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- 04/09/13--08:18: _Cook Island provide...
- 04/09/13--10:26: _Top Malaysian polit...
- 04/09/13--15:13: _McCain campaign ree...
- 04/10/13--07:41: _Obama proposes shif...
- 04/10/13--07:30: _Dem senator: Campai...
- 04/10/13--10:41: _Release of offshore...
- 04/10/13--12:11: _Political strategis...
- 04/11/13--08:48: _GOP senators urge F...
- 04/11/13--10:51: _Center's Kristen Lo...
- 04/12/13--07:54: _Pentagon spends bil...
- 04/12/13--11:57: _Continuing our inve...
- 04/12/13--15:56: _Wealthy supporters ...
- 04/16/13--13:17: _GOP super donor Bob...
- 04/16/13--08:08: _Louisiana sinkhole ...
- 04/15/13--03:00: _OPINION: 'limited b...
- 04/15/13--09:20: _'Crocodile Dundee' ...
- 04/15/13--09:27: _Onshore and offshor...
- 04/15/13--20:53: _Allen West fuels hi...
- 04/16/13--12:58: _From homemaker to h...
- 04/16/13--08:09: _Report urges phaseo...
- 04/09/13--08:18: Cook Island provider a 'one-stop shop' for the mega-rich
- 04/09/13--10:26: Top Malaysian politicians use offshore secrecy
- 04/09/13--15:13: McCain campaign reels in riches from 2008 legal fund
- 04/10/13--07:30: Dem senator: Campaign finance laws a 'mockery'
- Discrepancies in reporting to the IRS and to the Federal Election Commission
- Discrepancies between reported and actual political activity
- Characterizing political TV ads as “educational activities” or “legislative activities”
- Characterizing as non-political donations made to other groups that spend it on political advertising
- Disbanding and reforming under other names before the reporting is due for the disbanded organization
- 04/10/13--10:41: Release of offshore records draws worldwide response
- Canada's national revenue minister Gail Shea says the government may pursue the Canadian Broadcasting Corporation in court to force it to share the offshore leaks records.
- French budget minister Bernard Cazeneuve joins the clamor from governments around the globe in urging ICIJ and its media partners to release the offshore tax haven files to them, to "aid justice and help them do their job".
- Austrian Chancellor Werner Faymann says he is ready to make concessions on banking secrecy, to bring the nation in step with Switzerland and Luxembourg. "Austria should participate in talks on banking secrecy,” Austrian Chancellor Werner Faymann declared to Die Presse.
- The European Commissioner for Taxation, Algirdas Šemeta, called for an automatic exchange of information between countries and a "tough common stance". "Recent developments,fuelled by the outcome of the Offshore Leaks, confirms the urgency for more and better action against tax evasion .... Now it is time to put words into action." He said he was "very pleased" to see many of the Member States reviewing where they stand on the issues and "intensifying their political will to act."
- The Swiss government has distinguised itself from other world governments by publicly stating it does not want access to the offshore leaks records. Finance minister Eveline Widmer-Schlumpf said Switzerland has worked hard in recent years to curb fraud and tax evasion and that much of the activity pointed to in the leaked documents can be perfectly legal. She says the Swiss government does not want access to the data as "it was acquired illegally and Bern wants no part of that".
- The Philippine Presidential Commission on Good Government probe into the disclosure that Maria Imelda Marcos Manotoc, the eldest daughter of the late dictator Ferdinand Marcos, was a beneficiary of a secret offshore trust in the British Virgin Islands, will release its report within two weeks. “We are duty bound to investigate and, depending upon informed preliminary findings, decide whether to pursue the matter,” said Andres Bautista, the chairman of the Presidential Commission on Good Government, tasked with recovering the Marcos family’s alleged ill-gotten wealth.
- The president of the Association of German Banks denied that his group’s members had helped customers engage in tax evasion. “First in line are the individuals and the organizations that invest their money in tax oases,” Andreas Schmitz said."
- The Berne internal revenue service authorities announced they will re-open the Gunter Sachs case after ICIJ's revelations about the former Mr. Brigitte Bardot's intricate offshore scheme.
- In Canada, a Liberal senator urged his caucus colleague, Senator Pana Merchant, to answer questions in the wake of CBC News and ICIJ reports that she has been listed as beneficiary of an offshore trust created by her husband, a well-known class-action attorney. "We're all innocent until proven guilty in this country, but I want to hear her explanation," Senator Percy Downe told CBC News in an interview.
- In the Philippines, two lawmakers dismissed a report by an ICIJ media partner, the Philippine Center for Investigative Journalism (PCIJ), that they had offshore holdings. Senator Manuel Villar said his offshore entity was a “1-dollar shell company” that he wasn’t required to report, because he hadn’t made any real investment in it. Villar said that he hadn’t conducted business with the British Virgin Islands company “because I decided to concentrate in the Philippines.” Congressman Joseph Victor ‘JV’ G. Ejercito suggested the story about him was politically motivated. “To the best of my knowledge, I have truthfully and accurately declared all my assets, liabilities, and net worth” on required disclosures forms for public officials, he said in a statement.
- Germany's Economics Minister Philipp Rösler urged the media to pass the data on to the government, stressing that tax evasion was a "criminal act."
- Luxembourg's Finance Minister Luc Frieden says he is open to greater transparency of its banks in order to cooperate further with foreign tax authorities.
- The Indian Finance Minister P. Chidambaram said an inquiry had been initiated by the authorities against individuals whose names figured in the global media report. “Yes. We have taken note of the names and inquiries have been put in motion in respect of the names that have been exposed,” he told a press conference.
- The Mongolian Deputy Speaker, Sangikav Bayartsogt, admitted to an "ethics failure" over his undeclared million-dollar Swiss bank account. He told a press conference: “It is true that there is 1,658 Euros or 2.9 million MNT in a Swiss bank account. I opened the account to trade in international stocks with three other acquaintances in 2008. My failure of responsibility is that I did not include the company in my declaration of income. I have admitted my ethic failure and I am ready to take responsibility."
- Philippine government officials said they will investigate evidence that Maria Imelda Marcos Manotoc, a provincial governor and daughter of the late dictator Ferdinand Marcos, was the beneficiary of a secret BVI offshore trust.
- George Mavraganis, the Deputy Finance Minister of Greece announced that the Greek government is moving to address offshore-driven tax dodging. Greek members of parliament asked Mavraganis what he planned to do about the 103 offshore companies that ICIJ found hadn’t been registered with Greece’s tax authorities.
- George Sourlas from Greece’s Ministry of Justice said the revenue loss caused by offshore was huge. “By the actions of offshore companies in Greece, the revenue loss to the Greek government is in the order of 40% or more of the debt of our country,” Sourlas said. “The offshore companies cast a shadow at this time of great crisis, when some get rich and many get poor.”
- In France, President Francois Hollande denied knowledge of the offshore accounts held by his 2012 campaign manager, Jean-Jacques Augier, asserting that it’s up to the tax administration to monitor Augier’s private activities. Reports about Augier’s offshore dealings by Le Monde, the BBC and other ICIJ partners came in the wake of news about tax fraud charges against Hollande’s ex-budget Minister, Jerome Cahuzac.
- The office of Azerbaijani President Ilham Aliyev asserted there was nothing unusual about the information in the leak – which showed that his two daughters were shareholders of three offshore companies. The statement said the President’s daughters “are grown up and have the right to do business.” A spokesperson for Azersun – a holding company controlled by Hasan Gozal, a corporate mogul who was listed as the director of the daughters’ companies – said the report was biased and based on inaccurate information. “I regret that authority of Press Council doesn't go beyond Azerbaijan and there is no such institution worldwide to fight racketeer journalists,” the spokesman said.
- Ex-Colombian President Álvaro Uribe Vélez publicly defended his sons’ involvement in offshore business. Uribe stated that his sons Tomás and Jerónimo are entrepreneurs and “have participated in business dealings since they were children” and “they are not tax evaders.”
- In the UK, David Cameron is facing renewed pressure to take action over Britain’s entanglements within the offshore world. Lord Oakeshott, a senior Liberal Democrat said that the secrecy haven of the British Virgin Islands “stains the face of Britain.” Oakeshott and others are questioning whether Cameron will raise the issue in June of at the G8 summit of wealth nations. "How can David Cameron keep a straight face calling for the G8 to make big business pay tax when we let the BVI use British law and British protection to suck in billions in dirty money?" Oakeshott asked.
German Finance Minister Wolfgang Schäuble stated on public radio that he was “pleased”with the ICIJ reports. He went on to say, “I think that such things as have been made known will increase the pressure internationally, and we will be able to increase the cooperation with those who have been more reticent”, a sentiment reflected in Germany’s previous lobbying to stamp out tax avoidance.
- Canadian Federal Revenue Minister Gail Shea called the released of offshore banking information as “good news” for Canadians and bad news for tax evaders. Ms. Shea urged ICIJ or anyone else with information on tax cheats to come forward.
- Pascal Saint-Amans, director of the Organization of Economic Cooperation and Development, said: "Secrecy is no longer acceptable. We need to get rid of it. If the rules make it possible, then we'll change the rules.”
- 04/10/13--12:11: Political strategists praise power of online fundraising
- 04/11/13--08:48: GOP senators urge FCC to avoid new disclosure rules
- 04/12/13--07:54: Pentagon spends billions on duplicative camouflage outfits, GAO says
- A reporter for the Financial Times tweeted that “the leak of 260GB of data on offshore companies - this could be the biggest story of the year.”
- A Belgian news website called this “Probably the most significant journalistic collaboration in history.”
- However, a Wall Street Journal columnist called it an “offshore witch hunt.”
- French President François Hollande called for "eradication" of the world's tax havens and told French banks they must declare all of their subsidiaries. He also announced the creation of a special prosecutor to pursue cases of corruption and tax fraud. The New York Times suggested Hollande’s bold move was motivated by a domestic political scandal, an ailing economy and “angry public reaction” to ICIJ’s reports.
- Luxembourg's Prime Minister Jean-Claude Juncker announced his country plans to lift bank secrecy rules for European Union citizens who have savings based in the country, ending decades of bank secrecy in Luxembourg. "We are following a global movement," Juncker told parliament in a state-of-the-nation address.
- Russian Deputy Prime Minister Igor Shuvalov is moving his offshore assets back to Russia after ICIJ's revelations that Shuvalov's wife Olga Shuvalova was either a shareholder or owner of several secretive offshore entities.
- The Philippine Presidential Commission on Good Government investigation into the disclosure that Maria Imelda Marcos Manotoc, the eldest daughter of the late dictator Ferdinand Marcos, was a beneficiary of a secret offshore trust in the British Virgin Islands, will be released within two weeks.
- Athens’ district attorney Panayota Fakou has started a preliminary probe to find out if Greeks who own offshore companies unearthed by the ICIJ investigation have evaded taxes or laundered money.
