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Super PAC forms to elect liberal women governors

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A former EMILY’s List official has launched a new super PAC to help elect liberal women governors.

Kate Coyne-McCoy has registered the “American LeadHERship PAC” with the Federal Election Commission, according to documents filed with the agency Tuesday.

In a telephone interview, Coyne-McCoy told the Center for Public Integrity that creating a super PAC would be the most effective method to aid female gubernatorial candidates.

“To compete in today’s political environment, that’s the tool you need,” Coyne-McCoy said.

Her group will be “dedicated to increasing the ranks of progressive women in governors' seats across the country,” according to its website, which notes that nearly half of U.S. states have never elected a female governor.

The super PAC’s website also plays up recent state-level fights over abortion and reproductive rights.

“Battles over what we thought were long-settled women's rights have erupted across the country and are being fought in state legislatures,” the website states. “But today, these laws are being decided — almost exclusively — by men.”

This month, Republican Govs. Scott Walker of Wisconsin and John Kasich of Ohio each signed contentious anti-abortion bills into law. And last month, Democratic Texas state Sen. Wendy Davis gained national attention as she successfully filibustered proposed abortion regulations — although the measures are again moving forward. (Some Democrats in Texas are now calling for Davis to consider a 2014 gubernatorial bid.)

Coyne-McCoy declined to identify any particular gubernatorial races that her super PAC would target — or specific fundraising plans.

This year, there are two gubernatorial elections on the docket.

Incumbent Republican Gov. Chris Christie of New Jersey is seeking to fend off a challenge from Barbara Buono, the Democratic leader in the state senate. And in Virginia, Republican Attorney General Ken Cuccinelli and former Democratic National Committee Chairman Terry McAuliffe are vying for the state’s top job.

In 2014, 36 states will hold gubernatorial elections. Of those states, 23 of the gubernatorial seats are in Republican control while the other 13 are held by Democrats.

The only Democratic female governor up for re-election next year is Gov. Maggie Hassan of New Hampshire.

On the Republican side, three women are eligible to run for another term: New Mexico Gov. Susana Martinez, South Carolina Gov. Nikki Haley and Oklahoma Gov. Mary Fallin.

Over her career, Coyne-McCoy has trained thousands of women candidates in the United States and abroad.

She currently heads a Rhode Island-based political consulting firm she formed last year called Campaign Fixer KCM Consulting.

Previously, she served as the executive director of the National Coalition for Accountability in Political Spending, which aims to bring more transparency to corporate political activity, and she worked as a regional director for EMILY’s List, a group that aides Democratic women running for federal office who support abortion rights.

Coyne-McCoy was also as the executive director of the Rhode Island chapter National Association of Social Workers from 1991 to 2002. In 2000, she made a run for office of her own as a Democratic candidate in Rhode Island’s Second Congressional District, but she did not advance past the primary.

EMILY’s List itself also operates a super PAC, called “Women Vote!” which, in 2010, was among the first political committees to use large contributions from donors to expressly call for the election of federal candidates.

Ahead of the 2012 election, Women Vote! spent nearly $8 million on behalf of its preferred Democratic candidates, according to federal records.

 

 

Kate Coyne-McCoy leads a training session for Democratic women candidates in 2007.Adam Wollnerhttp://www.publicintegrity.org/authors/adam-wollnerhttp://www.publicintegrity.org/2013/07/10/12946/super-pac-forms-elect-liberal-women-governors

FEC nominations moving forward

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The Senate Rules and Administration Committee will on July 24 conduct a confirmation hearing on President Barack Obama's two new nominees to the Federal Election Commission, three government officials familiar with the proceedings tell the Center for Public Integrity.

The hearing, if conducted as planned, means the nominations could move forward to the full Senate before the body recesses on August 2 for a five-week summer break.

Committee members may vote to approve or reject the nominees —  Lee E. Goodman, an attorney at law firm LeClairRyan, and Ann Ravel, chairwoman of the California Fair Political Practices Commission — or forward the nominations to the full Senate without recommendation.

Obama nominated Ravel and Goodman on June 21, as the Center previously reported.

Senate Rules Committee official Sharon Larimer said the committee, of which Sen. Chuck Schumer, D-N.Y., is chairman, has not officially announced a hearing date. Any formal hearing announcement would come at least one week in advance of its scheduled date, Larimer added.

If the Senate Rules Committee approves Goodman and Ravel, the full Senate must confirm them — something it failed to do for labor lawyer John J. Sullivan, Obama's only other FEC nominee. Sullivan withdrew himself from consideration in 2010 after waiting 15 months for the Senate to vote on his nomination, which the Senate Rules Committee unanimously supported.

The FEC's five remaining commissioners continue to serve in "holdover status" despite each of their six-year terms having expired. Goodman is slated to replace Vice Chairman Don McGahn, a Republican appointee whose term expired in 2009.

A sixth, Democratic appointee Cynthia Bauerly, resigned in February to become deputy director of workforce development at Minnesota's Department of Employment and Economic Development. Ravel, if appointed, would fill her former slot.

Campaign finance reformers and government watchdogs have routinely panned the FEC as dysfunctional under Obama's watch, with commissioners frequently deadlocking on high-profile cases before them.

The current commissioners' working relationships are, by their own acknowledgement, also strained, with some rarely ever speaking to one another.

 

 

Dave Levinthalhttp://www.publicintegrity.org/authors/dave-levinthalhttp://www.publicintegrity.org/2013/07/11/12948/fec-nominations-moving-forward

Impact grows for Center's international focus

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The International Consortium of Investigative Journalists has this goal: to be the world’s best cross-border investigative reporting enterprise. ICIJ is an active global network of 160 reporters in more than 60 countries who collaborate on in-depth, multi-nation investigative projects.

We tackle tough international issues involving systemic global problems that call out for exposure. We seek to hold powerful people and institutions accountable. While we are not an advocacy group, we know that our work is seen by millions and used by media, NGOs and advocates worldwide to both illuminate issues and trigger action that can bring about solutions.

ICIJ is perhaps best known for our recent investigation into tax havens. Secrecy for Sale: Inside the Global Offshore Money Maze is the largest journalistic collaboration in history, involving more than 100 journalists working in excess of  50 countries. This ongoing project has already had more than 20,000 media citations worldwide.

For this offshore leaks project, ICIJ is analyzing some 2.5 million files of leaked data totaling more than 260 gigabytes, including corporate files, emails, account ledgers, and other records that show cash transfers, incorporation dates and links between individuals and companies. The leaked files illustrated how offshore financial secrecy has spread aggressively around the globe, allowing the wealthy to avoid taxes, fueling corruption and economic woes in rich and poor nations alike.

But it’s hardly the first time that ICIJ’s work has had a measurable impact:

  • Island of the Windows and Mystery in the Fields exposed an undiagnosed malady that is killing tens of thousands of men working in sugar cane fields in Central America, Sri Lanka and India. They are dying of a chronic kidney disease, yet governments and the sugar industry have done little to  respond. Because of ICIJ’s investigative reporting, the Costa Rican government launched a study into the causes of the disease and one of that country’s biggest sugar producers said it is revamping its worker health and safety policies. 
  • Skin and Bones, an investigation into the unregulated, billion-dollar global trade in human tissue, produced an immediate response from the World Health Organization. WHO pushed ahead with plans to create a coding system to track human tissue traded for transplants and ingredients in drugs to improve safety and prevent illegal collection. In addition, the British medical journal The Lancet warned about the dangers of “profiteering” from the international trade in human tissue and the lack of sufficient regulation worldwide – echoing the findings of ICIJ's investigation. There were numerous criminal charges filed in the Ukraine and tissue collection in that country was suspended.
  • Dangers in the Dust: Exporting an Epidemic was a global ICIJ investigation into the rising use of asbestos in Brazil, Mexico, Japan, China, India and other countries. ICIJ revealed that asbestos producing countries Russia and Canada have spent nearly $100 million to promote asbestos use globally, even though it is a known carcinogen and may cause up to 10 million deaths by 2030—largely in the developing world. The series prompted the Canadian parliament to debate this issue and reconsider its pro-asbestos global lobbying efforts.
  • Smoke Screen, in which a dozen ICIJ reporters followed Big Tobacco’s entry into the markets of emerging economies, revealed the methods employed to increase smoking in the developing world. This latest investigation built on our earlier work about the illicit transport of tobacco, which represented   one of the first-ever investigations into the participation of major tobacco companies in the global smuggling of tobacco products. As a result of our probe, the major tobacco companies pledged not to participate in these smuggling and tax-avoidance schemes as part of their international trade.

Founded in 1997, ICIJ was launched as a project of the Center for Public Integrity to extend the Center’s style of watchdog journalism, focusing on issues that do not stop at national frontiers: cross-border crime, corruption, and the accountability of power. Backed by the Center and its computer-assisted reporting specialists, public records experts, fact-checkers and lawyers, ICIJ reporters and editors provide real-time resources and state-of-the-art tools and techniques to journalists around the world.

Globalization and development have placed extraordinary pressures on human societies, posing unprecedented threats from polluting industries, transnational crime networks, rogue states, and the actions of powerful figures in business and government. The recent success of ICIJ is a testament to its vital role in the international arena at a time when the need for global investigative journalism has never been greater. 

 

Until next week,

Bill

Clinton supporter suspected of illegal donations

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Employees of a Washington, D.C.-based accounting firm that federal prosecutors called an “assembly line for illegal campaign contributions” donated more than $500,000 to federal candidates and committees over the past 10 years, including nearly $50,000 to Hillary Clinton’s 2008 presidential campaign, according to a Center for Public Integrity review of records.

An employee and a consultant for the firm, formerly run by Jeffrey Thompson, pleaded guilty last month in the U.S. District Court for the District of Columbia to making so-called straw donations to several federal and D.C. campaigns. The two men — Lee Calhoun and Stanley Straughter — made donations in their names and their family members’ names and were then reimbursed by Thompson or his firm, Thompson, Cobb, Bazilio & Associates.

The charges stem from a federal investigation of the 2010 campaign of Washington, D.C., Mayor Vincent Gray. At the center of the probe is Thompson, who has been implicated by prosecutors as the financier of an illegal, off-the-books $650,000 “shadow campaign” that federal prosecutors say helped get Gray elected.

An analysis of campaign finance records provided by the Center for Responsive Politics found that Thompson and other donors who listed the accounting firm as their employer have given at least $514,350 to federal candidates and political action committees since the 2002 campaign cycle, including $36,900 from Calhoun, the employee who pleaded guilty last month.

The biggest beneficiary of those funds was former Secretary of State Hillary Clinton, whose campaigns took in $50,400. Clinton’s presidential campaign committee received $40,300 from employees at Thompson’s firm in November 2007, when she attended an intimate fundraiser at the company’s headquarters in downtown D.C., according to three people who were at the event.

Other recipients include President Barack Obama ($14,500 in the 2008 cycle), former Democratic presidential candidate and Secretary of State John Kerry ($20,000 in the 2004 cycle), former Republican presidential candidate Sen. John McCain ($13,800 in the 2008 cycle) and Senate Majority Leader Harry Reid ($9,600 in 2009).

Thompson himself made political contributions totaling at least $215,000 in that same period.

A modest amount of additional funds from donors at Thompson’s firm are not included in the total because some campaign records do not indicate the donor’s employer.

Federal and D.C. campaign finance laws limit how much an individual can contribute to a candidate’s campaign, so deep-pocketed contributors sometimes use straw donors to circumvent those limits illegally. Federal law also prohibits corporations from making donations to candidates for federal office.

"For a decade, the firm and its CEO made illegal campaign contributions through straw donors to an array of federal and D.C. politicians," U.S. Attorney Ronald Machen said in a statement following one of last month’s guilty pleas. "The firm used a special accounting system to keep track of the thousands and thousands of dollars it was plowing into political campaigns."

Thompson sold his majority stake in the firm last year. The company, now renamed Bazilio Cobb Associates, issued a statement last month saying that its "former CEO may have violated federal campaign law by giving directions to reimburse, with his own funds or with corporate funds, employees and others who made such contributions."

