalize him after marrying. Because he had crossed the border more than once, he too was given a lifetime bar that can only be appealed after a decade.  

Bruemmer and her husband received news that he would be barred as others have —back in his home country, at a U.S. consulate, where undocumented immigrants are required to report for a legal-residency interview as a last step before getting green cards.

 “I cried, and I begged,” Bruemmer said, remembering when the U.S. consular officer in Juarez, Mexico, gave the couple the shocking news that her husband was barred.

Bruemmer said her children have to sleep under a mosquito net and live with the threat of catching a fever. But she loves her husband and wants to keep the family together. 

“I want my daughters to grow up the way I grew up,” Bruemmer said. She said her husband is eking out a living running a store. Because she is an American, she said, her family has become a target, and has been threatened with kidnapping and extortion.    

“I am begging for our lawmakers, in this upcoming immigration reform debate, to not forget those of us already living outside the country, already barred,” Bruemmer said. “Please, do not forget us.”

In the 1996 legislation, Congress did include a system of hardship waivers that can shorten bars for some affected families. But that’s an option only if the undocumented spouse entered and resided illegally in the United States once, without multiple crossings.

In addition, up to now, spouses have only been able to apply for hardship waivers after they have been barred and are outside the United States. There are no guarantees that waivers, which are notoriously difficult to argue, will be approved.  Thousands have been rejected, and many families have waited for months, or years, for word on applications.

Americans’ complaints about lengthy separations have resulted in some changes.

Starting in March, under order by President Obama, undocumented spouses of U.S. citizens will be allowed to apply for hardship waivers before going to their final residency interview back in their home countries.  Rep. Lamar Smith, at the time the GOP chair of the House Judiciary Committee, denounced Obama’s change on the waiver procedure.  

“Who is the president batting for – illegal immigrants or the American people?” Smith said in a statement.  He was the author of the 1996 immigration reform.

But Obama’s waiver change won’t help Xitco, Bruemmer or Edgar Falcon, a citizen from El Paso, Texas, who also traveled to Capitol Hill this week.

Falcon’s wife, Maricruz, 24, has been barred for life, and now lives in Durango, Mexico. She arrived in the United States when she 16, brought in illegally by family members.  Because her sister used a false ID to enter, a U.S. consular official decided Maricruz must have used one as well, Falcon said.

“I thought there was a waiver for teens,” Falcon said.  After Maricruz was barred, Falcon contacted his congressional representatives, but received no reply. “They turned their back on me,” the 27-year-old said.  

Gutierrez said he has been contacted by many Americans with barred spouses, and many others who are too afraid to try to legalize their spouses.

“The American public does not understand this situation,” Gutierrez said. But he sees potential allies for reform among some Republicans, he said, including Rep. Paul Ryan of Wisconsin, the former vice presidential contender, and Rep. Raul Labrador, R-Idaho.  Gutierrez said he met with Rubio for an hour recently, and has also discussed the situation with Ryan . 

Kathy McGroarty, 36, a resident of Chicago, read an emotional statement Thursday while at the Capitol, recounting how she and husband tried to live in Mexico after he was barred nearly a decade ago. They ended up returning to the United States – he illegally.

“For almost 10 years, my husband, Ines, and I have lived every day with the fear that our lives could be destroyed by a deportation order,” McGroarty said. “We have two boys, Estevan and Diego, who have no idea that their father’s immigration status could ultimately bring unbelievable heartache to our home. As far as they know, we are just another regular American family.” 

Might lobbyists one day save the world from killer space rocks?

Don't count on it. But a few cosmos-minded special interests have spent tens of thousands of dollars in recent years prodding the federal government to better track potentially deadly near-earth asteroids, U.S. Senate records indicate.

Such activity — easily dismissed as the stuff of space nerds and doomsayers — could now accelerate, as a meteorexplosion today over central Russia injuredhundreds of people and has already reopened debate about government's role in predicting or averting an even greater calamity.

In 2008, the California Space Authority sent a lobbyist to Washington, D.C., in part to promote passage of HR 4917, a bill sponsored by Rep. Dana Rohrabacher, R-Calif., that would "establish an Office of Potentially Hazardous Near-Earth Object Preparedness" and "prepare the United States for readiness to avoid and to mitigate collisions with potentially hazardous near-Earth objects in collaboration with other agencies through the identification of situation-and-decision-analysis factors and the selection of procedures and systems."

The bill died in committee.

Colorado-based Ball Aerospace & Technologies Corp. also in 2008 lobbied on a section of HR 6063, the National Aeronautics and Space Administration Authorization Act of 2008, that directed NASA to continue efforts to "detect, track, catalogue, and characterize near-Earth asteroids and comets in order to provide warning and mitigation of the potential hazard of such near-Earth objects to the Earth," Senate records show.

The bill also "expresses the sense of the Congress that the United States should seek to obtain commitments for cooperation from other nations with significant resources for contributing to a thorough and timely search for such objects and an identification of their characteristics."

NASA for years has engaged in variousefforts to track near-earth asteroids and other potentially hazardous space objects, such as a massive rock that's set to pass by Earth about 17,500 miles away today — closer than the orbits of some human-made satellites.

But scientists estimate that they've only identified a small percentage of space rocks that pose a threat to the planet, particularly those less than 50 meters in length but carrying the potential to explode with the force of a nuclear bomb.