- And the European Commissioner for Taxation, Algirdas Šemeta, called for an automatic exchange of information between countries and a "tough common stance." "Recent developments, fueled by the outcome of the Offshore Leaks, confirms the urgency for more and better action against tax evasion ... Now it is time to put words into action."
- 04/12/13--15:56: Wealthy supporters fuel Obama nonprofit
- Orin S. Kramer of Englewood, N.J. ($75,000): Chairman of hedge fund Kramer Spellman LP and former Clinton administration transition team adviser.
- Ryan Smith of Salt Lake City ($50,875): CEO of Qualtrics, a Utah company that produces Web-based software for surveys.
- Anthony P. Crabb of Healdsburg, Calif. ($50,000): Philanthropist and marriage equality advocate.
- Barbara Grasseschi of Healdsburg, Calif. ($50,000): Bundler who raised at least $200,000 for Obama’s re-election efforts and is married to Crabb.
- John Morgan of Orlando, Fla. ($50,000): Partner at Morgan & Morgan, the Florida law firm that employs former Gov. and Republican-turned-Democrat Charlie Crist. Morgan is also a campaign bundler who raised at least $500,000 for Obama’s re-election efforts.
- Laura Debonis of Boston ($50,000): Former director of the Google Books Library Project.
- William H. Freeman of Nashville, Tenn. ($50,000): Campaign bundler who raised at least $500,000 for Obama’s re-election efforts.
- Wayne Jordan of Oakland, Calif. ($50,000): Campaign bundler who raised at least $500,000 for Obama’s re-election efforts.
- Michael Kempner of East Rutherford, N.J. ($50,000): Campaign bundler who raised at least $500,000 for Obama’s re-election efforts.
- Charles H. Murphy III of Little Rock, Ark. ($50,000): Founder of Murphy Oil Corporation.
- S. Donald Sussman of Portland, Maine ($50,000): Prominent hedge fund investor.
- Andrew Tobias of New York City ($50,000): Treasurer of the Democratic National Committee and gay rights activist. Also a bundler who raised at least $500,000 for Obama’s re-election efforts.
- Imaad Zuberi of El Monte, Calif. ($50,000): Campaign bundler who raised at least $500,000 for Obama’s re-election efforts.
- 04/16/13--13:17: GOP super donor Bob Perry dead at 80
- $10 million to Restore Our Future (pro-Mitt Romney)
- $8.5 million to American Crossroads (pro-Republican)
- $1 million to the Congressional Leadership Fund (pro-Republican)
- $1 million to Independence Virginia PAC (pro-George Allen)
- $1 million to Club for Growth Action (pro-conservative)
- $1 million to Freedom Fund North America (pro-Denny Rehberg; pro-Rick Berg)
- $600,000 to Texas Conservatives Fund (pro-David Dewhurst)
- $250,000 to Freedom PAC (pro-Connie Mack; pro-Allen West)
- $100,000 to Make Us Great Again (pro-Rick Perry)
- $15,000 to Maverick PAC USA (pro-Republican)
- 04/16/13--08:08: Louisiana sinkhole shatters calm, prompts buyouts on the bayou
- 04/15/13--03:00: OPINION: 'limited benefit' plans are no real bargain
- 04/15/13--09:27: Onshore and offshore realms equally secretive in Greece
- 04/15/13--20:53: Allen West fuels his nonprofit with campaign cash
- 04/16/13--12:58: From homemaker to hell-raiser in Love Canal
- 04/16/13--08:09: Report urges phaseout of deadly acid
The story of Portcullis TrustNet and its birthplace — the Cook Islands — is in many ways the story of the offshore system itself.
It’s a largely invisible world, a curious blend of the parochial and the global that’s made up of the minor personalities and politics inside each offshore jurisdiction — many with populations no larger than a small town.
But by establishing special zones, these tiny provinces have changed the face of international finance and business and impacted law enforcement, tax policies and political and economic transparency across the planet.
The Tax Justice Network, an international advocacy group opposed to tax havens, estimates that about one third of all world wealth is held offshore, and about half of all world trade flows through there.
TrustNet, now headquartered in Singapore and with branch offices in 16 other locations, describes itself as a “one-stop shop,” employing lawyers and accountants who help “high net worth” clients manage their money and business activities.
In this they are not alone: there are dozens of other so-called offshore service providers.
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Key members of the Malaysian government, their families, and well-heeled associates are among those owning secretive offshore companies in Singapore and the British Virgin Islands, according to a cache of leaked documents.
They include former prime minister Mahathir Mohamad's son Mirzan, Federal Territories and Urban Well-Being Minister Raja Nong Chik Zainal Abidin and Michael Chia, the alleged ‘bagman' for Sabah Chief Minister Musa Aman.
The files, which were obtained by the Washington-based International Consortium of Investigative Journalists (ICIJ) and examined by Malaysiakini, show more than 1,500 Malaysians owning offshore companies in Singapore – dubbed as the new Switzerland – as well as the British Virgin Islands (BVI), an international tax haven.
The ICIJ list comprises a curious mix of Forbes-listed tycoons, parliamentarians, retired politicians, civil servants and their spouses, members of royal families, famous and infamous businesspeople, underworld kingpins and even former beauty queens.
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More than four years after the fact, John McCain the senator is benefiting big time from John McCain the presidential candidate.
That's because the McCain-Palin Compliance Fund Inc. of a presidential election more than four years distant transferred $819,200 this winter to the Arizona Republican's U.S. Senate campaign committee, according to a document filed today with the Federal Election Commission.
Cash transfers between established political committees are in general, legal, and McCain for several years after the 2008 election routinely shuttled funds among the several political committees under his watch. They include his 2008 presidential committee, a Senate committee, joint fundraising committees and a leadership political action committee.
But the McCain-Palin Compliance Fund was supposed to raise private dollars to pay for legal and accounting costs associated with McCain complying with presidential campaign finance rules.
It now will ostensibly fuel a Senate re-election bid, which would next come in 2016 for the 76-year-old senator.
As it was, McCain — the last major presidential candidate to accept public presidential matching funds in exchange for limiting private donations — used a portion of the McCain-Palin Compliance Fund's money in 2008 for advertising, travel, facility rentals, finance consulting, website services and other such expenses, exploiting a legal loophole in federal election law.
Last year, the compliance fund also donated $9 million to an educational foundation that bears McCain's name and is run by a trio of the senator's top political fundraisers.
McCain first created the compliance committee in February 2008 under the name John McCain 2008 General Election Compliance Fund, amending its name when adding then-Alaska Gov. Sarah Palin as his running mate, according to federal records.
The compliance fund's overriding prohibition: it could not directly fund McCain's presidential campaigning efforts, for which he had a separate political committee.
The fund, however, transferred $550,000 in February to the yet-to-be-terminated John McCain 2008 Inc., which as of March 31 reported $633,000 cash on hand. The transfer was legal, apparently, because the race was over.
A McCain representative could not immediately be reached for comment.
Update, 4:49 p.m.: McCain spokesman Brian Rogers said in an email that the senator plans this year to consolidate the cash across his remaining presidential-related accounts into his Senate committee.
"The [compliance fund] is getting closed out this year, so transferring those funds to the campaign committee gives Senator McCain maximum flexibility to manage them in the coming months and years," Rogers wrote.
Rogers concurs that such transfers are legal, and he notes that former Sen. John Kerry, D-Mass., transferred 2004 presidential compliance fund cash into his Senate committee three years after losing his own White House bid.
Immediately before the 2008 presidential election, the McCain-Palin Compliance Fund boasted more than $20.5 million in its account. That amount has dwindled to less than $35,000 as of March 31, according to its latest filing.
While transferring money from a compliance fund to a dormant campaign appears legal, an online donation form for the McCain-Palin Compliance Fund, which was active until being taken down following this article's posting (see screenshot), seems to suggest otherwise.
It reads, in part: "Contributions to the Compliance Fund will be used solely for legal and accounting services to ensure compliance with federal law, including a portion of the cost of broadcast advertising, campaign offices, and computer/website expenses. Federal law prohibits the Compliance Fund contributions from being used for a candidate's election."
The Obama administration will propose a deep cut in funding for nuclear nonproliferation programs at the Energy Department largely so it can boost the department’s spending to modernize its stockpile of nuclear weapons, according to government officials familiar with the proposed 2014 federal budget to be unveiled Wednesday, April 10.
The half-billion-dollar shift in spending priorities reflects an administration decision that nuclear explosives work the Energy Department performs for the military should be both accelerated and expanded. But Democrats on Capitol Hill and independent arms control groups predicted the decision will provoke controversy and a substantial budget fight this year.
Under the 2014 proposal, the Energy Department’s nuclear weapons activities funding — which includes modernization efforts for bomber-based and missile-based warheads — would be increased roughly 7 percent, or around $500 million, above the current level of $7.227 billion for these activities.
The department’s nonproliferation programs, aimed at diminishing the security threat posed by fissile materials in other countries that can be used for nuclear weapons, would be cut by roughly 20 percent, or $460 million, below the current level of $2.45 billion, the officials said.
The new weapons-related spending would expand efforts to upgrade the W76, W88, W78, and B-61 warheads, and help fund construction of a new facility in Tennessee for processing uranium, a nuclear explosive used in these and other warheads. These programs have experienced billions of dollars in cost overruns in recent years, forcing the administration to look elsewhere in the DOE budget to find the money it needs to keep them alive.
Much of the reduction in nonproliferation spending — around $183 million — would come from a controversial plant designed to transform excess plutonium from the U.S. nuclear weapons arsenal into fuel for reactors that generate electricity, known as the Mixed-Oxide (MOX) fuel fabrication plant in Savannah River, S.C. That plant was initially budgeted at $1.8 billion, but the pricetag has ballooned to at least $7.5 billion, provoking widespread criticism and allegations of mismanagement.
The plant is about 60 percent completed, but one senior administration official called it “managerially and programmatically, a nightmare,” with continuously rising costs.
Under the Obama administration’s proposal for fiscal year 2014, spending for the MOX plant would be around $330 million, or 47 percent of the budget it was supposed to get next year. Its construction would be greatly slowed, while the Defense Department and the Department of Energy’s National Nuclear Security Administration study alternative ways to safeguard tons of the excess plutonium.
Secretary of Energy nominee Ernest Moniz, speaking at a Senate confirmation hearing Tuesday, ducked multiple questions from Sen. Tim Scott (R.-S.C.) about whether he supports completing the MOX plant. “I will certainly look into this with high priority” if confirmed, he told Scott.
Under the Obama proposal, the budget for other DOE work related to nuclear nonproliferation would also be curtailed by about $277 million. That would include a 16 percent cut in spending on efforts to halt the use of fissile material in civilian nuclear reactors and collect or secure weapons-usable fissile materials in other countries; an 8 percent cut in spending on policy to control the spread of nuclear weapons-related technologies; and a 36 percent cut in efforts to monitor potential illicit commerce in fissile materials.
Only one category of Energy Department nonproliferation work would be increased — research and development, mostly to finance work on a new nuclear detonation sensor to be placed about Air Force satellites.