The two guilty pleas came a year after a woman who did public relations work for Thompson — Jeanne Clarke Harris — also pleaded guilty to making illegal straw donations on Thompson’s behalf.

Thompson’s home and offices were raided by the FBI last year and court records indicate he is under a grand jury investigation. He has not been charged with any crime and has been identified only as “CO-CONSPIRATOR #1” or “EXECUTIVE A” in court records. Thompson’s lawyer, Brendan Sullivan, did not respond to a request for comment.

A spokesman for the U.S. Attorney’s Office declined to comment because the investigation is ongoing.

‘They’re pals’

The fundraiser Thompson threw for Clinton in November 2007 took place as Clinton was in the middle of a pitched battle with Obama and former North Carolina Sen. John Edwards for the Democratic Party's presidential nomination. There were about 20 people at the fundraiser, according to three attendees.

Two contributors who were at the fundraiser, but did not want their names publicly associated with Thompson’s political giving, say Thompson and Clinton are on a first-name basis and both gave speeches at the fundraiser detailing their lengthy friendship.

“They’re pals,” said one contributor.

The other added: “Jeff was all in for her.”

A spokesman for Clinton, who is often mentioned as a potential contender for the 2016 presidential race, did not respond to repeated requests for comment.

Two months prior to her appearance at Thompson's firm, Clinton's campaign had promised to carefully vet major fundraisers after it returned about $850,000 worth of contributions associated with two potential straw donation schemes, according to the Wall Street Journal and other media reports. Two major Clinton donors associated with those donations, Norman Hsu and William Danielczyk, were later convicted of campaign finance violations.

Most of the donations from employees of Thompson’s accounting firm to Clinton came on three days: November 14, 2007, November 30, 2007, and January 31, 2008. In addition, several of Thompson’s business associates also made contributions on those days, making Clinton’s total haul from people with ties to Thompson more than $110,000 on those three dates alone.

Straughter and Harris are listed as giving a combined $9,200 to Clinton. Employees of D.C. Chartered Health, which was owned and controlled by Thompson at the time, gave $13,500 to Clinton on those dates, campaign finance records show. And several others with financial ties to Thompson — his hairdresser; his massage therapist; and several consultants and their family members and employees — together contributed more than $40,000 to Clinton’s campaign on those dates, campaign finance records show.

‘Shadow campaign’

Thompson, an accountant by training, was until recently a major power player in D.C. local politics. Some associates called him “governor” as a nod to his outsized, behind-the-scenes political power. While he was at the helm of Thompson, Cobb, Bazilio & Associates, the firm received more than $50 million in D.C. government contracts in the last decade. On the federal side, the firm has won more than 50 contracts worth roughly $19 million since 2001, according to USAspending.gov.

D.C. Chartered Health was a Medicaid managed-care organization that contracted with the city to provide health insurance for many of D.C.’s poor while also providing Thompson with several years of seven-figure profits. (The company was placed in receivership last year. Gray recently  proposed tapping the District government’s contingency funds to help cover $47.5 million in outstanding debts Chartered owes to health care providers.)

The troubles swirling around Thompson have only multiplied.

Harris, Thompson’s longtime public relations consultant, pleaded guilty last summer to helping run that alleged “shadow campaign” for Gray. Harris also admitted to making straw donations on Thompson’s behalf for more than a decade. The charging documents filed in federal court don’t detail all those donations but do say that in 2008 Harris, a family member, a friend and an employee gave $21,550 to federal campaigns and were reimbursed by Thompson.

Federal election law prohibits individuals from being reimbursed for making donations to federal candidates.

Last month, former D.C. Councilmember Michael A. Brown pleaded guilty to a felony bribery count as well as illegally taking $20,000 in unreported funds from Thompson via Harris to help Brown’s 2007 campaign for local office. Brown is the son of Ron Brown, who served as Secretary of Commerce under former President Bill Clinton before dying in a plane crash in 1996.

Also last month, Calhoun, the employee at Thompson’s former accounting firm, pleaded guilty to making $160,000 in illegal straw donations to D.C. and federal campaigns. He admitted to making the contributions in his and his family members’ names, then being reimbursed, with a bonus payment, by Thompson or the firm. Calhoun said $83,400 went to federal campaigns .

Thompson’s old firm issued a statement in response to Calhoun’s plea saying that an internal review found that “significant amounts were contributed to various federal and local political campaigns” by the firm’s employees, their family members and friends, at Thompson’s direction.

“This has been a very difficult time for the firm, particularly since almost all of its hard-working professionals and staff are not politically active and were not aware of certain federal campaign contribution law requirements,” the firm’s statement said.

Straughter, a Philadelphia resident who acted as a consultant to Thompson’s accounting firm, pleaded guilty last month to giving $58,600 in illegal donations at Thompson’s direction to federal politicians and another $49,000 to D.C. candidates. Straughter made the donations in his name, his family members’ names and his consulting company’s name and was reimbursed by Thompson’s firm.

Combined, the three Thompson associates who have pleaded guilty to campaign finance violations have admitted to making at least $163,550 in illegal straw donations to federal campaigns on Thompson’s behalf.

Other Big Recipients

After Clinton, the next biggest recipient from employees at Thompson’s old firm is former NAACP President and Maryland Democratic Congressman Kweisi Mfume, whose failed U.S. Senate candidacy in 2006 received $49,800.

Thompson was business partners with Mfume’s son, Kweisi Mfume Jr. The two owned a company, KMJ Development, which was formed in 2006  and is listed as having given thousands of dollars to several D.C. politicians. Mfume Jr. said Thompson was solely responsible for the company’s political donations and took outright control of KMJ development in 2009.

Two non-voting House delegates are the next highest recipients of money from employees at Thompson’s old accounting firm. Del. Eleanor Holmes Norton, D.C., has received $43,100 since 2002 for her re-election campaigns. And Del. Donna Christensen, U.S. Virgin Islands, has received $35,100. Both Norton and Christensen have recently pledged to return or give to charity some donations tied to Thompson.

Last year, Obama, Maryland Gov. Martin O’Malley, and Sen. Tim Kaine, Va., all returned or gave away some portion of Thompson-related donations their campaigns had received. Clinton’s presidential campaign, which was closed out in February of this year, did not return any Thompson-related funds, a review of Federal Election Commission records shows.

Jeffrey Thompson, right, and employees at his former accounting firm donated nearly $50,000 to the 2008 presidential campaign of Hillary Clinton. Thompson’s firm doubled as an “assembly line” of illegal campaign contributions, according to federal prosecutors. Alan Sudermanhttp://www.publicintegrity.org/authors/alan-sudermanBen Wiederhttp://www.publicintegrity.org/authors/ben-wiederhttp://www.publicintegrity.org/2013/07/12/12943/clinton-supporter-suspected-illegal-donations

IMPACT: OSHA strengthens rules for 'model workplace' program

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Companies participating in a federal program that rewards “model workplaces” with exemptions from some safety inspections now will face automatic removal after work-related deaths or particularly serious violations.

The new policy, issued by the Occupational Safety and Health Administration, comes after a 2011 Center for Public Integrity investigation found a significant number of deaths at these sites that had resulted in few consequences for the companies involved, even after inspectors found they were at fault. The workplaces often stayed in the program, remaining exempt from regular OSHA inspections.

“We want to ensure that everyone in the program is really one of the best of the best,” Jordan Barab, the agency’s second-in-command, said of the changes.

After the Center series two years ago, OSHA convened a task force to conduct a review of the Voluntary Protection Programs, known as VPP. Last August, the task force issued a report urging, among other things, an overhaul of how the agency responds to serious accidents at sites in the program.

Now, that tougher stance is formal OSHA policy. Any work-related death will result in an automatic notice of termination – a significant departure from the agency’s previous, ad hoc approach. The most serious types of violations also will lead to automatic termination, even if they weren’t uncovered during the investigation of a death. These include infractions deemed “willful” – those in which the employer intentionally broke the rules or acted with “plain indifference” toward them – and cases that would land a company in OSHA’s Severe Violator Enforcement Program, which targets employers with a history of intentional or repeated violations or a refusal to fix cited problems. The Center series identified a number of sites that had committed such violations but were allowed to remain in the program.

Companies can appeal the termination notice, and, though the agency is willing to entertain evidence that special circumstances may have been involved, Barab said, “The basic goal is to put the burden on the company to show why they shouldn’t be terminated.”

The first site that will be evaluated under OSHA’s new policy is a chemical plant in Magnolia, Ark., owned by Albemarle Corp., where a contract worker fell to his death in June, Barab said. An enforcement inspection is ongoing at the site. As of July 11, the company still was touting its VPP “Star” status on its website, despite a provision in the new policy that places sites where a death has occurred on a sort of probationary status while the investigation is ongoing. Such sites are not supposed to display the VPP flag or other paraphernalia – status symbols within many industries.

A spokeswoman for Albemarle would not comment on the investigation but said in a statement, “We are firm believers in the principles behind OSHA's Voluntary Protection Program.”

Another deadly accident at a “model workplace” just missed being covered by the new policy. A fire at ExxonMobil’s oil refinery in Beaumont, Texas, in April injured 12 contract workers, with two later succumbing to burns. OSHA is still investigating.

“We are fully supporting OSHA’s efforts to determine the root cause and ensure that a similar incident does not occur again,” a spokesman for ExxonMobil said in a statement.

The oil giant has a number of other VPP sites, including three more just in Beaumont. Barab said a decision about whether to evaluate these sites as well had not been made.

Neither Albemarle nor ExxonMobil would say whether they believed their sites should remain in VPP.

 

 

The VPP “Star” flag marks the federal government’s approval of the safety program at Valero’s Texas City, Texas, oil refinery, where technician Tommy Manis died in a December 2009 explosionChris Hambyhttp://www.publicintegrity.org/authors/chris-hambyhttp://www.publicintegrity.org/2013/07/12/12949/impact-osha-strengthens-rules-model-workplace-program

Pro-Obama nonprofit has $8.2 million quarter

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Organizing for Action, the nonprofit organization formed to push President Barack Obama’s political agenda, had an impressive quarter, raising $8.2 million, the group announced Friday.

OFA has raised $13.1 million from more than 237,000 donors since the group, which has ties to former Obama campaign officials, launched in mid-January.

The top second-quarter contributors to OFA were two major Democratic donors and bundlers for the Obama campaign in the 2012 election, Newsweb Corp. President Fred Eychaner and New York hedge fund manager David Shaw, each of whom contributed $500,000.

Eychaner was the largest donor to Democratic-leaning super PACs in the 2012 election, giving more than $14 million. That included $3.5 million to Priorities USA Action, which backed Obama’s re-election bid.

Shaw also contributed nearly $1.4 million to Priorities during the last election.

The largest individual contribution OFA received in the first quarter of the year came from New York philanthropist and longtime Democratic donor Philip Munger, who gave $250,000.

While Eychaner now appears on OFA’s donor rolls, other big Democratic benefactors in 2012, such as Jeffrey Katzenberg, James H. Simons, and Steve and Amber Mostyn, still have not given to the group.

As a 501(c)(4) “social welfare” organization, OFA is not required to disclose its donors. The group voluntarily posts the name and location of all donors who give more than $250 on its website.

OFA also collects employer and occupation information from its donors, but does not release that data to the public.

The organization refuses to accept money from corporations and lobbyists, but is willing to take contributions from unions.

Initially, OFA set its fundraising goal for the year at $50 million. After a slower-than-anticipated start, the group reportedly cut that figure in half.

One of OFA’s top priorities this year has been promoting the implementation of Obama’s signature health care law. The group launched a national television advertising campaign last month costing more than $1 million in support of the law.

OFA has also advocated for the White House’s position on immigration reform, gun control and climate change.