The priority shift “is going to be a disaster,” said a Democratic congressional aide, who asked not to be identified because he was not authorized to speak on the budget before its official release. “These cuts are going to be huge,” and will be particularly problematic amid budget boosts for weapons programs that many lawmakers believe “have been mismanaged for the last five to six years.”
Joan Rohlfing, president of the Nuclear Threat Initiative, a nonprofit arms control group founded by Ted Turner and former Sen. Sam Nunn, said “the U.S. programs for securing, reducing and eliminating weapons usable nuclear materials are a critical part of our strategy for combating nuclear terrorism and preventing the proliferation of these deadly dangerous materials…A decision to significantly cut these programs, including our near-term ability to dispose of excess plutonium, would be a setback to our ability to reach critical security goals.”
As recently as December 3, President Obama described the government’s nuclear nonproliferation efforts — including some directed by the Defense Department — as “one of our most important national security programs.” Speaking at the National Defense University, Obama said the effort was “nowhere near done. Not by a long shot.” He also proudly said the government has been “increasing funding, and sustaining it ... because our national security depends on it.”
But several officials and other sources familiar with the administration’s budget deliberations this year said the DOE nuclear weapons-related cost overruns and the new austerity climate gripping Washington – including the demand under so-called “sequestration” legislation for $54 billion in national security spending cuts each year until 2021 –had upended the administration’s plans to spend more on nonproliferation.
Specifically, officials said, the Energy Department determined in consultation with the Pentagon that it would likely need $10 billion in new funds to fulfill all of its promises to the military for the production of modernized warheads, over the next decade alone.
The Energy Department needs at least $3 billion to $5 billion more to upgrade the B61 nuclear bomb — meant for deployment aboard strategic and tactical aircraft — than it initially expected, and several billions of dollars more to cover cost overruns in construction of the uranium processing facility. (Work on the facility and its equipment was well along when DOE abruptly realized it would not be large enough to accommodate needed machinery, forcing a costly redesign and lengthy delays.)
The department also needs more funds than anticipated for improvements to the W76 warhead, which is carried by Trident submarine-based missiles.
To cover the $10 billion total cost overrun, the Energy Department and its National Nuclear Security Administration agreed to transfer roughly $3 billion into weapons work from management accounts and other internal savings. It then asked the Pentagon to provide the additional $7 billion.
But then-Secretary of Defense Leon Panetta, after hearing from aides that these overruns were due in part to poor management and inaccurate cost accounting at DOE, initially said the department would not provide any new funds to DOE, on top of the $4.5 billion it previously promised to cover earlier overruns, according to two government officials privy to the deliberations.
In the end, the Pentagon was cajoled into contributing $3 billion more. But that still left a $4 billion gap between DOE’s nuclear weapons-related promises to the military and its ability to complete that work, forcing a scramble during the department’s budget deliberations to cut from other programs, officials said.
One, who asked not to be named, said the DOE shortfall had set off “months of wrangling” about the issue, not only within the department but at the highest levels of the administration. At the end of it, a $250 million DOE “nuclear counterterrorism incident response” program previously considered a weapons activity was shifted to the nonproliferation budget account, a change that has the effect of making the bottom line for that account look better than it otherwise would have.
Moniz, in his confirmation hearing, tread carefully around the topic of what the department should be spending on nonproliferation. “If confirmed, I intend to make sure that [DOE laboratories and intelligence experts] … continue to sustain the nation’s nuclear security,” he said, without delving into budgetary issues or specific programs.
Asked for comment, NNSA spokesman Robert Middaugh said he could not respond until the budget has been formally released. A Pentagon spokeswoman, Jennifer D. Elzea, declined to address the issue in detail but confirmed that “over the past year DOD and DOE carried out a joint study regarding DOD's nuclear weapons requirements and funding options for those requirements. The study determined that the modernization program was underfunded, and steps have been taken to ensure adequate funding for essential modernization needs moving forward."
Tom Collina, research director for the Arms Control Association, a Washington-based nonprofit group, said “in a way,” it seems inconsistent for the administration to promote arms control while cutting the DOE’s nonproliferation budget. But he said officials may have calculated that they cannot win congressional support for further cuts in nuclear arsenals with Russia without spending billions more to refurbish America’s remaining stockpile of nuclear weapons, under a bargain Obama struck during his first term.
The Center for Public Integrity has previously reported administration officials had agreed that the number of nuclear warheads the U.S. military deploys could be cut by at least a third, below a limit of 1550 established in a treaty with Russia in 2010. The officials have also decided to discuss a potential agreement for such reductions with Russian president Vladimir Putin.
Campaign finance law is a “mockery,” a Democratic senator declared today during a hearing on Capitol Hill, while also urging federal officials present to criminally investigate politically-active nonprofits, shell corporations and super PACs.
Sen. Sheldon Whitehouse, D-R.I., chairman of the Senate Judiciary Committee's subcommittee on crime and terrorism, cited several “areas of mischief” regarding politically active nonprofits, known in Internal Revenue Service parlance as 501(c)(4) organizations.
Several such organizations spent into the millions of dollars directly advocating for or against political candidates during the most recent election cycle — activity not seen in U.S. politics prior to the Supreme Court's 2010 Citizens United v. Federal Election Commission decision.
Among Whitehouse's complaints about these nonprofits:
Whitehouse suggested the DOJ explore a new legal avenue for prosecuting nonprofits and super PACs active in elections — specifically, fraudulent claims about their political activity in federal filings.
Whitehouse pressed Mythili Raman, the assistant attorney general for DOJ’s criminal division, on what he considered the department’s failure to investigate potential false statements.
“Are you rethinking deferring these matters to the IRS where it is not a tax specific underlying issue and something as simple as making a false statement? Are you satisfied with the state of play right now with the lack of prosecution in this area?” the senator asked.
Raman said the DOJ “could and would” prosecute the laundering of political contributions to super PACs through anonymous shell corporations.
“But not yet?” Whitehouse interrupted.
“Not yet,” Raman said. “Without discussing ongoing investigations, we can assure you that we are incredibly vigilant about the use of these organizations as an end-run around contribution limits.”
Sen. Ted Cruz, R-Texas — the only other committee member present — provided conservative counterweight to the hearing, pointing to the risks of additional campaign finance regulation to free speech rights.
Cruz at one point asked Raman: “In the department of Justice’s opinion, what is the government interest in regulating the independent expenditures of public citizens?”
Raman replied: “What I’m suggesting is that there is a risk, from what we have seen, of bad actors using the anonymity that is given to them when they declare as 501(c)(4)’s to hide the identities of their donation. We need to be able to determine when those donors are acting with bad intent and frankly when a campaign or an election official maybe knowingly allowing that kind of donation to occur, intending to be influenced in some corrupt way. That is our job.”
Whitehouse ended the hearing by urging DOJ officials to be more proactive and show less deference to the IRS on campaign finance enforcement matters.
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ICIJ’s investigative series on offshore secrecy – which draws from a cache of 2.5 million secret records – has ignited reactions around the globe.
In the few days since the initial release of stories by the ICIJ and its media partners across the world, public officials have issued statements, governments have launched investigations, and politicians and journalists have been debating the implications of the records and the reporting.
Among the reactions and responses:
Digital strategists Teddy Goff and Zac Moffatt worked for warring candidates during the 2012 presidential election, but they both agree that successful politicians going forward will fully embrace online engagement — and reap financial rewards from it.
Moffatt, Republican presidential candidate Mitt Romney’s digital director, points to Sens. Marco Rubio, R-Fla., and Rand Paul, R-Ky., as candidates with particular online fundraising savvy — and both rising stars in the U.S. Senate who may be considering 2016 presidential bids.
“It’ll be interesting to see how much Rand Paul raised off the filibuster,” Moffatt said, alluding to Paul’s nearly 13-hour talk-a-thon in March against the confirmation of John Brennan to be the new CIA director.
Moffatt also remarked on how Rubio, who faced criticism and ridicule in February about drinking from a water bottle during his rebuttal to President Barack Obama’s State of the Union Address, turned a potential gaffe into an online fundraising opportunity.
Rubio's tactic? Offer reusable Rubio water bottles for a donation of $25 or more, with the cash benefiting his Reclaim America PAC.
Today, the first three listings returned from a search on Google for "Rubio water bottle" pertain not to the senator's liquid-guzzling speech, but the success of his water bottle fundraiser.
Rubio is a client of Targeted Victory, Moffatt's consulting firm.
Goff, the digital director for Obama’s re-election campaign, declined to identify any specific politicians that he sees carrying the torch forward following a panel discussion Tuesday at the National Press Club in Washington, D.C. But he said the power of online fundraising is evident.
Romney's online fundraising never came close, with the former Massachusetts governor more heavily relying on large-dollar contributions.
How powerful is the Internet for converting enthusiasm from supporters into cold, hard cash?
“It’s probably the most powerful by the end of [a campaign] because it’s the most scalable and flexible,” Moffatt told the Center for Public Integrity. “When it ramps, nothing else can really match it."
The Obama campaign notably engaged in extensive A/B testing of its online fundraising appeals — everything from the tone to the suggested donation amount to the subject line.
But Goff warned that replicating techniques alone won’t guarantee success for other politicians.
“Some of the tactics of testing and optimization, sure that will be replicable, but that wasn’t what raised all that money,” Goff said, adding that it was “the relationships” with grassroots supporters that “brought in those donations.”
Politicians who “honor” grassroots supporters, not just in rhetoric but by prioritizing them in the way a campaign is organized, could see similar success, Goff said.
“Obviously I think that President Obama is a pretty special candidate, but people are going to support all kinds of different candidates going forward in both parties,” he added. “Someone is going to come around who is able to inspire a lot of people.”
Sen. Ted Cruz, R-Texas, and a dozen of his Republican colleagues have asked the Federal Communications Commission to resist implementing new rules targeting the makers of political advertisements in the absence of Congress passing new disclosure legislation.
"Political issues should be left to Congress," the senators wrote in a letter dated April 10 and obtained by the Center for Public Integrity. "If [the FCC] were to attempt to establish through rulemaking what Congress has declined to act upon, it would seriously undermine the integrity of the Commission and imperil its independence."
The new letter, which was also signed by Senate Minority Leader Mitch McConnell, R-Ky., calls the yet-to-be-passed DISCLOSE Act "one of the most politically charged, partisan issues in recent Congresses." It criticizes the legislation for raising "grave Constitutional concerns for speech protected by the First Amendment."
The letter also admonishes the FCC not to become an arm of the Democratic Party.
"The FCC has a long tradition of being nonpartisan," the letter states. "We strongly urge you to categorically reject instituting the DISCLOSE Act by fiat."
Representatives for Cruz and the FCC could not immediately be reached for comment.
The senators' message comes a month after FCC officials testified before the Senate Commerce Committee about political advertisements. At the time, Sens. Bill Nelson, D-Fla., and Jay Rockefeller, D-W. Va., advocated that the commission play a larger role in unmasking the funders of political advertisements.
It also comes a day after Cruz questioned the government's interest in "regulating the independent expenditures of public citizens" during a Senate Judiciary Committee subcommittee hearing.
Senate Democrats have been unsuccessful in multiple attempts to pass legislation that would create new reporting and disclosure requirements for groups that air political advertisements.
In the wake of the U.S. Supreme Court's Citizens United v. Federal Election Commission ruling in 2010, Democrats garnered 59 votes for the DISCLOSE Act, one vote shy of threshold needed to break a GOP filibuster.
Political action committees, including super PACs, are required to disclosure their donors to the Federal Election Commission.
But politically active nonprofits organized under sections 501(c)(4), 501(c)(5) and 501(c)(6) of the U.S. tax code need only identify funders who earmark donations for specific political ads.
In other words, such groups today may operate just as super PACs do when it comes to sponsoring ads that advocate for or against political candidates — without the legal burden of disclosing most or all of their contributors.
The Center for Public Integrity’s landmark series on campus sexual assault continues to draw attention from other media outlets, more than three years after the initial stories were published. On Thursday morning, lead reporter Kristen Lombardi appeared on WAMU’s The Diane Rehm Show , which is carried by dozens of stations nationwide.
Lombardi’s investigation into campus rape cases for the Center won the Robert F. Kennedy Award and the Dart Award in 2011, as well as the Sigma Delta Chi Award for Public Service in 2010, among other recognitions.The stories are available below.
The baggy camouflage uniforms currently worn by American troops in Pentagon corridors and in Middle East combat zones may not look flashy, but they aren’t cheap.
After having just two basic uniforms in the 1990’s, members of the military services in recent years have started sporting seven outfits, all with different patterns and colors. The design costs alone have been $12.5 million.
The profusion of styles reflects the robust and enduring tradition of the four military services to go their own way, a circumstance that can cause blurry eyes from the mashup of disparate green, grey, and brown tones when soldiers from different units deploy to the same locale.
But it’s not just a fashion faux pas, according to a new, 199-page report by the Government Accountability Office that examined programs and purchasing at 26 federal agencies to look for needless overlap and duplication.
The fragmentation boosts the costs — the Pentagon’s tab in fiscal 2011 for its camo couture was $300 million — and also produces garb that in some cases lacks a rigorous connection to research about how to remain hidden, according to the report.
The problem is about to get worse: The Army is considering replacing its battle uniform for the third time in 11 years, with three separate new uniforms of its own — including helmets and body armor — printed with “desert,” “woodland,” and “intermediate” camouflage patterns. The GAO estimates this new line of fashions could cost the government $4 billion to purchase over five years.
Of the four services that developed new uniforms in the 1990s — the Army, Air Force, Navy and Marines — only the Marines appear to have done a proper job, according to the GAO.
They used a “knowledge-based approach that includes meaningful data” when developing the clothing in 2000, and as a result, the report said, the leathernecks wound up with an effective camouflage uniform that they’re still using. (The government has even patented some elements of the Marine Corps’ combat apparrel, although the GAO said the other services could still copy it.)
The Army, in contrast, took three years and spent $3.2 million to develop a uniform introduced in 2005 that did not reflect the conclusions of testing.
The Army itself decided in 2009 that its Combat Uniform “offered less effective concealment than the patterns chosen by the Marine Corps and some foreign military services, such as Syria and China,” auditors said. Complaints from troops in Afghanistan about the Army Combat Uniform led Congress in 2009 to direct the military to launch a crash program to develop a new camouflage uniform that blended better with that country’s mountainous deserts.
The Air Force spent $3.1 million designing an Airman Battle Uniform, but then deemed it unfit to use on the battlefield due to heat buildup, trouser fit and other issues. The Air Force chief of staff chose a tiger-stripe camouflage design — which the Marines had ruled out — without testing it first, according to the GAO. Air Force test officials subsequently rated the ABU as marginal or unsatisfactory for concealment 58 percent of the time in 11 tests, auditors said.
The Air Force ultimately decided to use the new Army combat uniform in Afghanistan, but the GAO report said the two services have not been able to agree on a joint combat uniform for future use. The service secretaries, moreover, failed to meet a 2011 congressional deadline for development of common criteria for uniform design.
Mark Wright, a Pentagon spokesman, said that the Defense Department expects to complete work in the next few months on that criteria, however, "to ensure all service members get the same high level of protection."
He said groups called the Joint Clothing and Textiles Governance Board and the Cross-Service Warfighter Equipment Board will pursue "active partnerships" among the services for the joint development and use of uniforms.
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Our reporting of previously secret off-shore companies and trusts from the British Virgin Islands to Singapore will continue throughout this year. The exact value of wealth held offshore in tax havens is hard to come by, but it is estimated to encompass $21-32 trillion in private financial assets.
So far, the work by the Center’s International Consortium of Investigative Journalists (ICIJ) has been republished or cited some 6,500 times by news organizations worldwide. Media in France, Spain and other places have given front-page play to stories about ICIJ’s reports, which have become known in shorthand on Twitter and in many news outlets simply as “Offshore Leaks.” The reaction has been positive, in almost all cases.
Already we can see the impact the stories are having, especially in Europe, where governments have been moving toward more transparency:
Meanwhile, requests that we turn over the leaked off-shore data to authorities are continuing to come in from various governments, including the U.S., France, Canada, Greece, the Philippines and others. French budget minister Bernard Cazeneuve, for example, joined the clamor from governments around the globe in urging ICIJ and its media partners to release the offshore tax haven files to them, to "aid justice and help them do their job."
So far, ICIJ and its worldwide media partners have declined such requests and have chosen not to simply release raw mountains of data. ICIJ is continuing its responsible investigations in country after country, focusing on the public interest—public figures, banking and business leaders, as well as the crooks and fraudsters, who make use the off-shore industry to hide their money.
As we are seeing with the initial release of previously secret tax haven information, transparency and accountability can be powerful motivators for changed behavior and demands for more scrutiny.
Until next week,
Sixteen people accounted for nearly a quarter of the $4.8 million collected by Organizing for Action, the self-described "grassroots" nonprofit group affiliated with President Barack Obama that was created to push the White House’s policy agenda.
About 109,000 people gave money to the nonprofit from January through March, Organizing for Action announced today.
Donors from California ($568,215), New York ($363,893), New Jersey ($221,737), Florida ($84,010) and Massachusetts ($75,975) gave the most, according to a Center for Public Integrity analysis.
The top donor by far was Philip Munger of New York City who gave $250,000. Munger is a philanthropist, academic and long-time contributor to Democratic causes.
Next were John Goldman of Atherton, Calif., and Nicola M. Miner of San Francisco who both gave $125,000. Goldman is former chairman of Willis Insurance Service of California, Inc. a U.S. branch of a global insurance brokerage firm. Miner is the daughter of Bob Miner, co-founder of Oracle Corp. and wife of John Mailer Anderson, a novelist and screenwriter.
Of the top 16 donors, each who gave $50,000 or more, nine are Obama campaign bundlers — elite fundraisers credited with raising funds from well-connected friends, family members and associates, then delivering it in a "bundle." Organizing for Action bills itself as nonpartisan.
Among other top donors:
About 60 percent of the group’s money appears to have come from donors who gave less than $250 and were not identified.
Although the group actively collects donors' employer and occupation information, it has declined to release such information publicly. Withholding such data complicates confirming the identities of donors with common names.
As a nonprofit organization, Organizing for Action is not required to release any information about its donors — unlike campaign committees or super PACs. And for weeks after its founding early this year, leaders offered no indication that it would.
After pressure from campaign finance reformers and others, the group relented and agreed to reveal some donor information. The group also reversed course on seeking corporate contributions. It also refuses lobbyist money, but accepts cash from unions.
The National Education Association is one union that donated early this year, giving the pro-Obama nonprofit $15,466.
Not all big-dollar Obama backers, however, have contributed to Organizing for Action.
For example, the four largest donors to the pro-Obama super PAC Priorities USA Action — James H. Simons, Fred Eychaner, Steve Mostyn and Jeffrey Katzenberg — were absent from Organizing for Action's donor list.
Reity O'Brien and John Dunbar contributed to this report.
Perry is perhaps best known in political circles for helping bankroll an aggressive media campaign against Democratic presidential candidate John Kerry as part of a 527 political committee known as Swift Boat Veterans for Truth.
During the 2012 election cycle alone, Perry contributed $23.5 million to a variety of GOP super PACs.
Perry also financially supported multiple Republican presidential candidates at once last cycle, donating early in the election season to Mitt Romney, former Minnesota Gov. Tim Pawlenty and Texas Gov. Rick Perry, who Bob Perry has long backed at the state level. (The two men are not related.)
For a full Center for Public Integrity profile of Perry, click here.
BELLE ROSE, La. — Tim Brown eases his john boat from his back yard dock into his daily therapy: The Bayou Corne that courses through this patch of southern Louisiana like a lifeline. Brown powers past the Tupelo Gum, Cypress Moss and Swamp Maple trees that drape the bayou in a frame, and steers to the spot where he reels catfish and collects thoughts.
“If I had to actually leave this place and go back to a house on dry land, I’d probably be dead in two years,” says Brown, 65 and retiring next year. “I guess you can say it’s a totally different life out here.”
But now that life, for Brown and 350 other residents in a neighborhood with “Crawfish Crossing” signs and roads named Gumbo, Jambalaya and Crawfish Stew Street, has been shattered by discovery of a 14-acre sinkhole that fractured the community’s calm and may bury its dreams.
The sinkhole, triggered by a collapsed cavern operated by salt mining operator Texas Brine Company LLC, swallowed trees and fouled the air when it appeared August 3. Its discovery sent the Bayou Corne community here in Belle Rose into a state of emergency: Assumption Parish and Louisiana officials ordered a still-in-effect evacuation as state officials scrambled to unearth what happened.
“Initially the concern was, that first day, you have a sinkhole … and you don’t know what caused it. All you know is a 400-by-400 section of marshland just got converted to a muddy pit. Trees were sinking into it and not coming back. It was like quicksand,” said Patrick Courreges, a spokesman for the Louisiana Department of Natural Resources.
Natural gas filtered into the aquifer, and crude oil floated to the top of the sinkhole, about a third of a mile from the nearest homes anchored on each side of Highway 70. Louisiana officials feared explosion hazards and “potentially toxic constituents of crude oil and other hydrocarbons,” though the state said continuous monitoring has detected “no hazardous concentrations.” Yet earlier this month, sampling by Texas Brine found two homes with “concentrations of natural gas below the structure foundations that were above normal background levels,” Assumption Parish officials reported.
“That is just too close to the community to take any chances with what comes next,” Courreges said.
Eight months later, what comes next roils a community so close-knit it hosts its own Mardi Gras parade: The prospect that the entire Bayou Corne neighborhood, all 150 homeowners, will be relocated and not come back; that this haven for retirees and working class Louisianans will be, symbolically, swallowed by the sinkhole.