 

 

 

President Barack Obama calls out to people outside a campaign office in Chicago, Tuesday, Nov. 6, 2012, after a visit with volunteers on the morning of the 2012 election. (AP Photo/Carolyn Kaster)Adam Wollnerhttp://www.publicintegrity.org/authors/adam-wollnerhttp://www.publicintegrity.org/2013/07/12/12966/pro-obama-nonprofit-has-82-million-quarter

Throwaway kids: disciplined California teens struggle to school themselves

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LOST HILLS, Calif. — On a blistering May day in California’s Central Valley, most other 13-year-olds were in classrooms down the road. But Erick Araujo was under strict orders from his mother to stay inside with a U.S. history textbook.

Despite the orders, the 7th grader didn’t really have much to do. Over four days, while his buddies were finishing up the school year, Erick’s only task was to read three chapters from the book and answer, briefly, a few questions per chapter.

“Pretty easy,” the boy with braces shrugged, leafing through pages.

He had no math. No English. No science. And no other books to engage his love of history.

But this could be how Erick gets his education for months to come, at least until he’s half way through 8th grade in early 2014.

That’s because in February, Erick was expelled for a year from Lost Hills’ only junior high, A.M. Thomas Middle School,  and told to enroll at a “community school” for kids with discipline problems that is run by Kern County. But that school is 38 miles away — so far away that staff there suggested Erick’s mom put him on  independent study at home. She would only have to drive him to the North Kern Community School in Delano  one day a week, so he could get in a minimum of 4½ hours of weekly face time with an actual teacher.

For Erick’s mom, Nereida Vasquez, this seems a strange way to expect her son to fulfill his “rehabilitation plan.” Instead, she said, she feels educators have cast Erick adrift in Lost Hills, a hardscrabble town surrounded by some of the world’s richest groves of fruit and nut trees, vineyards and vegetable crops.

 “He’s already told me that he should just drop out and go to work in the fields,” an exasperated Vasquez said in Spanish, her dominant language.

Erick’s circumstances aren’t unique. Hundreds of disciplined kids his age are put on independent study in Kern County. Youth advocates say Erick’s situation typifies a troubling pattern of authorities removing students from regular school, and dispatching them to alternative campuses,  where plans sometimes seem disturbingly casual — including long stretches of stay-at-home independent study.

The 7th grader’s experience also reflects national concerns — concerns about the effectiveness of harsh school discipline and about a widening school-achievement divide between affluent children and lower-income, often Latino or black students.  

While 86 percent of white and 91 percent of Asian-American students in California graduate high school in four years, for example, just 73 percent of Latinos — who represent half the state’s school population — and just 66 percent of black students get diplomas on time.

Vasquez, already worried that her son’s grades were slipping before his expulsion, glanced at his textbook on that recent May day. “That seems like very little work he is getting,” she said. “Doesn’t it?”

Minimal expectations

Across America, alternative schools have become institutionalized as the proverbial safety net for troubled students when all else fails.

But while such campuses are certainly needed, some education experts say it’s become too easy for regular schools to “dump” kids there who might arguably benefit more from counseling, special-needs testing and more nurturing and tutoring at schools near their home neighborhoods.

In California, youth advocates say, they’ve seen more than a few cases of students like Erick — and older — put on learning plans with minimal expectations that can leave them farther and farther behind.

California’s state Department of Education doesn’t track tens of thousands of alternative school students after — and if — they return to home schools from temporary placements, so it’s hard to measure how they fare. Nor does the state require that these county-based alternative schools report how many of their students are put on independent study programs.

But the state does provide one rough estimate suggesting room for improvement.

During the 2011-2012 school year, more than one-third of the tens of thousands of students enrolled at more than 75 county community schools statewide dropped out of those same campuses.

It’s a big number. There are other alternative programs, but the state estimates county community schools alone serve about 43,000 pupils on average over an academic year in California. Most kids are low-income, large percentages are Latino or black, and many have done poorly in some, if not all, core subjects.

That’s why advocates are confounded by school plans that put the onus on many of these same kids to self-educate on independent study, sometimes with only a few hours of time with an instructor each week.

“You take a kid who has already demonstrated that he’s not being successful in conventional school, and then you impose on him the duty that he’s going to self-study, to me that just seems insane,” said Tim McKinley, a former FBI agent who is now an attorney for California Rural Legal Assistance (CRLA), a legal aid group. He is based in the Kern County city of Delano.

During the 2011-2012 school year — despite a 40 percent drop from the year before — the Kern High School District alone expelled 1,096 students. That’s more than expulsions of all students from all districts in Los Angeles County, which has nine times the number of pupils.

The pace at which Latino and black pupils in Kern are expelled and referred to alternative campuses, McKinley said, raises questions about whether they are getting an equal education, and if their constitutional rights are being violated.

In 2009-2010, the most recent year for which Kern made ethnic data available, black students represented 15 percent of all students at Kern’s Bakersfield High School, but 29 percent of those expelled. At Stockdale High School, Latino students were 29 percent of those enrolled, but 43 percent of expulsions.

Under California state law, students who get expelled from a regular school district must still be offered a public education. County schools are often the only place they can enroll. Students at county schools can opt to do independent study — but only if a parent consents.

Based on what they hear from clients, CRLA lawyers contend that it’s not hard to convince families to take the independent study option for children when parents speak limited English, are upset and tend to defer to the professional educators.

Fighting to stay in class

Back in Lost Hills, Erick said his independent study teacher was nice, and gave him a choice of textbooks to take home: history or science. He just didn’t see the instructor much this past semester — just that one day a week.

Erick’s self-study regimen began in April, more than a month after the 7th grader was officially expelled for having a knife in his backpack. Until then, he sat at home on suspension.

The school did not accuse Erick of taking the knife out at school. He said he put it there days earlier because a carload of older boys followed him one day and scared him into thinking he might need to “protect” himself. The knife was discovered after Erick’s teacher ordered him to the principal’s office to discuss provocative words on his backpack.

The law only requires that schools recommend expulsion if a student actually “brandishes” a knife.

But Lost Hills administrators, who would not discuss details due to privacy laws, said that safety concerns compelled them to expel Erick. They also claimed that “other means of correction” had been tried before. Records show he was punished for misbehavior such as talking in class, and for one fight Erick said he had when a cousin pushed him at a water fountain.

Erick’s mother — who works in fields and packing houses here — begged in two separate hearings for the Lost Hills and Kern County boards of education to reject expulsion. She asked for schools to impose a lesser punishment or different conditions on Erick so he could still remain in a classroom. She lost both times.

Out of options, she was left scrambling to figure out how to get Erick to the county school in Delano, for the rest of spring semester and again in the fall.

There is no public transit available for the nearly 80-mile round trip. She and Erick’s father are separated, and he doesn’t live in town. Neither the Lost Hills school nor the county school said they were legally obligated or could afford to help out.

Desperate, Vasquez said the only choice was independent study.

For a couple of months, Vasquez was on maternity leave with a new baby — she’s now back working full time — so she began driving Erick to Delano on Mondays, the appointed time for his 4½-hour session with a teacher. He said there were usually a few other kids there as well.

The rest of the time this past semester, Erick admitted, he usually slept late. He helped mom or a sitter take care of his baby brother. And it didn’t take long to do assignments marked down for him on a Post-it sticker.

When Erick first went to school on Mondays, he took tests on a computer. He did some multiplication — easy, he said — vocabulary lessons and worksheets. He received a math assignment once to do at home. But for most of April and May, all he was told to do was read three chapters in his history book each week at home, and answer corresponding questions. His neatly written answers ranged from a couple of words to a sentence.

He did finish the history book, which he proudly said some high school students also use.

As it turns out, Erick’s routine may not differ much from many other kids his age — kids who have also been removed from Kern’s regular schools.

Kern’s nine county community schools enrolled about 4,460 students in the last school year. Some had been expelled. Others were there for truancy, or because parents agreed to an “involuntary transfer.”

County school administrators told the Center for Public Integrity that two-thirds of these Kern students — more than 3,000 — were put on some sort of independent study. Their arrangements varied, administrators said, with some students seeing teachers once a week, some more and some on home-study only temporarily.

More than 320 of the independent study students were 6th, 7th and 8th graders.

Administrators said some parents chose self-study because travel was a problem. Other parents agreed with teachers that it was better to put children on independent study rather than in a daily class with kids with whom they didn’t get along. Some kids were put on self-study until behavior problems were resolved and they could join a class, administrators also said.

The Kern community school system requires independent study students to meet with teachers a minimum of 4½ hours a week – all in one day, if agreed. But parents are encouraged to bring kids to a school for more than one day a week, administrators added. They said students must be given material to do at home that matches the curriculum options used at regular schools. The aim is to try to give kids assignments and enough credits to advance to the next grade.

James Bartleson, president of the Kern County Board of Education, was surprised to hear that more than 320 students from 6th to 8th grade were on a self-study program.

“That’s an awful lot of students on independent study,” Bartleson said in an interview.

He’s wanted to overturn some expulsions, and keep kids in home schools, Bartleson said. But he said the county board’s power is limited if local district boards have followed laws and procedures correctly to approve expulsions.

It isn’t ideal to put some kids like Erick on independent study, Bartleson said. But if they are “good readers,” he believes they can do fairly well in these regimens.

Shadow system

Russell Rumberger, director of the University of California at Santa Barbara’s California Dropout Research Project, isn’t so optimistic.

“It’s shameful,” Rumberger said, commenting on Erick’s circumstances.

Struggling young students, in particular, should not be left to their own devices, he said, guided only by brief meetings with teachers.

“It’s exactly the wrong prescription,” Rumberger said. “Kids like that need more class time, and more time with teachers, not less.”

Rumberger also said that without more tracking and accountability, alternative education is a “shadow system” that can harbor negligence.

Byron Fairchild, an executive board member of the California Consortium for Independent Study, is quick to take issue with opinions like Rumberger’s.

The consortium collaborates with state education officials to offer training and information to educators to improve independent study programs.

“I’ll be honest with you,” Fairchild admitted. “The courts don’t look favorably on independent study.”

Fairchild, director of business for alternative education in Orange County, explained that judges get upset when kids on independent study commit a crime during school hours. But students in regular schools, Fairchild countered, can cut classes and get into trouble, too. He insisted that self-study can be just the right answer for students who are “problematic” in traditional classroom settings. Of the 8,500 students sent to Orange’s county community schools last year, he said, about half were put on independent study plans.

Even infrequent meetings with a teacher who is exceptionally caring, Fairchild said, can serve as “the hook” that inspires a student to get serious about learning.

Counties and teachers have a lot of freedom, he conceded, to set expectations and minimum hours for student time with a teacher.

But counties are subject to state codes requiring that students be given material “substantially equivalent in quality and quantity to classroom instruction” in regular schools. Outside auditors must certify annually that schools keep written self-study agreements on file, along with work samples showing that students complied with agreements.

If schools fail to keep files in order, Fairchild said, they risk being penalized for receiving state funding based on claims of daily attendance.

County community schools can collect funding based on five days’ worth of attendance for independent study students whether the kids are in a classroom or at home. And that funding, to help counties cope with troubled kids, is usually more per student than a regular school gets.

Fairchild acknowledged that it can appear that some students have little to do at home.

But he said some students are so behind academically when they enter independent study that a teacher exercises discretion not to overwhelm the student by assigning too heavy a load.

“I’m not saying all independent study is blemish-free,” Fairchild said. “There are going to be bad apples in the barrel no matter how much oversight you have.”

Paul Warren, author of a research report in 2007 for California’s nonpartisan Legislative Analyst’s Office, said the audits Fairchild described are “mechanical,” designed to root out cheating to qualify for funding rather than negligent teaching.

Warren also argued there is “no rational reason” for allowing students in county schools to be put on independent study, while students who are sent to a different, smaller system for troubled kids – district-run community day schools –are not allowed to be put on self-study.

Warren’s report featured damning conclusions that some alternative programs were “structured failure,” with low-performing students put on independent study with no clear plan to return them to regular school.

The report urged the state Department of Education to start collecting data on independent study students, but five years later, the state still doesn’t track how many students in county schools are placed on independent study, let alone their progress.

Kern County’s struggles

There’s little doubt among administrators at the Kelly F. Blanton Education Center in Bakersfield that the county campuses and their learning approaches are working for some.

Carlos Rojas, the Kern director of alternative education, said the system’s goal is “always have [students] transition back to the school that referred them. Do we have kids come back to us? Of course we do. Do we have kids that come for one semester and never come back to us? Yes, we do.”

“I feel very confident that we’re preparing kids to go back,” Rojas said. “Do I have the data that proves that we do that? Well, no. No hard data.”

This spring, county community schools shepherded about 200 students enrolled in their sites to high school diplomas. One of them, a 20-year-old named Patrick, said he was indeed grateful to his teacher for helping him. He already had a job, and the flexibility of self-study helped him finally get his diploma.

But administrators recognized that parents like Erick’s mom are not happy.

“In an ideal world you have great public transportation that the community can access,” said Steve Sanders, chief of staff for the Kern County superintendent of schools.

“When a parent tells you ‘I’m working nights and weekends, and I don’t have transportation, and I can’t get my kid there,’ ” Sanders said, “of course you feel for that family.”

Classrooms are preferable, he added, but if independent study were not available for kids, “they would have nothing.”

Out of luck in Arvin  

That’s not much consolation for Laura Martinez.

Martinez, is furious that her son, 15, was  expelled from Kern County’s Arvin High School in January and referred to the Community Learning Center county campus  about 20 miles away in Bakersfield — so far away that she and her husband had no choice, in her view, but to put Juan in independent study.

Soft-spoken and athletic, Juan said he fell victim to what he said was an Arvin High policy of expelling students if they get into two fights during the school year.

Juan, a sophomore, admitted to defending himself once when another student hit him. But the second time, he said, he hadn’t thrown a punch at all. He told school authorities that he just happened to be standing near a fight that other boys got into.

“They didn’t believe me,” Juan said.

He said a security guard who accused him didn’t actually witness the fight. Arvin High declined to comment on Juan’s case or its policies, and referred questions to the Kern High School District.

Martinez wept, recounting in Spanish how she originally thought the purpose of Juan’s expulsion hearing was to come to terms to keep him in school. The family didn’t pursue an appeal after losing because they didn’t know how to find a lawyer and were worried it would cost too much money.

In a written response, the Kern High School District didn’t address questions about Juan.

But assistant superintendent of instruction Michael Zulfa had a general comment:

“Each of the school sites carefully weighs the impact of expulsion for each student prior to determining the ultimate recommendation for that student. The family circumstances of the student are taken into account, [and] there are logistical considerations for meeting the student’s needs.”

Juan’s parents didn’t agree.

They both rise before dawn to labor all day in vineyards, so neither was in a position to drive Juan 20 miles to the county school and wait for him, five days a week, while he attended classes for 4½ hours.

Administrators of a federally funded Migrant Education Program did offer vouchers to help pay for getting Juan to Bakersfield on public buses. But Martinez didn’t feel it was safe to put Juan on a bus in Arvin alone at 5 a.m. every morning, only to have him switch buses in a neighboring town and then switch buses once again in Bakersfield.

“Maybe I’m wrong. But it’s my decision as a mother,” Martinez said. “I’m not going to put my son at risk.”

And so Juan’s parents agreed, reluctantly, to independent study. Juan’s father negotiated one day off a week from work with no pay, a hardship, to drive his son to Bakersfield for his session with a teacher.

During his once-a-week class, Juan found his teacher friendlier and more helpful than most teachers at Arvin High. But he was floundering in English and science before his expulsion. Now he’s worried he’ll be more behind when he eventually goes back to regular high school.

Since Juan turns 16 this summer, he was told, he might be allowed to finish his expulsion through next fall semester at a “continuation school” that’s closer to Arvin. Typically, these are considered last-chance schools reserved for failing kids between 16 and 18 years old who are scrambling to assemble enough credits to graduate high school.

Just before summer break from his self-study regimen, the only work Juan had to do at home for one week was to read parts of a physical education book, summarize content in his own words and answer vocabulary questions.

Juan’s family is not the only one in working-class Arvin that’s had to grapple with how to ensure their kids get educated if they’re expelled.

During the 2011-2012 school year, according to data obtained by the Center, Arvin High School expelled 56 students.

At the state Capitol, state Sen. Ricardo Lara, a Democrat from Bell Gardens, southeast of Los Angeles, said he’s alarmed by such stories.

“We don’t want to paint them all with broad brush,” Lara said of community schools. Some do a good job, he said.

But legislators could take some steps to try to strengthen parents’ rights.

Lara is the author of Senate Bill 744, which has already been approved by the state Senate and is now before the state Assembly, and subject to amendments.  

The proposal would prohibit educators from adding new criteria to “rehabilitation plans” that could keep students from leaving community schools and returning to regular campuses as originally scheduled. And while it would not apply to expelled students, the proposal would also prohibit placing truant or “involuntarily transferred” students in community schools   unless those campuses are “geographically accessible” or if home districts cover extra transportation costs.

A search for solutions

In Lost Hills, Erick’s mom said she knows he did something wrong. But she wishes educators would keep Erick in a classroom.

Erick had been failing in some classes before his expulsion. But certain subjects were capturing his interest. He liked art, and dreamed of college at an art institute in San Francisco. He also discovered a passion for history, and was proud he read The Diary of Anne Frank and earned praise for bumping up a reading level. 

After his expulsion, Erick’s biggest disappointment was missing a field trip to the Museum of Tolerance in Los Angeles. He’d like to read more books about World War II, but the only library in Lost Hills is at school — and he’s been warned not to step foot on a campus.

In a last-ditch appeal to reverse Erick’s expulsion, CRLA attorney Elizabeth Aakhus argued that Erick’s school had not adhered to relatively new state legislation requiring administrators to exercise discretion and non-punitive, age-appropriate measures to address behavior problems before resorting to expulsion for offenses that do not require it.

As Aakhus noted, the school gave Erick’s mom a referral to a community-based counseling service only after he was expelled.

The arguments didn’t work.

Harrison Favereaux, Lost Hills’ chief administrative officer, told the Center in a letter that he understands getting Erick to a school nearly 40 miles away is “inconvenient.”

Perhaps a church or neighbors could help, he said. In the fall, when Erick should be starting 8th grade, he might be eligible to get free home tutoring that could be supplied by a new funding source the district is receiving, the letter said.

“In the meantime,” Favereaux said, “Erick's parents may hire a tutor to assist him at home if they are unable to do so themselves.”

Reporter Steven Cuevas of KQED public radio's "The California Report" contributed to this story. 

 

Erick Araujo, 13, was disciplined and removed from his middle school in Lost Hills, California, through next fall semester. But he was sent to an alternative school that’s so far away – 38 miles one way – his farmworker mother reluctantly agreed to put Erick on independent study at home four out five days a week. She is worried because the 7th grader began talking about dropping out.Susan Ferrisshttp://www.publicintegrity.org/authors/susan-ferrisshttp://www.publicintegrity.org/2013/07/15/12951/throwaway-kids-disciplined-california-teens-struggle-school-themselves

Microsoft heavily funding 'small business' lobby

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A “small business” technology trade group that’s aggressively pressing Congress to ease key immigration laws is heavily funded by one of the world’s wealthiest corporations, according to a Center for Public Integrity review of company disclosures.

Software giant Microsoft Corp. gave the nonprofit Association for Competitive Technology nearly $2.5 million between July 1, 2011, to June 30, 2012, corporate documents indicate.

Microsoft also gave at least $1 million to ACT during the company’s 2009, 2010 and 2011 fiscal years — although it did not disclose the specific payment amounts.

Such payments represent a major portion of the trade group’s annual budget: ACT’s annual revenue from 2008 to 2011 has hovered between $3 million and $4 million, Internal Revenue Service documents show. The association has yet to file its annual report covering calendar year 2012 with the IRS.

ACT brands itself as “the only organization focused on the needs of small business innovators from around the world.”

An ACT spokesman did not respond to multiple requests for comment, and Microsoft representatives declined to comment on the company’s relationship with ACT.

But the trade group’s members include a few of the biggest names in  technology. In addition to Microsoft — No. 35 on the Fortune 500 list for 2013 — the association’s 5,000 members include major multinational corporations such as eBay Inc., Intel Corp., Oracle Corp. and VeriSign Inc., according to ACT’s website.

Corporations are not legally required to disclose their payments to trade associations, but some, such as Microsoft, do so voluntarily. Trade associations, which are organized under section 501(c)(6) of the U.S. tax code, are also not required to publicly identify their donors.

Intel’s voluntary corporate disclosure document did not list any payments to ACT in 2012, although the company did contribute $75,000 in 2011 and $215,000 in 2010.

Oracle and VeriSign, for example, do not voluntarily disclose payments to trade associations.

ACT has been among a bevy of tech groups lobbying heavily on the comprehensive immigration reform bill, known as S. 744, which the U.S. Senate approved last month.

Most notable among their concerns: expanding the H1-B visa program, which allows highly skilled foreign residents to work in the U.S. temporarily.

“Your support for S. 744 will allow America to better realize opportunities for innovation and job creation today, as well as secure our economic strength in the future,” read a June 20 letter to Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., that was signed by more than 100 tech executives, including ACT’s executive director, Morgan Reed.

The letter also argued that the legislation “would help ensure that America continues to be the location of the world’s most innovative and fastest growing industries — those that rely on intellectual property and highly educated talent.”

Furthermore, in late May, ACT organized a Washington, D.C., “fly-in” day, bringing 40 developers to the nation’s capital to meet with officials at the White House, Congress and the Federal Trade Commission.

The group touted this lobbying blitz as “very effective” on its website, adding that “ACT lobby efforts in the Senate helped push tech amendments to the immigration bill over the finish line.”

Reed has also stressed the importance of boosting investments in science, technology, engineering and math education for high school and grade school students in the United States, funding for which is also included in the Senate’s immigration bill.

“Simply put, our nation cannot maintain its global technology leadership with a foreign labor dependency,” Reed wrote in an April Roll Call op-ed. “Congress must facilitate a homegrown developer workforce to ensure long-term stability and growth.”

The fate of immigration reform now lies with the U.S. House of Representatives, where its prospects are uncertain. ACT, for one, is continuing to press its case.

“We look forward to progress that will lead to a truly modern immigration system,” the group said in a joint press release with other industry players urging the House to take action. “If we want next-generation industries to be founded in St. Louis instead of Shenzhen, then policymakers must seize this moment and produce legislation that all sides can support.”

Chris Zubak-Skees contributed to this report

 

 

Microsoft sign outside the company headquarters campus in Redmond, Wash.Adam Wollnerhttp://www.publicintegrity.org/authors/adam-wollnerhttp://www.publicintegrity.org/2013/07/15/12962/microsoft-heavily-funding-small-business-lobby

OPINION: echoes of the past in anti-ObamaCare ads

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CINCINNATI, Ohio—Watching Americans for Prosperity’s new anti-ObamaCare advertisement here in Ohio—one of the first states it’s being aired—took me back 20 years. Almost exactly 20 years, in fact.

I was a PR guy for the insurance industry in 1993, and I had joined forces with special interest trade associations, front groups and right wing organizations much like Americans for Prosperity (AFP)  to scare the public away from the Clinton health care reform proposal as it was being debated in Congress.

Insurance company executives didn’t like the Clinton plan because we feared it would have a negative impact on profits.  Knowing that shrinking profit margins would not motivate many folks to get behind our effort to kill the bill, we came up with the idea of getting the public to fear it for made-up reasons.

Most insurers were at the time members of the Health Insurance Association of America (HIAA), which after merging with another trade group would later become America’s Health Insurance Plans. HIAA member companies contributed millions of dollars they had collected in premiums from policyholders to finance a brilliantly disingenuous ad campaign that did exactly what we had hoped: erode public support for reform. By the time the year-long campaign ended in September 1994, Congressional support for the Clinton plan fizzled. It essentially died in committee.