What’s happening in Belle Rose has played out in dozens of communities threatened by environmental hazards so dire residents feel compelled to demand that industry or government move them out. But as Bayou Corne’s experience shows, winning buyouts is never easy, and leaving is often painful. The community’s travails reveal the human cost of pollution.
“It’s been an ongoing, really to me, like a science fiction novel. You have this big hole that caves in and then it keeps growing and growing and growing,” said Marylee Orr, executive director of the Louisiana Environmental Action Network, an advocacy organization based in Baton Rouge. “Mysterious bubbles. It’s like watching the crawfish pot, bubbling the crawfish pot.”
Bayou Corne “is really a little piece of heaven,” Orr said. “It’s a paradise to them. They could go out, be on a boat, it’s absolutely beautiful. But now a lot of people think it’s ruined forever.”
Many residents have pushed for buyouts from Texas Brine. Last month, after pressure from Republican Gov. Bobby Jindal and parish political leaders, Texas Brine began contacting individual homeowners to begin the process of assessing their property values and, ultimately, making offers. How much the company will pay is unknown, leaving Jindal to tell residents, during a press conference in Bayou Corne last month, that Louisiana will “make them do it again” if the first offers are too small.
“The finger is pointed at us, and we understand that, and we are going to try to make a fair offer,” Sonny Cranch, a Texas Brine spokesman, said recently while giving a visiting journalist a tour of the sinkhole on company property.
Many of those pushing for buyouts are crestfallen by the prospect of packing up from a place where they fish, hunt and occasionally encounter alligators. When school is out, visiting grandkids pop up like spring flowers, giving the community the feel of camp on the water. Since the sinkhole’s arrival, many grandchildren have stopped returning.
Other long-timers refuse to leave homes they saved a lifetime for, state of emergency be damned.
“I don’t care if I’m the only one standing here. I’ll live here as long as I can,” vows James Bergeron, a 14-year resident of Crawfish Stew Street and retired deputy sheriff and offshore crane operator. “I’m 76 years old. This is all paid for. What am I going to do, go somewhere and buy something else?
As he spoke, his eyes glistened.
Across the U.S., buyouts move slowly, painfully
While the environmental hazard in Bayou Corne is new — state officials say they know of no other instance in which a cavern’s sidewall collapsed to trigger a sinkhole — the wrenching prospect of relocation is not new for many communities from Florida to California.
Residents living on the fence-line face long odds in their quest to escape. Few communities flex political power, their voices faint against big-muscled industry or slow moving government.
“The vast majority of relocations in this country have come as a result of politics,” said Lois Gibbs, executive director of Center for Health, Environment and Justice, a nonprofit based in Falls Church, Va., that works with communities seeking relief from pollution.
Gibbs knows this firsthand. More than three decades ago, she was a housewife with sick children in the Love Canal neighborhood of Niagara Falls, N.Y., when she learned that her supposed dream town was built atop a 21,000-ton mound of toxic chemicals. Gibbs’ push lured President Jimmy Carter to come to town and, in 1980, free some 900 families from Love Canal’s toxic dump.
Today, Gibbs and her colleagues at CHEJ have prepared a 43-page guidebook to help communities navigate the tangle of industry and government.
The guidebook includes two dozen case studies of communities that did just that, winning relocation bankrolled by government or industry. But even successful relocation bids take years, sometimes decades.
In Pensacola, Fla., Gibbs said, residents sought for a decade to free themselves from the dioxins, arsenic and heavy metals from an abandoned former wood treating facility. By 1992, the Environmental Protection Agency said it excavated 225,000 cubic yards of contaminated material — creating a mound nearly 60 feet high — and “stored it under a secure cover on-site.” Residents dubbed the site “Mount Dioxin,” and complained of cancers and respiratory disease. The community launched a letter writing campaign demanding the EPA move them out.
Four years later, in 1996, the EPA said it would relocate a third of the residents. Enraged, the blue- collar community turned up the heat. Taking in small donations from across the country, CHEJ took out a full page ad in USA Today challenging President Clinton — then running for re-election, and needing the Florida vote. The ad juxtaposed a Clinton quote — saying that children should not live near hazardous waste sites — with a picture of Pensacola children aside the wood treating plant. Advocates delivered the ad to Hillary Clinton, then in Florida stumping for her husband.
The message, Gibbs said: “Clinton, put your words and your actions together.” Soon after, the community won a full relocation. Some activists refer to Pensacola as the “Black Love Canal.”
Other fence-line fights stretch out even longer.
In Norco, La., a four-street, all-black community named Diamond won a historic relocation from Shell Oil in 2002 after decades spent enduring illnesses and sometimes-deadly plant explosions. The grassroots victory was 13 years in the making, and came five years after a St. Charles Parish jury returned a verdict in favor of Shell in a citizen lawsuit alleging the company’s chemical plant and neighboring refinery contaminated the air and sickened residents. As in Pensacola, the Diamond residents were aided by aggressive activists who helped push intransigent industry and government.
Some communities harmed by pollution never do get out.
In Tallevast, a largely black southwest Florida town founded by turpentine workers, industry and government officials discovered in 2000 that a former beryllium plant had leached a 200-acre underground plume of cancer-causing TCE and other toxins in a town of 1.5 square miles. Lockheed Martin, the property owner at the time, discovered the leaching and set out to clean it up.
Yet for three years, no one — not the county, the state nor industry — told residents what was under their feet. Tallevast homeowners unearthed the news by chance in 2003, when community leader Laura Ward noticed workers on her lawn and started asking questions.
A decade after that discovery, the company has yet to agree to a full relocation.
Ward said residents continue to press for buyouts — with no success. “I think their decision to not do the buyout and do the move, was a bad decision,” Ward said. “We felt like that eight, 10 years ago, and we still feel that way.”
Meantime, Lockheed Martin’s cleanup will unfold over decades. The company vows to “continue to invest in the environmental, health and economic needs of the community.”
In Tallevast, as in Bayou Corne, residents seeking a buyout would depart with painfully mixed feelings — leaving homes they thought would pass down the generations.
Unexplained bubbling — then the sinkhole
Trouble in Belle Rose began months before the sinkhole arrived, with residents noticing a bubbling in the bayou and smelling gas in the air. In June and July of 2012, Assumption Parish, state and federal officials began examining the unexplained bubbling in Bayou Corne and Grand Bayou.
On August 3, an area of wooded swamp in Bayou Corne began to subside, prompting state Commissioner of Conservation James Welsh to issue a Declaration of Emergency. Assumption Parish issued its own state of emergency, and Gov. Jindal did too.
By 7:30 that night, the Assumption Parish Office of Homeland Security and Emergency Preparedness had called for a mandatory evacuation as state and federal scientists searched for answers, “uncertain of what the actual possible risks are,” the state said.
Louisiana authorities discovered that the sinkhole was caused by the collapse of a sidewall of a previously plugged cavern. “The collapse had created a pathway to the nearby groundwater aquifer and the surface for crude oil and natural gas which had been confined in a hydrocarbon-bearing layer,” wrote the state’s Courreges.
The collapse is unprecedented, he said — the “first reported failure of a brine cavern sidewall.” Caverns have collapsed before, but always from the top, he said.
The state directed Texas Brine to remove natural gas in the aquifer through vent wells, provide home methane detectors for any resident wanting them — and to pay residents under terms of the company’s permit and the Parish evacuation order.
Since then, Texas Brine has cut $875 weekly checks to all homeowners, whether the residents left or stayed back. The state’s evacuation order was mandatory — but not forced. Many residents have fled to temporary quarters, but return regularly to check on their properties as the company and state try to keep a lid on the sinkhole and monitor its environmental impact.
State officials have ordered underground 3D seismic technology to get a clearer picture of what is happening underground.
The biggest public safety concern, Courreges said, is “to get the gas out of the aquifer, and stop it from recharging the aquifer.”
“We’ve got to stop the source of it, because it’s still being fed. We’ve got to figure out the source, find some way to intercept it, stop it,” he said. “We’re looking into that 3D seismic to get some information, to get that underground picture.”
The state also intends to gain “a full understanding of the impact the collapse had on the stability of the ground surface,” Courreges said.
The sinkhole continues to stir concern. In late March, more than two dozen trees collapsed into it. And then on March 28, authorities temporarily halted work around the sinkhole after seismic monitoring detected “fluid and gas movement below the sinkhole.” More trees and a sinkhole access ramp sloughed in. On April 1 came another work stoppage amid signs of “fluid and gas movement below the sinkhole,” and water movement at its surface.
Explosion hazards are another worry. The state, working with the EPA, conducted a series of flights over the area scouring for potentially hazardous plumes. Monitoring to date has not “detected concentrations at or above surface that have reached the lower explosive limits,” Louisiana officials say. Concerned that crude oil and saltwater could spread to surface waters, the state ordered a containment berm to be built around the sinkhole.
So far, tests results by the Louisiana Department of Environmental Quality show “no harmful environmental releases,” the state said.
Yet for residents, the harm is right before their eyes: A community facing potential extinction.
‘Keep Out’ signs where residents frolicked
Today, homes once filled with bustle now feature “No Trespassing” or “Keep Out” signs. Along Highway 70, where giant trucks rumble past and dead armadillos occasionally dot the sideway, an insurance company’s ad has suddenly turned ironic: “Dreams can come true.”
The homes range from modest to modern, but all share a link to the water. The sinkhole’s mysterious arrival — and its murky long-term consequences — has taken a psychological toll.
“It’s just horrible,” said Wilma Subra, a Louisiana environmental chemist who has studied the area and visited recently. “This was a very close, very small community. You cannot imagine what they must be going through, day in and day out. Not knowing if you’re ever able to come back or not.”
Julie Albarado said she and her husband, drawn by a love of fishing, hunting and the water, moved to Bayou Corne in 2003. “It’s just terrible that we may have to leave,” said Albarado, who said she was diagnosed with cancer several years ago. “We don’t know where we are going.”
Nick and Brenda Romero say they dread leaving, but see no other option.
The Romeros bought their home in 1991 as a getaway retreat, and moved in fulltime in 1996. “We decided we enjoyed it so much we wanted to retire here,” said Nick. For several years, the couple drove back and forth to jobs in Baton Rouge, some 50 miles away. Nick is retired from the U.S. Postal Service, and Brenda a retired loan closing manager.
They started the community’s annual Mardi Gras parade, replete with live music, beads and hearty food. Their house connects with a vein of canal that leads into the bayou, and their yard features an orange tree that spouts so much fruit they share it with neighbors.
In summer, a cluster of their 10 grandchildren came to visit, with fishing on the bayou, and an occasional encounter with gators.
“Our grandkids loved coming here. It was one experience they never experienced anywhere else,” Nick Romero said. “We don’t have that anymore. Our grandkids can’t come out here anymore.”
Brenda, battling breast cancer, has developed a second career as an artist, often using wildlife as her muse. “To be on the water, peacefully on the water … We feel it would be impossible to find another place like this,” she said. “This is where we wanted to be for the rest of my life.”
Her husband worries about what Texas Brine will offer. “I didn’t and she didn’t cause this,” said Nick Romero. “We still have a mortgage on this. I’m retired with a mortgage.”
Karen St. Germain, the Louisiana state representative for the area, said she understands the residents’ anxiety. “You have taken a piece of their life that they can’t get back,” St. Germain, a Democrat, said on a steamy afternoon last month, just before Gov. Jindal swooped in on a helicopter visit. “I grew up on the water. It’s our sense of calmness.”
The sinkhole threatens to destroy that calm. St. Germain said she is keeping close tabs on how Texas Brine addresses the situation. The company, she said, didn’t initially move quickly to permanently relocate residents. “Not till they got pushed,” she said.
As he landed in Bayou Corne, Jindal shook hands with residents and heard their stories. “For the people that want to leave, there should be that option,” the governor told residents clustered around him. “But it shouldn’t be mandatory.”
Jindal then huddled inside with dozens of residents, emerging later to address the community and press, flanked by Assumption Parish and state officials. Jindal had drawn some criticism for not coming to Bayou Corne sooner — the press conference was his first visit since the sinkhole’s emergence — but he told residents he has been on their side from the start.
“We will hold Texas Brine accountable,” he said. “We’re going to make sure they’re responsible for cleaning up the mess they have caused.”
He cautioned that solutions will not come quickly. “This is a marathon.”
Jindal said Texas Brine has “missed many commitments and deadlines they made to the state. We said, ‘Enough is enough.’ ” The state, he said, will closely follow the company’s offer of buyouts, which could potentially begin coming later this month.
“The real proof will be in whether residents are actually accepting their offers,” Jindal said.
Before the sinkhole, “For Sale” signs were scarce in Bayou Corne. Over the last year, just three properties had been sold, a lawyer for Texas Brine told homeowners at a town hall meeting several hours after the governor’s visit.
Cranch, the Texas Brine spokesman, said the company has moved to address the environmental damage in the community while responding to citizen lawsuits already filed. “We have tried and made a good faith effort to respond as quickly as we possibly could” to the demands of the state, Cranch said. “We were faced with an awful lot of issues.”
Texas Brine’s website includes regular bulletins. “It’s been a big hardship on a lot of these people. Truly it has, and we recognize that,” Cranch said.
Four citizen lawsuits have been consolidated into one case in federal court. A fifth case moves ahead in state court, and more are likely. Environmental activist Erin Brockovich, working with Los Angeles attorneys, came to town in March to meet with homeowners who contacted her after the sinkhole surfaced.
Under a buyout process approved in court, Texas Brine is first contacting residents not represented by lawyers. Getting to that point has taken time, Cranch said, with the myriad environmental and legal issues triggered by the cavern collapse. Another question Texas Brine has grappled with, he said: “What to do with people who stay?”
Back on the bayou
Tim Brown is among them. A lab technician for a chemical plant, he and his wife Kathryn have lived on the bayou for 14 years, hosting crawfish boils and feeling securely at home.
“I’ve always wanted to be on the water,” said Brown, originally from French Lick, Indiana. “We’ve got too much invested in our home to try to move. … Once you live on the water, you don’t want to leave.”
“The fishing is still good,” said his wife. Indeed, Tim Brown said. He caught some catfish that day.
The Browns say they confront the catastrophe with a sense of perspective built from overcoming hardships. Kathryn’s mother and brother lost their homes in Hurricane Katrina. One of their daughters has had breast cancer. Tim Brown underwent heart surgery and a series of knee surgeries in recent years.
Yet they bring a dash of Cajun personality to the chaos. Each Christmas, the Browns decorate their lawn with three giant alligators. In March, the display remained in their front yard — with sinkhole related additions. “Texas Brine Sinkhole — Stink Hole,” says one sign. “We’re having a little fun with it,” Tim Brown said. “And the Texas Brine people thought it was funny.”
Soon, he is back on the water.
“Money’s not everything,” Brown said, recalling the day he encountered beavers, eagles and otters. Giant signs on the water warn of a natural gas pipeline, but Brown betrays little worry. Testing in his yard has not revealed any harm from the sinkhole, he said.
He points out his favorite fishing spot, just past the juncture where the Bayou Corne and Grand Bayou merge, then spins his boat back home. One of his three dachshunds stands beside him as the boat picks up speed.
“Hang on, hound dog,” Brown says to his dachshund, Fritz. As he pulls up to dock, he turns to a visitor and glances upon the water. “This is what we’re staying for.”
Among insurance executives, Aetna CEO Mark Bertolini has been among the most vocal in warning of “premium rate shock” when major provisions of Obamacare kick in on January 1.
"We've done all the math, we've shared it with all the regulators, we've shared it with all the people in Washington that need to see it, and I think it's a big concern," Bertolini told his company’s big shareholders and Wall Street financial analysts in New York last December.
If Aetna does, in fact, hike premiums by more than 100 percent for some of its customers, as Bertolini suggested at the meeting, no doubt part of that money will go to covering his shockingly lucrative paycheck.
While many Aetna employees were lucky to get two percent raises last year, Bertolini’s compensation nearly quadrupled. That’s right, quadrupled.
Aetna disclosed in a filings last week with the U.S. Securities and Exchange Commission that Bertolini’s total compensation in 2012 was $36.36 million, up from $9.7 million in 2011. If you include the $11.1 million in stock awards he was given that will vest later, his 2012 total jumps $47 million.
Bertolini’s “pay shock” so angered many current and former Aetna workers that several of them posted scathing comments on the Hartford Courant’s website.
“All Aetna employees should be picketing outside the office building in protest of this disgrace,” a former Aetna employee wrote. “What kind of leader gives his employees 2% while his earnings nearly quadruple???? Totally selfish.”
One of the reasons Bertolini mentioned “premium rate shock” to his company’s investors undoubtedly is that Aetna won’t be able to continue selling some of its most profitable health plans next year—the ones that have relatively low premiums but such limited benefits that they’ll actually be banned next year.
Since 2005, when it bought a firm that specializes in limited benefit plans, Aetna has been a major marketer of policies that provide such coverage — coverage so skimpy that former Connecticut Attorney General —and now U.S. Senator— Richard Blumenthal once called an Aetna limited benefit policy “virtually worthless.” Blumenthal was concerned that folks who had bought the policies “were led to believe they had significantly more coverage than they actually had."
Often called ‘junk insurance’ by consumer advocates, limited benefit plans typically have an annual cap of $1,000 to $15,000 and have significant restrictions on specific types of care, especially hospitalizations. But the marketing materials for these plans seldom draw attention to what is not covered.
As a consequence, many people have been shocked to find that they are on the hook for hundreds of thousands of dollars in hospital care they thought would be covered by their insurance policy.
One Aetna policyholder, Lawrence Yurdin of Austin, Tex. told The New York Times in 2009 that he and his wife had been forced into bankruptcy because of unpaid medical bills totaling nearly $200,000, even though he had what he thought was adequate insurance. As the Times reported, the brochure the Yurdins were provided indicated that their policy covered up to $150,000 a year in hospital care. Deep in the fine print, however, was language that excluded nearly all of the care Yurdin received for a heart condition at an Austin hospital.
It turned out that that $150,000 was for room and board. Coverage for “other hospital services”—which included just about everything else, including expenses incurred in the operating room—was capped at $10,000.
As the Times noted, “Aetna would have paid for Mr. Yurdin to stay in the hospital for more than five months — as long as he did not need an operation or any lab tests or drugs while he was there.”
Beginning January 1, Aetna and other companies that have made millions of dollars in profits from such plans, including Cigna, where I used to work, will no longer be able to sell them, thanks to the consumer protections in Affordable Care Act. Policies will have to provide decent coverage for hospitalization and other “essential benefits,” and the annual and lifetime caps will be banned. Insurers will also have to provide information in plain language about what is covered and in a format that will enable consumers to make apples-to-apples comparisons among plans.
Aetna CEO Bertolini probably was thinking of the thousands of people who are currently enrolled in limited benefit plans when he warned of premium rate shock. And he has a point. The premiums for such plans are low compared to policies that actually cover medical care doctors and nurses provide to cure you once you’ve been hospitalized. It’s not unreasonable to think that Aetna would charge its existing limited benefit customers more for real insurance—maybe even twice as much. But because insurers market limited benefit plans to low income workers, most likely will qualify for subsidies to help them pay the premiums.
Indeed those people might be shocked when Aetna tells them how much they’ll have to pay for a plan that is not “virtually worthless.” But at least they will be saved from the kind of shock that Lawrence Yurdin experienced when he realized that the money he had been paying Aetna in premiums—some of which went to pay Mark Bertolini’s salary—was not enough to keep him out of bankruptcy court.
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"Crocodile Dundee" star Paul Hogan may have settled his tax case with Australian authorities but he is accusing his once-trusted tax adviser of absconding with $34 million he helped Hogan hide in offshore tax havens.
There is already an international warrant out for Philip Egglishaw, the man known as the ''bowler hat Englishman'', who is the alleged mastermind behind Australia's biggest tax evasion scheme.
But now the international fugitive has the Australian actor on his tail, with Hogan's advisers taking legal action in the US alleging Egglishaw, who set up elaborate corporate structures in tax havens to help his clients evade tax, has stolen the entertainer's money.
Continue reading at ICIJ.org.
For me, the Offshore Leaks investigation started in September 2012.
ICIJ's deputy director, Marina Walker Guevara, sent me a list of Greek names they had extracted from the data and some extra clues on the material.
She told me that I had two choices: either travel to a country in Eastern Europe to search the data myself now, or wait until November to get remote help from another colleague. Two months was too long to wait. A few days later I travelled to Eastern Europe.
An ICIJ colleague showed me how to search the millions of records. During the first few hours I was totally frustrated; I had to check different tables with names and codes; I had to cross check numbers, shareholders, sham directors and addresses; and read hundreds of emails. And time was pressing - I couldn't occupy his desktop and office forever. My aim was to track down all of the offshore companies connected with Greeks in the next three days and to be at the airport on time. I still am not sure if I tracked them all.
Back in Greece the crosschecking continued. With the help of another ICIJ colleague in Spain, Mar Cabra, new aspects of the Greek offshore world were revealed. The stories behind the complex moves of the directors and shareholders unraveled slowly, and some of them were expanding outside the country.
Via the ICIJ forum, Vlad Lavrov from Ukraine, Roman Shleynov from Russia, and Frederik Obermaier from Germany provided valuable answers to my questions about the findings. In one way or another, the problems arising during my investigations were solved by ICIJ's advanced infrastructure and the unprecedented solidarity among my colleagues in this project.
Except for one.
The deeper I went into the stories, the more I confronted opaque obstacles that were not only in the secretive offshore world but in the Greek onshore reality as well.
In my efforts to find out how many of the 107 offshore entities of Greek interest in the ICIJ data were unknown to our tax authorities, I submitted a formal request to the Ministry of Finance of the list of foreign companies registered in Greece.