To get to that result, HIAA hired the advertising and consulting firm Goddard Claussen to create a series of TV commercials based on the tried-and true FUD strategy: win the public to your side by instilling fear, uncertainty and doubt. The ads were designed to make people worry about something that would not have resulted from the Clinton plan—government run health care. (Ever hear that term before?)

While it would not have actually been a government takeover of health care, the Clinton plan would have imposed new consumer-friendly regulations on insurers  that might have coverage more affordable. Insurers would have none of it. 

All the HIAA ads featured a make-believe married couple, Harry and Louise. The first one showed the couple sitting at their kitchen table—“Sometime in the future,”  the opening screen shot indicated—with a big calculator and stacks of papers that represented were medical bills.

Louise: I thought this was covered under our old plan.

Harry: Oh yeah, that was a good one, wasn’t it?

Ominous male voice off screen: Things are changing and not all for the better. The government may force us to pick from a few plans designed by government bureaucrats.

Louise: Having choices we don’t like is no choice at all.

Harry: If they choose…

Louise:  We lose.

I recently talked about the Harry and Louise spots with one of the consultants who was trying to sell the public on the Clinton plan. He told me the campaign caught the Clinton team completely off guard.

“It was devastating,” he told me. “We could never recover after Harry and Louise.”

Twenty years later, the individuals and corporate interests behind the Americans For Prosperity commercials apparently are hoping the same tactics will somehow derail full implementation of ObamaCare — even though ObamaCare has been law now for more than three years.

On January 1, 2014, some of the most important consumer protections will become effective. No longer will insurance companies be able to charge people who’ve been sick more than people who are healthy. Or charge women more than men. And they will not be able to refuse to sell policies to people because of pre-existing conditions or to set a limit on how much they will pay out in claims.

In the first AFP spot, we meet “Julie,” presumably a young mother, who suggests that people will not be able to pick their own doctors under ObamaCare.

 “If we can’t pick our own doctor, how do I know my family’s going to get the care they need?” Julie asks.

Then, just like Harry and Louise did two decades ago, Julie raises the specter of big, bad government making decisions and eliminating her choices. “Can I really trust the folks in Washington with my family’s health care?” she asks.

As FactCheck.org pointed out last week, the AFP ad is misleading because the law will not keep Julie—or anyone else for that matter—from picking her own doctors. If anyone will have the ability to limit her choice of providers, it will be insurance company bureaucrats, not government bureaucrats.

Americans For Prosperity, which was founded in 2004, says it will spend $6 million to air the ads in Florida, Virginia, Minnesota, Nevada, Iowa, Colorado and New Mexico, in addition to Ohio. All are considered battleground states. Which leads one to think that the real agenda here is not so much to keep ObamaCare from being fully implemented as it is to persuade voters to elect politicians next year who will do what David Koch and other AFP benefactors want them to do if and when they take office.

Left, scene from the 2013 American's for Prosperity ad "Questions" and, right, a scene from the 1994 ad "Harry and Louise."Wendell Potterhttp://www.publicintegrity.org/authors/wendell-potterhttp://www.publicintegrity.org/2013/07/15/12967/opinion-echoes-past-anti-obamacare-ads

The huge drone that could not be grounded

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With large budget cuts looming in the next decade, top Air Force officials knew last year they needed to halt spending on some large and expensive programs. So they looked for a candidate that was underperforming, had busted its budget, and wasn’t vital to immediate combat needs.

They soon settled on the production line for a $223 million aircraft with the wingspan of a tanker but no pilot in the cockpit, built to fly over vast terrain for a little more than a day while sending imagery and other data back to military commanders on the ground. Given the ambitious name “Global Hawk,” the aircraft had cost far more than expected, and was plagued by recurrent operating flaws and maintenance troubles.

“The Block 30 [version of Global Hawk] is not operationally effective,” the Pentagon’s top testing official had declared in a blunt May 2011 report about the drones being assembled by Northrop Grumman in Palmdale, Calif.

Canceling the purchase of new Global Hawks and putting recently-built planes in long-term storage would save $2.5 billion over five years, the service projected. And the drone’s military missions could be picked up by an Air Force stalwart, the U-2 spy plane, which had room for more sensors and could fly higher.

But what happened next was an object lesson in the power of a defense contractor to trump the Pentagon’s own attempts to set the nation’s military spending priorities amid a tough fiscal climate. A team of Northrop lobbyists, packed with former congressional staff and bolstered by hundreds of thousands of dollars in campaign contributions, persuaded Congress to demand the drone’s continued production and operation.

In so doing, the contractor — which had revenue of $25.2 billion in 2012, more than 90 percent from the federal treasury — defied not only the leadership of the Air Force, but also the chairman of the Joint Chiefs of Staff, Army Gen. Martin Dempsey. He told the House Armed Services Committee in February 2012 that the Global Hawk “has fundamentally priced itself out of our ability to afford it.” The White House, in twomessages to Congress last year, said it “strongly objects” to the lawmakers’ demand for additional Global Hawks, but the protests were to no avail.

Northrop’s strikingly successful campaign to thwart the government culminated in a letter  this May from two influential House lawmakers to newly installed Secretary of Defense Chuck Hagel, reminding him of the requirement to buy three more of the drone aircraft. The Air Force, they complained to Hagel, had not heeded “clear congressional intent [and] explicit direction to complete the acquisition.”

The letter, whose authors – Rep. Howard “Buck” McKeon, R-Calif., and Rep. Jim Moran, D-Va. -- received a total of $135,100 from Northrop Grumman’s political action committee and employees for their election campaigns and leadership PACs since the beginning of 2009, is emblematic of the political forces that helped stoke a 117 percent jump in the Defense Department’s procurement budget from fiscal year 2001 through its peak in fiscal year 2010.

Those forces are now causing some lawmakers to resist the drawdown in military spending that President Obama and some military analysts say is needed to help shrink the federal deficit, projected to be $759 billion this year, and repair the nation’s long-term economic health.

Northrop Grumman’s political strategy “is entirely predictable — hire the right people, target the right people, contribute to the right people, then link them together with subcontractors and go for the gold,” said Gordon Adams, who served as the senior White House budget official for national security from 1993 to 1997 and has studied defense spending and procurement for more than 30 years.

“Killing a major program, in production, is rather like vampire-killing,” Adams added. “You have to drive a silver stake through its heart to make sure it is dead.”

The battle over the Global Hawk is one of many in which a major defense contractor and its influential friends in Congress have forced the military to spend money on hardware it doesn’t want. An Army proposal in 2011 to stop refurbishing the M1 Abrams tank to save $3 billion was blocked by the same House and Senate defense panels in response to the lobbying muscle of the tank manufacturer, General Dynamics.

A contractor-driven campaign “often works,” Adams said. “It eked out more F-22 [fighters] than the Air Force wanted. It extended the C-17 [transport] production line by several years as Congress ordered up 10 more aircraft beyond what the Air Force needed.”

The case of the Global Hawks Block 30s also shows how lawmakers — even deficit hawks who say they want to slash federal spending — still earmark money for favored defense projects, even though such earmarks are formally prohibited by both House and Senate rules.

In this case, the fiscal year 2013 defense authorization bill Congress passed last December and the spending bill it enacted in March require the Air Force not only to keep flying Block 30s for roughly $260 million a year through calendar year 2014, but to also spend as much as $443 million on three more. The House — which has been Northrop Grumman’s close ally in the fight — voted in June for a fiscal year 2014 defense authorization bill that extends Block 30 operations two additional years, through 2016.

Unexpected maintenance and flight problems

The Global Hawk at issue – the largest drone in the U.S. arsenal -- is a successor to a smaller Block 10 drone that the Air Force flew successfully from 2001 until 2011. Northrop Grumman hailed the Block 30 as an “unblinking eye” platform that does a better job of tracking objects on the ground for a longer period.

But in a reversal of the prescribed path in which weapons systems are designed and fully tested before going into full production and being dispatched to war zones, Global Hawks were pressed quickly into service over Iraq, Afghanistan, Libya, the Horn of Africa, Japan and Haiti while still technically under development.

The reason is that the drones were a “technology push rather than a requirements pull,” in which the manufacturer developed a new capability before combat commanders specified exactly what they needed, according to a congressional source familiar with the program. Only after the new Global Hawks were in the field “did the services find out how commanders would actually use them,” he said. Randy Belote, Northrop Grumman’s vice president for strategic communications, declined comment on this characterization.

The Block 30 models were designed to fly for 28-35 hours compared to the 10-12 hour endurance limit of the piloted U-2s.  But unlike the U-2, Global Hawks are not equipped with electronic countermeasures to defeat air defenses, and lack the U-2’s “all-weather” capability, according to congressional testimony by Air Force officials.

Moreover, the drones and their sensors have been prone to a wide range of problems, many of them blamed on the speed with which the aircraft were deployed.

To meet certain data needs, for example, Block 30s have been torn apart and rebuilt to add some sensors already present on the U-2. Built with hardwired sensors, unlike a newer, more “plug-and-play” version known as the Block 40, the Block 30 “lacks the flexibility to change with new requirements,” said the congressional source, who spoke on the condition that he not be identified.

The concurrent testing and production also “put it at increased risk of cost growth,” the Government Accountability Office said last year, and the program has twice triggered special statutory provisions alerting Congress to its cost overruns. In all, the cost of a single Global Hawk jumped by more than 150 percent, from about $88 million in 2001 to $223 million in 2012, GAO reported in March.

That record caused a special Pentagon report on June 28, examining why the defense-wide acquisition system routinely produces large cost overruns, to depict the Global Hawk in particular as an egregious outlier. “Analyzing just aircraft development contracts” such as Global Hawk, the report said, Northrop Grumman had “significantly higher cost growth” than rival behemoths Lockheed Martin and Boeing.

The program was restructured in 2011 by Deputy Defense Secretary Ashton Carter, then the Pentagon’s procurement chief, who nonetheless told Congress that its continuation “is essential to national security.” He cut the number of Block 30s to be bought and scaled back the full program’s price tag of $13.9 billion to $12.4 billion.

Meanwhile, rigorous testing from October 2010 through January 2011 led the Pentagon’s chief weapons tester to conclude that the Block 30 was unreliable. The Block 30’s “mission-critical air vehicle components fail at high rates, resulting in poor takeoff reliability, high air abort rates, low mission capable rates, an excessive demand for critical spare parts and a high demand for maintenance support,” J. Michael Gilmore said in a May 2011 report.

When flying at a near-continuous pace, the Block 30 provided less than half the required 55 percent “Effective Time On Station” coverage — the amount of time loitering over a target to gather intelligence — over a 30-day period, Gilmore said. Its sensor to identify radar and communications signals “does not consistently deliver actionable signal intelligence end-products to operational users due to technical performance deficiencies” and other reasons, he said.

As a result, Gilmore added, the Block 30 “is not operationally effective for conducting near-continuous, persistent ISR [intelligence, surveillance and reconnaissance operations].”

Bracing for congressional “impact”

Given the Block 30 troubles, Air Force officials concluded in late 2011 that they could not fly both that aircraft and the U-2 under provisions in the Budget Control Act. The U-2 already met all the military’s requirements for intelligence, surveillance and reconnaissance, while significant investment would be needed to give Block 30s the same capabilities.

The Air Force knew its decision would be controversial on Capitol Hill. “We were bracing for impact,” recalled a retired Air Force pilot who worked with the Air Force liaison office. “There are too many constituencies tied to the Global Hawk.”

“The Block 30 Global Hawk has fundamentally priced itself out of our ability to afford it when the U-2 gives, in some cases, a better capability and, in some cases, just a slightly less capable platform,” Dempsey told a House Armed Services Committee hearing on Feb. 15, 2012. “So what you are seeing there is our ability to eliminate redundancy, to continue to invest in the best value, and to avoid at every possibility redundancy that fundamentally is too expensive.”

But cost and reliability concerns took a back seat to the risk of losing jobs, said former Rep. Roscoe Bartlett, R-Md., who last year played a key role in blocking the proposed retirement of Block 30s as chairman of the House Armed Services Subcommittee on Tactical Air and Land Forces.