I still haven't received an answer. Although the list with the foreign entities should be publicly accessible, it wasn't. That's not an exception, it's the rule that applies in Greece to tons of information which should be available to the public.
From sources inside the ministry I was able to access the list of registered offshore companies "unofficially." This lead me to discover that the Greek tax authorities knew of the existence of only four out of the 107 offshore entities in the ICIJ data.
Another wall of opacity appeared while searching two bond transactions via an offshore entity of Greek interests. Due to the fact that the transactions took place over the counter, there was no way to find out who had bought the bonds. And it was one of the most interesting purchases I have ever seen: the buyer paid almost double the price the bonds had sold for just four months earlier, while the company's stock price had remained at the same levels.
Still, after seven months of research into the secretive offshore world, I think that I have only scratched the surface. I know there is a lot more work that has to be done. And, with the help of my colleagues around the world, this scratching may become digging.
Vanquished Rep. Allen West, R-Fla., is using his boatload of surplus campaign cash to fuel another political endeavor — building his newly created nonprofit organization.
West's still-active campaign committee made a "charitable donation" of $400,000 to the Allen West Foundation on March 27, according to a filing submitted to the Federal Election Commission today.
This is on top of $250,000 his campaign donated to the Allen West Foundation in January.
West formally established the Allen West Foundation in March as a 501(c)(4) social welfare organization, saying he intends to use it to train and educate conservative candidates who are minorities or have military backgrounds. He also plans to have the nonprofit group directly involve itself in political races.
During the 2012 election cycle, 501(c)(4) groups, which by law cannot have a primary purpose of engaging in politics, spent hundreds of millions of dollars directly advocating for and against political candidates — advocacy made possible by the U.S. Supreme Court's Citizens United v. Federal Election Commission ruling in 2010.
Such nonprofits may raise and spend unlimited amounts of money, but unlike another kind of powerful electioneering entity — the super PAC— 501(c)(4) groups aren't generally required to reveal their donors.
Donations from a campaign committee to a nonprofit group are legal, and there are no restrictions on the amount. Candidates may also donate campaign funds to their own charities, as former presidential candidate and Rep. Ron Paul, R-Texas, did earlier this month.
West also spent about $178,400 to fund legal efforts surrounding a vote recount from the November election, in which Democratic challenger and current Rep. Patrick Murphy ultimately won by a narrow margin.
The race, in which West and Murphy combined to spend $24.1 million, was the nation's most expensive House race during 2012, according to the Center for Responsive Politics. West accounted for the vast majority of that spending.
Super PACs and nonprofits, meanwhile, spent an additional $6.5 million in the race.
West's campaign committee ended March with nearly $143,000 in the bank and no debt.
The former congressman also operates a political action committee, the Allen West Guardian Fund, which reported less than $9,000 cash on hand through December.
FALLS CHURCH, Va. — The woman who helped free an entire community from a toxic dump, literally rewriting environmental laws in the process, was so shy at the start of the struggle she tried to hide behind a tree when neighbors called on her.
Lois Gibbs took to the stage that day 35 years ago, in the seemingly idyllic community of Love Canal, N.Y., and began to find her voice. Transforming herself from homemaker to hell-raiser, she helped convince then-President Jimmy Carter to come to town in 1980 and remove 900 families from a 21,000-ton toxic dump. Earlier that year, Gibbs and her neighbors held two Environmental Protection Agency officials captive in a ploy to get the president’s attention. It worked.
Long before Erin Brockovich became a movie, Gibbs helped secure an environmental victory of greater heft. Love Canal’s war against the toxins under its feet prompted the federal government to create the Superfund cleanup program and earned Gibbs the Goldman Environmental Prize.
Today she is still in the fight as executive director of the Center for Health, Environment & Justice, a nonprofit squired in a third-floor corner office in a nondescript building in Fairfax County, Va., a few miles from Washington, D.C. A tiny gray sign hangs outside the door, betraying no sense of the history inside.
Aged photos cover the walls and floors alongside stacks of environmental reports. One giant picture shows Gibbs aside President Carter, moments after he announced the relocation pact. Another photo shows a 3-year-old boy wearing a T-shirt announcing: “Love Canal Guinea Pig. Used by New York State and federal government.” Another picture — published by Today’s Suburban Woman magazine in 1979, a year into the struggle — shows Gibbs clutching her daughter in front of a boarded-up building.
These aren’t museum pieces, but reminders of a journey. Across the country, other communities, sickened by pollution but bereft of know-how, ring the Center for Health, Environment & Justice.
“I see myself in the people who call,” Gibbs, 61, says today. “These women call up and say ‘Nobody understands me.’ I can relate to them. I see myself in exactly the same place. If I don’t have that connection to the people, I would just walk away. ”
From dream town to toxic dump
Gibbs began finding that connection in 1978, as she went door to door in Love Canal after learning the community sat atop a landfill of toxins. “Who would build a school on top of a dump? Who would build a playground on top of a dump? And why didn’t anyone tell me?” she asked.
The discovery ignited a woman who, growing up in Grand Island, N.Y., 15 minutes upstate from Buffalo, busied herself sewing draperies and aspiring to be a housewife. In Love Canal, her vision took root. Her husband worked at the Goodyear plant and they had two children, Michael and Melissa. This neighborhood, just miles from Niagara Falls and her childhood home, was filled with the noisy chorus of kids, two churches and mom and pop shops. Gibbs walked her children to the 99th Street Elementary School and to the playground next door each day.
Michael was born just before the family settled into a three-bedroom home on 101st Street in 1972. Healthy at birth, Michael started getting sick not long after they moved in, and each ailment became more serious. His asthma led to pneumonia, which was followed by a urinary tract disorder, and then a seizure disorder. Finally, a doctor told Lois her son had an immune system problem. Melissa, conceived in Love Canal and born three years after Michael, developed a rare blood disease. Gibbs searched for clues, but found none; she didn’t even allow soda in the house, but her children could not shake their sicknesses.
Then, one day in 1978, the Niagara Falls Gazette published a story about toxic dump sites cluttering the region. Love Canal was one, and the news screamed from the page: 21,000 tons of toxic waste had been buried next to the school property, underneath the playground. The now-defunct Hooker Chemical Co. had sold the site to the school board 25 years earlier, for $1. “Oh, my God!” Gibbs thought, reading the Gazette. “Every single day I took my children to the playground to play.”
Pressing to move her son to another school, Gibbs won an audience with the school board superintendent. The school chief settled into an oversized leather chair behind a broad, shiny wood desk. He seated Gibbs in a school desk normally used by kids. Sunken in her seat, she slid two doctors’ notes across the desk saying her son’s sickness could be tied to the dump, she said.
The superintendent glanced at the notes, then slid them back. “‘We’re not going to do that because of one hysterical housewife with a sick kid,’ ” he said, as Gibbs recalled it. “ ‘Well, if your kid is so sick, why don’t you go home and take care of him? Why are you running around to City Hall and the school board?’ ”
Tears streamed down Gibbs’ face. “All of a sudden, I became the bad guy.”
At home, her Irish-Catholic temper began to burn. Raised on Love Road in Grand Island, one of six children of a stay-at-home mom and union dad, Gibbs was taught to vote at election time and fly the American flag. Now, as she raised two sick children in a town smothered in waste, the government had turned its back. “After I got sad, I got mad,” she says, recalling the conversation that helped propel her on a lifetime of activism. “Don’t ever tell me I’m a bad mother.”
When neighbors answered her knock, Gibbs opened up about her children’s illnesses. In living room after living room in Love Canal, neighbors shared that they also had sick children. “It wasn’t until I went door to door that they started saying, ‘My son has asthma too, or my daughter has epilepsy,’ ” Gibbs said. “Women talked to me about birth defects.”
Residents began paying closer attention to evidence before their eyes. One couple grew squash so huge it could win prizes at a community fair; now they worried toxins bulked it up. Kids dubbed a local creek “Beverly Hillbillies” — after the show about a family that struck riches in black gold — because they could stick a piece of wood in the water and it would come up slimy black. Rocks on the ground were so explosive they would pop like firecrackers if kids threw them against a wall.
One afternoon, a child stuffed rocks in his pocket and began running home when, suddenly, the rocks caught fire and burned him severely, Gibbs said. With each story, the community began to absorb the larger picture.
“She was like a hurricane and we just kept going,” said Luella Kenny, a fellow Love Canal resident-turned activist who serves on the board of the Center for Health, Environment & Justice. “She was a housewife, and there’s nothing wrong with being a housewife, and she did not have all of this shall we say Wall Street and Washington know how the politicians had and the Wall Street investors had.”
Instead, Kenny said, Gibbs possessed a “hidden talent she wasn’t even aware of. But when push came to shove and your children are being threatened, I think you find that energy that you are going to protect them, for heaven’s sake.”
Her son, Jon Allen Kenny, the only of her three children born at Love Canal, died at age 7 in 1978 from kidney failure.
Another day, Kenny was showing health officials her backyard when a bird flew into the creek, sipped some water, and plopped down dead, she said.
Among the toxins brewing in the underground cesspool: A mix of halogenated organics, pesticides, chlororbenzenes and dioxin, according to EPA records. The community linked the chemical waste to failing health, producing charts showing high rates of miscarriages, crib deaths, birth defects, kidney and urinary failings — and nervous breakdowns.
As the evidence mounted, Gibbs pressed for answers, thinking back to the preaching of her father, a war veteran and bricklayer for Bethlehem Steel. “‘The system will work, if you play by the rules.’ ”
In the spotlight
As she made the rounds, Gibbs kept searching for someone to emerge as the face behind the neighborhood’s mission. “Where’s the leader?” she wondered. “I’m a housewife of sick kids. My job is not to become a community leader.”
On Aug.2, 1978, the spotlight found her. That day, after gathering hundreds of signatures on a petition demanding that the state close the 99th Street School, Gibbs and a neighbor piled into Gibbs’ green Cutlass Supreme convertible and drove five hours to the capital in Albany.
As they arrived, petitions in hand, light bulbs went off and commotion filled the air. “Are you Lois Gibbs? Are you Lois Gibbs?” reporters asked.
Serendipitously, New York health officials were holding a press conference, declaring a state of emergency in Love Canal and ordering the 99th Street School closed. The state health commissioner was recommending relocation for pregnant women or parents with children under two living on the two streets nearest the landfill. New York directed Niagara County to clean the site. The state said it would help residents find temporary housing — but not pay for it — and families could return after the cleanup.
Back in Love Canal, the state’s announcement ignited fiery protests. Why move just the closest streets? What about parents with sick three-year-olds? “It was a kind of running joke,” Gibbs recalls. “If you get pregnant, you get out. It’s pretty pathetic.”
When she returned from Albany that night, neighbors were burning mortgages in a barrel. As Gibbs stepped from her Cutlass, homeowners called her to the stage. She tried to hide behind a tree. Spotting her brother-in-law, she sought advice. His counsel: Call a meeting. Gibbs gathered her strength, took to the stage and — making the first public speaking appearance of her life — announced that everyone would meet in the following days.