Bartlett, who lost his bid for re-election last fall, spoke openly about how his colleagues on the full committee “see the military as a jobs program,” something he said is not necessarily in the national interest. “How is that consistent with national security? And budget frugality?” he asked rhetorically, asserting that his colleagues often rationalize such dilemmas away.

“Everybody has to look in the mirror and not see a jerk, so they have to argue with themselves that keeping this factory going in their district is the best thing for their country, whether it is or not,” Bartlett said.

After rumors of the program’s cancellation surfaced in late 2011, Northrop Grumman activated a “Support Global Hawk” website that described the drones as “high-flying, combat-proven aircraft [that] are so robust and reliable that they’re in high demand by warfighters who fly them.”

The advocacy site, which Belote, the Northrop Grumman spokesman, told the Center for Public Integrity was set up at the request of company employees who supported the Block 30, listed all the suppliers, their congressional districts and the lawmakers who represented them. The site also offered a “Take Action” form visitors could fill in that would be emailed to their elected officials. “Please help our troops continue to receive this much-needed capability,” the site said.

Northrop Grumman also circulated fliers on Capitol Hill with a map of the country showing the locations of major Global Hawk manufacturing sites, military bases and major subcontractors. The “Global Hawk Enterprise across the U.S.” has 3,483 Northrop Grumman employees in 22 states, 303 suppliers in 36 states and almost $600 million in supplier purchases, the flier said.

It was a sales pitch that major defense contractors — and often the military services themselves — routinely circulate on Capitol Hill. “There are probably 500 floating around right now,” a House armed services aide said, referring to fliers similar to Northrop Grumman’s, emphasizing the jobs issue.

Among the 26 in-house and outside lobbyists who identified Global Hawk or surveillance issues on their lobbying reports were three well-connected former Republican aides to the House Appropriations Committee: Jeff Shockey, a former staff director; John Scofield, a former communications director; and Letitia White, a longtime aide to former Chairman Jerry Lewis, R-Calif. Also on the team was Northrop Grumman Vice President for Government Relations Sid Ashworth, who spent 14 years on the Senate Appropriations Committee staff, serving as staff director for two subcommittees, including defense.

Discussions lubricated by donations

The company also reached out to lawmakers in another familiar way — with well-timed campaign contributions. A computer analysis of campaign finance records by the Center for Public Integrity shows that the company’s political action committee gave $10,000 to the re-election campaign and leadership PAC of House Armed Services Chairman McKeon in February and March 2012, when his committee was grilling senior Pentagon and Air Force officials about the Block 30 issue in public hearings.

Barely six weeks later, McKeon’s committee approved the fiscal year 2013 defense authorization bill with the provision ordering the Air Force to keep flying Block 30s through 2014.

McKeon, whose district is home to Northrop Grumman’s Palmdale facility where final assembly of Global Hawks is done, has received at least $113,000 from the company’s employees and PAC since becoming House Armed Services Committee chairman in January 2009, the CPI analysis shows. By comparison, McKeon received only $28,950 from the company’s employees and PAC in the four years before picking up the chairman’s gavel.

A spokesman for McKeon, Claude Chafin, said he was responding to the absence of a credible Pentagon analysis supporting “the additional shedding of” assets like the Global Hawk in the midst of “the warfighter’s growing need.”

Other members of his committee also received generous support from the company while the Global Hawk’s future was up for grabs during the first half of 2012, with at least $243,000, in total, flowing into their campaigns.

Many of these checks coincided with important steps in keeping the Global Hawk Block 30 program alive. For example, the House Armed Services Tactical Air and Land Subcommittee voted on April 26, 2012 to approve its portion of the 2013 defense bill that included the provision requiring the Air Force to keep flying the drones. The following week, Northrop Grumman funneled $26,500 to seven subcommittee members, the largest one-week investment in the panel during the entire 2012 campaign cycle.

In all, Northrop Grumman employees and PAC gave considerably more in campaign contributions to the key House defense panels in the 2012 election cycle than they had in the previous one, the Center for Public Integrity’s analysis shows. Members of the full House Armed Services Committee received about $584,000, in total, during the 2012 election cycle, 46 percent more than in the 2010 cycle. Young’s House defense appropriations subcommittee received $191,000 in the 2012 cycle, an increase of nearly 50 percent.

Although McKeon was the top recipient of donations from Northrop Grumman’s employees and PAC among members of the four House and Senate defense committees, other influential House lawmakers also reaped substantial donations from the firm. Rep. C.W. Bill Young, R-Fla., chairman of the powerful House defense appropriations subcommittee, received $40,500 in campaign and leadership donations since 2009. Rep. Adam Smith, D-Wash., ranking member on House Armed Services, received $35,000 in the same period.

A spokesman for Young did not respond to repeated requests for comment. Smith said in an interview that he opposed mothballing a new aircraft “in favor of the U2 which is 50 or 60 year old technology.”

Belote, of Northrop Grumman, told the Center for Public Integrity that PAC contributions are made only at the request of lawmakers. “We do not solicit members to determine if they would like to receive PAC funds,” he said.

Belote confirmed that the Northrop Grumman’s PAC focuses on members of the four congressional defense panels — armed services and defense appropriations — and also on members of Congress whose districts include either company facilities or employees. In fact, Northrop Grumman and its employees gave almost $1.9 million to the campaigns and leadership PACs of members of the four panels since 2009, 52 percent of the total they gave to all members of Congress during the same period.

“We are very diligent in following PAC regulations and in meeting all reporting requirements,” Belote added.

A credibility problem for the Air Force

As the Air Force tried to counter Northrop’s lobbying effort in 2012, it faced a credibility problem. In early 2011, the service had initially urged that all 33 U-2s be retired and replaced with Global Hawk Block 30s, despite the drone program’s cost overruns and test failures.

“The Air Force … has done some things that were not well thought out,” said the retired pilot. He said the idea that Global Hawks could be substituted for U-2s first emerged a decade ago, when service officials were desperately looking for money to support full-scale production of the new F-22 fighter jet and thought ending the U-2 program would free up needed funds.

“Prior to that, there was never any discussion that Global Hawk could replace the U-2. There was zero analysis to support the idea,” this source said.

At that point, the Air Force had not designed the Global Hawk to perform all the intelligence, surveillance and reconnaissance work done by U-2s, which can fly at 70,000 feet and rival spy satellites in the quality of their imagery and data. Expensive upgrades would be necessary to make the drone a true competitor to the U-2, which had already been upgraded and will be viable through 2040.

As a result, skeptical lawmakers resoundingly defeated the Air Force’s bid to retire the U-2s, demanding in legislative language that the Air Force prove the Global Hawks would have the same or lower operating and maintenance costs than the U-2s.

Lawmakers and their aides subsequently inundated the Air Force with letters seeking detailed comparisons of the two programs, said the retired pilot, who helped the Air Force liaison office answer those requests.

Meanwhile, Northrop Grumman circulated an analysis of Air Force data that claimed the Global Hawk was cheaper to operate, giving ammunition to allies, such as Rep. Moran, a member of the House defense appropriations subcommittee.

Moran, who successfully urged Northrop Grumman to move its headquarters from Los Angeles to his district in Falls Church, Va., in 2011, confronted top Air Force officials at a May 9 hearing last year, insisting that their figures showing each aircraft operating at roughly the same $32,000 per hour cost was flawed and that the Global Hawk was cheaper to operate.

A spokesman for Moran did not respond to repeated requests for comment.

Gen. Mark Welsh, the Air Force chief of staff, responded that the hourly cost was “about the same” but argued that, because U-2s are deployed closer to their surveillance targets, their operation costs much less overall. Taking that into account, “the U-2 costs less than the Global Hawk, which typically is more centrally located in a region and has a longer way to travel; therefore, the longer endurance flights — which are the strength of the Global Hawk — cost more money,” the general said.

“Those opposed to the Global Hawk retirement already had their answers,” the retired pilot said. “They didn't really want facts and explanations, so it was an exercise in futility.”

Northrop Grumman’s supporters also argued that after spending at least $4 billion to build the Block 30s, the drones should be put to good use, instead of being retired to the Air Force’s “boneyard” at the Davis-Monthan base in Arizona. Some lawmakers also argued that ending the Block 30 program could raise the cost of a version that the company was building for the Navy.

At a Feb. 28, 2012 hearing, Rep. Tom Rooney, R-Fla., who has received $17,500 from Northrop Grumman’s PAC since 2009, marveled about “these really cool” Global Hawks. “I've seen the Global Hawk up close, very impressive. You know, it makes you feel proud to be an American that this is the kind of stuff that we're putting out,” Rooney told top Air Force officials. “Nothing against the U2, but when you talk about antiquated systems versus what we've got to show the world in the future, it was just impressive.”

When Rooney asked why the Air Force couldn’t keep flying both of them, Gen. Norton Schwartz, then the Air Force chief of staff, responded that “if resources were not an issue or were less an issue, we might well make a strategic decision to do something along those lines, but we did not have that option.” He called the potential savings “not trivial.”

The contractor gets its way

But when Bartlett drafted the fiscal year 2013 defense authorization bill for his subcommittee on April 26, 2012, he included language ordering the Air Force to keep the Block 30s in service. Bartlett said in the interview that his staff director, who he said had met with Northrop’s lobbyists, obtained approval for that language from staff on McKeon’s committee. Bartlett’s staff director died in January.

“The U-2 is old and obviously needs maintenance to keep it going. They just never convinced us that, in fact, it would save money to throw [Global Hawks] on the trash heap,” Bartlett said in an interview.

The Senate Armed Services Committee took a different view, and accepted the Air Force’s claim that the Block 30’s were more costly and less useful. But the committee allowed the House position to prevail in a conference that resolved disagreements over the defense bill. And the result was that the Air Force did not get what it said it wanted in 2011 or 2012: It was instead ordered by Congress to keep both the U-2 and the Global Hawk Block 30’s in operation.

"There's no free lunch here," then-Defense Secretary Leon Panetta complained at a news conference after McKeon’s committee acted. "Every dollar that is added will have to be offset by cuts in national security. And if for some reason they do not want to comply with the Budget Control Act, then they would certainly be adding to the deficit, which only puts our national security further at risk."

Northrop Grumman at this point wants the Global Hawk budget to be approved as quickly as possible, and so it has offered the Air Force what it claims is a reduced price for the three additional aircraft. The Air Force until recently was not taking the bait, and it tried again this spring to resist the purchases.

But after Moran and McKeon sent their letter  to Hagel, it folded its cards. “The Air Force considers the three additional Block 30 aircraft excess to need; however, to comply with congressional direction, the Air Force is taking action to execute unobligated funding and acquire these last three Block 30 aircraft,” said Ed Gulick, an Air Force spokesman.

Overall, defense procurement spending has been declining since 2011. But as the pie shrinks, “every contractor worth his salt is going to do battle for his system; every member of Congress, attentive to re-election, is going to discover that that one system is the key to our nation's security,” observed Adams, the former national security budget official. The services, he said, will get squeezed as a result and wind up buying more “things they don't need.”

An RQ-4B Global Hawk Block 30 prepares to land at Beale Air Force Base in Yuba County, Calif.Richard H.P. Siahttp://www.publicintegrity.org/authors/richard-hp-siaAlexander Cohenhttp://www.publicintegrity.org/authors/alexander-cohenhttp://www.publicintegrity.org/2013/07/16/12969/huge-drone-could-not-be-grounded

Senate e-filing club grows by one

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The ranks of the U.S. senators who voluntarily file their campaign finance reports online increased this past quarter — by one.

With the addition of Sen. Jack Reed, D-R.I., 16 senators chose to submit their second-quarter campaign finance reports electronically, up from 15 in the first quarter of the year, a Center for Public Integrity review of Federal Election Commission records found.

Reed, a 16-year veteran of the Senate who is up for re-election in 2014, had previously never e-filed any of his campaign finance reports.

But on Saturday he submitted online his documents covering the beginning of April through the end of June. A Reed spokesman could not immediately be reached to explain why.

(Update, 5:37 p.m.: Reed spokesman Chip Unruh explained that the senator e-filed because he "is a champion of campaign finance reform and transparency.")

The latest list of senators who filed campaign finance reports online last quarter, instead of on paper alone, includes members of both parties and two independents:

  • Max Baucus, D-Mont.
  • Barbara Boxer, D-Calif.
  • Thad Cochran, R-Miss.
  • John Cornyn, R-Texas
  • Joe Donnelly, D-Ind.
  • Dianne Feinstein, D-Calif.
  • Al Franken, D-Minn.
  • Kirsten Gillibrand, D-N.Y.
  • Angus King, I-Maine
  • Patrick Leahy, D-Vt.
  • Claire McCaskill, D-Mo.
  • Jack Reed, D-R.I.
  • Bernie Sanders, I-Vt.
  • Chuck Schumer, D-N.Y.
  • Jon Tester, D-Mont.
  • Elizabeth Warren, D-Mass.

Members of the Senate are currently not required to file their campaign finance reports to the Federal Election Commission online. Rather, they are allowed to submit their reports on paper to the Secretary of the Senate, meaning it can potentially take weeks or even months for the public to find out who is funding their senators’ campaigns.

Unlike Senate hopefuls, presidential and House candidates, as well as political action committees and super PACs, must file their campaign finance reports online.

The FEC currently pays a separate firm to manually convert the information contained in the senators’ campaign finance reports into electronic form before uploading data in the filings to the agency’s searchable public online database. 

Sen. Jon Tester, D-Mont., introduced a bill in February — it has yet to gain significant legislative traction — that would require senators to file their campaign finance reports online. He also proposed similar legislation in 2011. And in March, he unsuccessfully attempted to add the measure as an amendment to the federal budget.

Tester’s spokesman says he believes the bill’s prospects are improving because it is receiving greater attention from those outside the Senate chambers.

In general, people are growing more concerned over undisclosed political money, Tester’s press secretary Dan Malessa said, such as contributions used by some politically active nonprofit groups.       

“I think the bill will pick up more momentum this year compared to years past because of the influence of secret money,” Malessa said.

Malessa added that Tester hopes to include the legislation, which has 34 co-sponsors — including Reed — in the 2014 financial services appropriations bill. Some of the e-filing co-sponsors still continue filing their quarterly disclosures only on paper.

Transparency advocates have been lobbying for the bill’s passage for years. The Sunlight Foundation last week repeated its call for senators to e-file their campaign finance disclosures in an open letter to members of the U.S. Senate.

Lisa Rosenberg, a government affairs consultant for the Sunlight Foundation, said she remains “cautiously optimistic” about the measure’s chances in Congress, but added “this bill has been around for ten years now so I don’t get too hopeful.”

Senate Minority Leader Mitch McConnell, R-Ky., and other Republicans have stymied previous efforts to advance legislation requiring senators to e-file their campaign finance reports, often by attaching unrelated amendments.

McConnell’s office did not respond to requests for comment. 

Proponents of the legislation estimate Tester’s proposal could save the federal government upward of $500,000 annually. 

 

 

Sen. Jack Reed, D-R.I., at the U.S. Capitol. Adam Wollnerhttp://www.publicintegrity.org/authors/adam-wollnerhttp://www.publicintegrity.org/2013/07/16/12973/senate-e-filing-club-grows-one

Farmworker advocates press EPA to update pesticide rules

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Saying they are plagued by pesticides but protected by only a thin layer of government regulation, farmworkers and their advocates are pressing the Environmental Protection Agency to update rules that are two decades old, and, critics say, dangerously dated.

Farmworker advocates from Florida to California were in Washington Monday and Tuesday to press the EPA and members of Congress to tighten rules meant to protect agricultural laborers from pesticides in the fields.

Their target: The Worker Protection Standard, a set of EPA rules meant to reduce the risk of pesticide-related injuries for some 2.5 million agricultural workers and pesticide handlers at 600,000 agricultural establishments nationwide.

Yet, even as the perils of pesticides have become better known, EPA protections have not been seriously updated in 20 years.

And, the Center for Public Integrity reported last year, the federal agency can only guess at the number of pesticide-related injuries for workers who often toil in the shadows. In addition, the Center found, the EPA often hands off pesticide enforcement to the states — which receive and investigate modest numbers of complaints each year.

The mix of old regulations and thin enforcement leads to tangible problems for laborers in the fields, advocates say.

“For me it’s gut-wrenching to sit across from someone, look at their face, hear their stories, and what can we do? It’s terrible,” said Jeannie Economos, Pesticide Safety and Environmental Health Project Coordinator for the Farmworker Association of Florida.

Recently, Economos said, an undocumented worker — a woman about 30 years old and employed by a Florida plant nursery — came to complain about verbal abuse by her boss. As they talked, she said, the worker said she had trouble breathing for days after working near pesticides. “She sat in front of me and she shook the whole time, and she said she shakes all the time because she is exposed to pesticides,” Economos said.

Citing such cases, worker rights and pesticide safety groups are pressing the EPA to enhance protections. Among their suggestions, they are asking the EPA to:

  • Provide more frequent and thorough pesticide safety training for farmworkers;
  • Ensure that agricultural laborers receive information about specific pesticides they handle, and protective equipment limiting exposure;
  • Mandate medical monitoring of workers handling pesticides that affect the nervous system.

“Farmworker families are exposed to pesticides in the form of residues on workers’ tools, clothes, shoes, and skin. The close proximity of agricultural fields to residential areas also results in aerial drift of pesticides into farmworkers’ homes, schools, and playgrounds,” Earthjustice, a nonprofit public interest law organization, said in a statement this week. “Research shows that children are especially vulnerable to harms from these exposures, even at very low levels.”

Such groups have long pressed for reform. In 2011, for instance, Earthjustice and Farmworker Justice sent then-EPA Administrator Lisa Jackson a 31-page letter seeking “long-overdue revisions” to rules.

Now, farmworker advocates say they expect the EPA to soon issue recommended updates to the Worker Protection Standard. Anticipating that, the advocates are pressing the agency and members of Congress for substantive changes.

“We feel it’s about time that they do this, and we’re really concerned that what the EPA has proposed does not get watered down in the process,” Economos said.

In a statement to the Center Wednesday afternoon, the EPA confirmed it is revamping the Worker Protection Standard. Among other areas, the EPA said it is examining the minimum age for handlers, personal protective equipment and ways to "improve enforcement capability."

"The proposed rule intends to reduce the risk of adverse effects to worker health from the use of agricultural pesticides," the agency said, adding that it intends to release proposed amendments in the spring of 2014.

 

A pesticide plane dusts cotton plants in Lemoore, Calif.Ronnie Greenehttp://www.publicintegrity.org/authors/ronnie-greenehttp://www.publicintegrity.org/2013/07/17/12975/farmworker-advocates-press-epa-update-pesticide-rules

Justice Alito's reported wealth soars in 2012

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U.S. Supreme Court Justice Samuel Alito may have more than quintupled his net worth in 2012 according to a financial disclosure statement released Wednesday.

Alito’s 23-page financial disclosure reveals that his net worth was somewhere between $2.3 million and $6.2 million in 2012. In 2011, the range the justice reported was between $380,000 and $1.1 million.

Alito is now ranked fifth on the U.S. Supreme Court in terms of maximum potential wealth — a three-rung climb from the previous year.

Alito’s eight colleagues filed their reports in early June, as the Center for Public Integrity previously reported. Alito was granted an extension. The report solidifies his position as a member of the high court’s millionaires' club. At least six and possibly as many as eight justices are millionaires, according to a Center analysis of the forms.

Only Justice Anthony Kennedy’s reported net worth is less than $1 million.

The bulk of Alito’s spike in wealth comes from previously unreported PNC Bank accounts valued between $250,001 and $515,000, along with two Edward Jones investment accounts.

Of Alito’s newly reported investments, stock in California software giant Oracle Corp. and OGE Energy Corp., an Oklahoma-based company, are among the largest, each valued between $100,001 and $250,000. Alito also reported holdings in Boeing and Caterpillar Inc., each valued between $15,001 and $50,000.

Also notable are Alito's holdings in oil and gas corporations ConocoPhillips and Chevron, valued between $15,001 and $50,000 each, along with common stock in Procter & Gamble, Johnson & Johnson and pharmaceutical giant Merck & Co.

In addition to his burgeoning investment portfolio, Alito earned nearly $27,000 from teaching law at Duke University and Pennsylvania State University. The Pennsylvania gig afforded Alito, the second Italian-American appointed to the court, a two-week trip to Florence, Italy, last summer.

Attempts to reach Alito's office for comment were unsuccessful.

Adam Wollner contributed to this report.

Supreme Court Justice Samuel Alito Jr. Reity O'Brienhttp://www.publicintegrity.org/authors/reity-obrienhttp://www.publicintegrity.org/2013/07/17/12978/justice-alitos-reported-wealth-soars-2012

D.C.-based groups spent big in special elections

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Carpetbagging super PACs and nonprofit groups are dominating this year’s special congressional elections in a potential foreshadowing of the 2014 midterms, where even the sleepiest locales aren’t immune from out-of-state, cash-flush special interests.

Take Massachusetts’ U.S. Senate election, which last month propelled veteran Rep. Ed Markey, D-Mass., to Congress’ upper chamber — and attracted millions of dollars in outside spending from political groups based in California, New York and Florida.

Organizations in Illinois, meanwhile, spent precisely zero dollars to advocate for or against several candidates who vied early this year to replace ex-Rep. Jesse Jackson Jr., D-Ill., while outfits from everywhere but collectively burned through more than $2 million.

South Carolina? The biggest players backing or bashing eventual House seat winner Republican Mark Sanford, or his Democratic opponent, Elizabeth Colbert Busch, weren’t from Columbia or Charleston, but Washington, D.C.

So far this year, just 4 percent of the $12.4 million spent by political groups or party entities on congressional races came from groups based within the state where they’re doing their spending, a Center for Public Integrity analysis of federal independent expenditure data indicates.

Spending by outside groups has become a pivotal element in elections thanks to the Supreme Court’s 2010 ruling in Citizens United v. Federal Election Commission, which allowed super PACs, unions and certain nonprofits to raise and spend unlimited amounts of money to advocate for or against political candidates.

Washington, D.C., is far and away the biggest source of funding. In all, groups with headquarters in the nation’s capital account this year for about two-thirds of independent expenditures on congressional races. That figure jumps to nearly 72 percent when factoring in organizations from New York City and the D.C. suburbs.

Even homegrown groups usually outsource their work: only three-tenths of a percent of independent expenditures come from in-state groups that also used in-state vendors to produce or manage their advertisements and communications, the Center’s analysis shows.

To illustrate the point, in most cases, state lines are irrelevant when it comes to those who pay for independent ads, those who produce them and even where they air. And it's not as if states that hosted special elections aren't home to political consultants.

For example, Independent Women’s Voice,  a Washington, D.C.-based nonprofit, paid Illinois firm Victory Media Group to generate $130,000 worth of television advertisements and telemarketing calls primarily slamming Colbert Busch in South Carolina.

Freestone Communications of Missouri — a state that hosted a special election in June — got $64,250 worth of business from the League of Conservation Voters in Washington, D.C., to make phone calls on behalf of Markey in Massachusetts.

And Progressive U.S.A. Voters of Denver paid Grassroots Voter Outreach of Boston more than $21,000 for canvassing services in Illinois’ District 2 Democratic congressional primary.

Most of it targeted Democrat Debbie Halvorson, who lost badly to fellow Democrat and former state Rep. Robin Kelly, the general election’s eventual winner.

Super PACs and nonprofits played a prominent, and sometimes dominant role in many 2012 congressional races, often injecting hundreds of thousands if not millions of dollars of advertising into the elections and sometimes spending more than the candidates themselves.

This flood of outside cash doesn’t sit well with Tim Buckley of the Massachusetts Republican Party, which is one of just three non-candidate committees active in special elections this year that are both based in the state in which they were active and hired in-state help for their advocacy.