At that meeting, the community elected Lois Gibbs president of the Love Canal Homeowners Association. Suddenly, she felt the burden of 900 families on her back. It was one thing to fight for your own children, but another to know your decisions impacted thousands. “Here’s this huge burden,” she said.
Her solution: To make the homeowners association the most democratic organization on earth, with 50 street representatives, each responsible for fanning out to different corners of the community. Church leaders took on some roles, activists others. No decision was made unless the majority agreed. This democracy was her blanket — and helped shield her when, a year into the struggle in 1979, some neighbors, frustrated at the slow pace of reform, pressed for a new leader.
In a meeting room packed with 500 residents, one group shouted to replace Gibbs. Another said she should stay. The session threatened to veer into hysteria. Sitting at the head of the room, Gibbs thought: What would my mother do? She imagined two children fighting and pictured a mother taking away the toy at the heart of the struggle.
She took the microphone. “My first question is, how many people like blue?” she asked. Bewildered looks filled the hall. Slowly, a few hands reached upward.
“How many people like red?” she asked. Another cluster raised theirs.
“Look,” Gibbs said. “Everybody has a different opinion.”
Her tactic worked. The room settled into calm. Turning to her blanket once more, Gibbs cited the association bylaws, which laid out the process the homeowners needed to follow in order to elect a new leader. It never happened.
Instead, the residents pulled closer. “I just thank God that we had Lois at the time,” said Kenny, her former neighbor. “You just had never heard of people being able to take over and be able to win and to beat the government.”
A new face comes to town
As the fight evolved, a new face arrived in October 1978: The state tapped Stephen Lester, a Harvard-trained environmental scientist, to be a technical adviser to the residents of Love Canal.
Lester heard stories about the shy housewife who had never spoken publicly before. But now, sitting before him was someone entirely different. His first impression of Gibbs: “Hotheaded.”
“She was a fiery fighter,” Lester recalls. “She was very emotional, very opinionated, very active in the community. One of the very first things she told me was that the state of New York was lying to the public and they were hiding information and I couldn’t trust them. So I needed to listen to her and to the community.
“When I met the state Health Department, I was told Lois was very emotional and she lies to the public and makes things up. These two sides clearly don’t like each other. I decided I wouldn’t take sides.”
A month into his assignment, Lester said, “I quickly realized that Lois was telling more of the truth than the state people were.”
Evidence of harm continued to shake the community.
In 1980, the EPA issued a study showing that the chemicals in question could trigger genetic damage for future generations. In other words: That the community’s children could be sickened, and their grandchildren too. Yet the federal government still resisted pleas to move everyone out.
“That was the straw that broke the camel’s back,” Gibbs said. Her neighbors “just went crazy.” Housewives in pink hair rollers rocked cars in the streets one Saturday, she said. Neighbors poured gasoline on one lawn, spelling E-P-A, and lit it afire. “That’s when you knew you no longer had control,” Gibbs recalls. “It was scary.”
As the lawn smoldered, two EPA officials were holed up in a hotel nearby. Gibbs invited them to come to an abandoned home, where residents were meeting, to talk about their study.
When the officials stepped in, a communal brainstorm built up: Let’s hold them hostage. Standing shoulder-to-shoulder, the residents blockaded the EPA spokesman and scientist from leaving.
The FBI swooped into Love Canal and shut off outside access to the phones. The scene put the spotlight just where the community wanted it — upon President Carter, deep in a rough re-election campaign. The nation would see what the sitting president would do.
Six hours later, residents let the EPA men go, but they gave the president four days — until noon Wednesday — to act. Or else. Gibbs and her neighbors never knew what “or else” was. They prayed their spur-of-the moment deadline would work.
Convinced the FBI would lock them up for taking federal officials hostage, some residents went to bed fully clothed. “I didn’t want to go to jail in my jammies,” Gibbs said.
The feds never stormed their homes. But two days later, the White House agreed to temporarily relocate all Love Canal families.
“This is not an ordinary situation,” an EPA official announced May 21, 1980. “This case presents special circumstances warranting this extraordinary action. The studies completed to date are sufficiently suggestive of a threat to public health … ”
On Oct. 1, 1980, Carter came to town to cement a permanent relocation. As Carter spoke, Gibbs stood in the audience. There was a problem. Interest rates had skyrocketed, and homeowners worried they’d be underwater in their new homes. They pressed Gibbs to get the ear of a president flanked by Secret Service agents.
For a moment, Gibbs sat quietly. Then she made her move. Secret Service agents stopped her. “I’m not going to go away, and if you take me away I am going to scream,” she recounted. “How’s that going to look, Lois Gibbs taken out screaming because they wouldn’t let her talk to the president?”
The officials let Gibbs to the stage, where she turned to the president and whispered: “Can we talk about low interest loans?”
He turned to the activist, and said yes, they could talk about loans. He asked if she had heard of the Superfund program. That moment, captured in a giant black and white picture, is a keepsake Gibbs keeps on display today, leaning against the wall at the CHEJ.
In all, more than 900 families were moved out, 350 homes were demolished and the school torn down. The fight helped spur the Superfund program, in which government dollars clean up toxic sites across the U.S.
Carter lost his re-election bid to Ronald Reagan. But in his final State of the Union address in 1981, he cited Love Canal’s resonance. “The regulations establish comprehensive controls for hazardous waste and, together with vigorous enforcement, will help to ensure that Love Canal will not be repeated,” he said.
In 2004, Love Canal was officially removed from the Superfund list, though some residents still raise environmental concerns. "Love Canal taught us that we needed a mechanism to address abandoned hazardous waste sites, especially those that posed a threat to people's health," Jane M. Kenny, EPA's Regional Administrator, said at the time. "Decades later, Love Canal has become a symbol of our success under Superfund.”
A new mission
Gibbs formed the Center for Health, Environment & Justice in 1981, and in the years since has traveled to every state except Alaska. The group’s goal is to help communities face off against industry and government — and to flee pollution, just as people in Love Canal had. The organization has produced a 43-page guide — Relocation: Getting Organized and Getting Out (Go Go) — that offers how-to advice for communities new to the environmental battleground.
Victories don’t come easily in a landscape where industry flexes political muscle, governments move slowly and communities have little more than their wits.
In every stop, she asks: “What can you do to make them uncomfortable? I try to convince them that the more people you have the more power you have. At Love Canal we won because we turned out 550 people at every meeting.”
The Center’s science director is Stephen Lester, the same expert hired by New York to work in Love Canal. He is also Gibbs’ second husband. Married in 1984, they have two children along with Gibbs’ two children from her previous marriage.
“Lois is most comfortable in the communities,” said Lester. “She’s got eight balls in the air, and she’s going to a community on a weekend when she doesn’t have to. Her response has always been, ‘If I don’t go to these communities, then I can’t do this other stuff that keeps this organization going.’ ”
Recently, she traveled to Texas — to visit a row of refineries in Corpus Christi and discuss children’s school health concerns in Austin. Later she was in Annapolis fighting hydraulic fracturing.
In February 2012, Gibbs traveled to Wilmington, N.C., at the request of activists fighting to block construction of a cement plant proposed in the coastal city.
Gibbs visited for 24 hours, making three presentations. Her main message to organizers: To empower the citizens most likely to be harmed by the cement plant. Until then, the prime organizers were pushing the fight largely by themselves. But now, here was the mother of Superfund saying the larger power came from the people.
“She just changed the way we viewed our citizens,” said Sarah Gilliam, coordinator of the Stop Titan Action Network, who had invited Gibbs to Wilmington. “It was really just a giant light bulb going off for me.”
When she speaks to communities, Gibbs paces in front of the podium, speaking in common sense prose. “This is a big company. They’ve got lots of money and you don’t,” she told the residents in Wilmington.
Gilliam had studied Love Canal’s story while an environmental policy student in the Master’s program at UNC-Wilmington. Now, with the community’s struggle hitting dead-ends, she turned from the history books to the real thing.
“Before she came down here I had her up on this fake pedestal,” Gilliam said. “And when I met her she was just so real. … We’ve got this new mantra where we’re channeling Lois.”
Oil companies should phase out the use of a highly toxic acid that places millions at risk, a new report from the union representing many refinery workers says.
The report from the United Steelworkers cites data gathered and analyzed by the Center for Public Integrity for a 2011 story that found more than 16 million Americans live in the potential pathway of hydrofluoric acid (HF) if it were released in an accident or a terrorist attack.
The union’s report, drawing on the results of a survey of its local officials at 23 refineries that use the acid, says both regulators and oil companies have failed to ensure that it is handled safely and recommends steps that could protect workers and the public as refineries transition away from HF.
Officials at 18 of the 23 refineries reported a total of 131 accidents or near-misses involving HF during the previous three years.
“There must be a fundamental change in the oil industry’s use of HF,” the report concludes. “[Use of the acid] as it is currently performed in U.S. refineries is a risk too great, but that risk can be reduced and ultimately eliminated.”
The American Fuel and Petrochemical Manufacturers, a trade group, said Monday it had not yet seen the report. However, it said that "refiners have used HF safely for more than 70 years," and "switching from HF may either not be feasible or could simply serve to just shift risk to other parts of the supply chain."
Oil refiners use HF to boost the octane rating of gasoline. The acid is an efficient catalyst, but it also has the potential to form a cloud that can travel long distances, sickening or killing those in its path.
The Center’s 2011 examination found that 50 of the nation’s refineries use HF, despite the existence of safer alternatives. The Steelworkers’ report notes that two options – a solid acid catalyst and an ionic liquid alkylation process – would virtually eliminate the risk. Both have been used in pilot projects, but U.S. companies have yet to adopt either.
Recent HF accidents have sparked concern. Federal investigators have twice deployed to the Citgo refinery in Corpus Christi, Texas, since 2009 in response to accidents that unleashed the acid. Last December, a worker at the Valero refinery in Memphis, Tenn., died after being exposed to HF.
The Steelworkers’ survey asked teams of local union officials to evaluate their refineries’ handling of HF and their ability to respond to an accident. “[Local officials’] overwhelming verdict is that the current measures preventing and mitigating a major HF release are simply not good enough,” the report found.
Local officials rated a number of key safety measures as deficient. Equipment wasn’t properly maintained. Information about the danger wasn’t conveyed adequately to workers, especially those outside the specific area using HF. Emergency response systems and training were lacking.
The report also recommends stronger oversight by regulators. Both the Occupational Safety and Health Administration and the Environmental Protection Agency should better use their authority to police facilities using hazardous substances, the report says.
The report suggests the government address HF and other dangerous substances by requiring companies to consider or use “inherently safer technologies” – substituting less risky substances and processes for more hazardous ones. The issue has been the subject of debate for years, with advocates arguing that such substitutions could be mandated by the EPA under the Clean Air Act or by Congress in the Chemical Facility Anti-Terrorism Standards legislation.
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