Local consultants know their turf better than outsiders and better parse the political intricacies of a state such as Massachusetts, which while strongly Democratic has still elected plenty of Republicans, Buckley argued.

The party paid Campaign Homebank LLC of Boston more than $31,000 for telemarketing services promoting GOP Senate nominee Gabriel Gomez, who lost last month to Markey. It also hired a separate, Virginia-based firm for similar work, paying it about $143,000.

But some outside groups defend their activity as necessary, even healthy, given that congressional candidates hold sway on issues of national interest that reach far behind district boundaries or state lines.

The New York City-based 501(c)(4) nonprofit 350.org Action Fund, which advocates for fighting climate change, made nearly $50,000 worth of independent expenditures in Massachusetts’ special Senate election Democratic primary, supporting Markey over Rep. Stephen Lynch, D-Mass.

Since the Democratic nominees disagreed about the hot button issue of the Keystone XL Pipeline project, the group threw its support behind Markey for rejecting the pipeline, 350.org Action Fund Media Campaigner Daniel Kessler explained.

“We thought it would be important to show that there would be electoral consequences for those that do not oppose the pipeline,” Kessler said.

Looking toward the 2014 midterm elections, early indicators suggest organizations with few geographic ties to key political battlegrounds plan to participate as much or more than ever.

Liberal 501(c)(4) nonprofit Patriot Majority USA and super PAC Senate Majority PAC — both from Washington, D.C. — have together already made more than $277,000 worth of independent expenditures against Senate Minority Leader Mitch McConnell, R-Ky., who faces a potentially tough re-election fight.

Washington, D.C.-based super PAC Club for Growth Action’s independent expenditures have already exceeded $182,000 in opposing U.S. Sen. Mark Pryor, D-Ark.

In opposing Pryor, Club for Growth Action has used vendors for mail production costs and television ads from a range of states including Washington, D.C., Maryland, Virginia and West Virginia.

It’s a practice Keller called “pretty common,” and that Club for Growth Action chose those vendors because of past experiences working together and locations.

“Do you fly to Alabama to get a mortgage?” he asked. “Do you drive to Minnesota to use to the ATM?”

Erin Quinn contributed to this report.

 

 

Dave Levinthalhttp://www.publicintegrity.org/authors/dave-levinthalhttp://www.publicintegrity.org/2013/07/18/12976/dc-based-groups-spent-big-special-elections

Outside money from D.C. groups, Koch brothers gushes into local politics

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This week the Watchdog (the Center's email newsletter, which you can subscribe to here) points out two new investigative reports that shed light on how big money continues to saturate politics in the U.S.

The first, “D.C.-based groups spent big in special elections,” is a Center for Public Integrity analysis of carpetbagging super PACs and nonprofit groups that are dominating this year’s special congressional elections.

The second, from the Investigative Reporting Workshop at American University, is an exhaustively researched report and the most detailed analysis to date of the political spending of the Koch brothers.

The Center report notes that unlimited outside spending by out-of-state groups is a potential harbinger of the 2014 midterm elections. It seems that even the sleepiest locales aren’t immune from major out-of-state, cash-flush special interests.

So far this year, just 4 percent of the $12.4 million spent by political groups or party entities on congressional races came from groups based within the state where they’re doing their spending, the Center analysis shows.

Such spending by outside groups has become a pivotal element in elections thanks to the Supreme Court’s 2010 ruling in Citizens United v. Federal Election Commission, which allowed super PACs, unions and certain nonprofits to raise and spend unlimited amounts of money to advocate for or against political candidates.

Where is this flood of outside cash coming from? Washington, D.C., is far and away the biggest source of funding. In all, groups with headquarters in the nation’s capital account this year for about two-thirds of independent expenditures on congressional races. That figure jumps to nearly 72 percent when factoring in organizations from New York City and the D.C. suburbs.

Meanwhile, in an extensive series of reports, the Investigative Reporting Workshop at American University lays out the most detailed analysis to date of the political spending of Koch Industries, one of the largest privately held corporations in the world.

Led by Center founder Charles Lewis, the Workshop spent two years working on its “Koch Club” investigation. Researchers studied a vast amount of publicly available information about Charles and David Koch’s political activities, including donations to political campaigns from the Koch brothers personally, donations to political campaigns from Koch Industries’ political action committee and the lobbying activities of Koch Companies Public Sector.

The cumulative cost to Koch Industries and Charles and David Koch for this extraordinary alchemy of political and lobbying influence, nonprofit public policy underwriting and educational institutional support was $134 million over a recent five-year period.

“From direct political influence and robust lobbying to nonprofit policy research and advocacy, and even increasingly in academia and the broader public ‘marketplace of ideas’ this extensive, cross-sector Koch club or network appears to be unprecedented in size, scope and funding,” the report reads.

“And the relationship between these for-profit and nonprofit entities is often mutually reinforcing to the direct financial and political interests of the behemoth corporation — broadly characterized as deregulation, limited government and free markets,” it continues.

The analysis found:

  • From 2007 through 2011, Koch private foundations gave $41.2 million to 89 nonprofit organizations and an annual libertarian conference.
  • Koch Industries and Charles and David Koch contributed $8.7 million to candidates and the Republican Party in the three election cycles between 2007 through 2012.
  • In addition, Koch private foundations contributed $30.5 million to 221 U.S. colleges and universities and $46.3 million to the arts and other more traditionally charitable purposes during this period.

And while Koch Industries’ lobbyists were spending $53.9 million to further the giant corporation’s federal and state policy agenda, the nonprofits it funded were simultaneously “educating” the public and lawmakers about energy, the environment and other issues in public testimony on Capitol Hill.

The sheer magnitude of the amount of special interest money being spent in the nation is laid bare in each of these investigative reports. In other countries we might say this is evidence of corruption, but here it is business as usual.

And when a nominal democratic political system responds more to the money being spent than the citizens it represents, soon the only question being asked is how much does it take? 

Clearly, quite a lot.

 

Until next week,

Bill 


OPINION: insurance tricks to avoid ObamaCare's consumer protections

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Bookmark this column and read it whenever an insurance company’s feel-good TV commercial tries to convince you its bosses care as much about your health as they do about next quarter’s profit margins.

I can assure you they don’t. Here’s the most recent evidence.

As we get closer to January 1, when some of the most important consumer protections in the new health care law kick in, insurance industry executives are engaging in a practice they call “prairie dogging” to hold on to the profitable status quo for another year.  In this case,  small businesses, like prairie dogs, are sticking their heads out of the ground – making themselves vulnerable — in response to a commotion made by predators, in this case insurance companies.   

I first heard about this several weeks ago. Aetna had been encouraging some of its small business customers —whose policies come up for renewal at the beginning of 2014— to renew their policies in December instead of January. By taking advantage of this one-time-only offer, those Aetna customers will be able to delay complying with the law—and providing new consumer protection to their workers—until the last month of 2014.

Under the Affordable Care Act, policies that take effect on January 1, 2014, must reflect new regulations that are popular with the public —but that insurance executives worry might squeeze their profit margins.  Starting on that day, insurance companies will no longer be able to charge women more than men or to charge people who’ve been sick in the past more than healthier folks. And they won’t be able to gouge older policyholders as much as they do today or refuse to sell coverage to anyone willing to pay for it. They’ll also be limited on how much they can make policyholders pay out of their own pockets through deductibles and coinsurance, and they won’t be able to sell policies that provide paltry coverage.

Insurance executives hate those new restrictions because the discriminatory practices they’ve been allowed to engage in for years have enabled them to pad the bottom line.  They’ve been lobbying since the law was passed three years ago to weaken the consumer protections they despise the most, which is all of them. They haven’t been successful, but their loophole hunters have found a way to postpone the financial hit.

I’ve heard from consumer advocates that many insurers are following Aetna’s lead. They’re sending letters to customers—at least to the ones with a young and healthy workforce—encouraging them to cheat their employees out of the Affordable Care Act’s protections for several more months. And they’re using the same tactics political advertisers use to spread fear, uncertainty and doubt (a.k.a. FUD).

Here are the first sentences of one such “Dear Valued Client” letter that was forwarded to me by a consumer advocate whose father-in-law owns a small business in Florida:

“Thank you for choosing to renew with AvMed Health Plans. As your trusted health care advisor, we want to give you an update on how the upcoming 2014 Affordable Care Act (ACA) mandates may affect you and how you can reduce rate uncertainty and possible disruption.  Although the impact on each group will vary, it is expected that factors such as essential health benefits, maximum plan deductibles, the application of new taxes and fees, and new rating rules may drive insurance premiums up substantially for some small groups. (Emphasis added.)

“Please note that AvMed has an early renewal option available to you regardless of your 2014 renewal date. For example, if you have a renewal date of January through June 2014, you can change your effective date to December 1, 2013 and keep rate stability through December 1, 2014.”

The letter goes on to advise the small business owner that if he wants to take advantage of the special renewal offer, he’ll have to sign and return a form by August 15.  If he does sign the form, however, he’ll actually be putting himself at risk of the very rate instability the letter said he could avoid. That’s because of this sentence just above the signature line: “I acknowledge and agree that AvMed has the right to underwrite to account for any differences between the existing Contract and a new Contract.” In other words, the insurance company reserves the right to jack up the premium as much as it wants if it believes one or more employees might have high medical claims next year.

As the business owner’s daughter-in-law noted, the letter seems like a trick.

“It seems that they are trying to delay compliance with 2014 market reforms by 11 months by changing the plan year date and also get him to commit to renewing their plan before he can explore his option’s in Florida’s marketplace by forcing him to decide in the next few weeks.”

She’s right. It’s clear that not only do insurers want to postpone complying with the law, they also are worried that the customers they want to keep might actually find better deals from competitors once the online marketplaces start operations on Oct. 1.

Don’t imagine for a minute you can trust these guys to think more about you than about their profits. That’s just not the way they operate.

Wendell Potterhttp://www.publicintegrity.org/authors/wendell-potterhttp://www.publicintegrity.org/2013/07/22/12983/opinion-insurance-tricks-avoid-obamacares-consumer-protections

Navy at sea with lousy books

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The U.S. Navy has struggled for a long time to track its own spending, as well as the work routinely performed on its ships, planes, and aircraft, in a manner that complies with modern accounting standards. It sits in this pool of hot water with the other military services, which jointly face a statutory deadline to meet those standards by 2017.

Several years ago, in an effort to meet the deadline, it began to implement a new software system to help it keep track of its finances and resources, including inventories, readiness, vessels, aircraft, and spare parts. It was not cheap, costing nearly a billion dollars so far.

But inexplicably, according to auditors at the Defense Department, the Navy has not yet used the accounting system to track the value of $416 billion worth of military equipment – around 85 percent of the service's total assets in 2012 -- gravely undermining its usefulness.

The Pentagon’s auditors first disclosed the Navy’s lapse in a report on July 18, which warned that having such a sizable amount of “unauditable” military equipment raised questions about the ability of the Navy – and the Defense Department as a whole – to meet the legal deadline.

The report by the Pentagon’s Office of Inspector General is a reprise of its earlier warnings that the military services are moving too slowly and sloppily in bringing their accounting practices into the 21st century.

It matters, according to the IG’s office and many independent defense analysts, because using antiquated procedures to keep track of what the military has, what it’s buying, and how much it's worth makes it hard for the Pentagon to operate efficiently, to buy only what it truly needs, and to be certain its funds are not being misspent.

The Defense Department is virtually alone among federal agencies in never having collected a positive review of its accounting statements from federal auditors. Top defense officials have pressed the military services to work harder and faster, partly in response to rising pressure from lawmakers on Capitol Hill.

But the Navy, according to the report, has essentially stuck to some of its bad habits. Financial office staffers “used inefficient manual processes and journal vouchers to report the amount of military equipment assets on its financial statements,” according to the report conducted from August 2012 to March 2013.

If the Navy used the new system to record the value of its military equipment, then it could track the equipment's "actual costs from acquisition through retirement," the IG report said.

Four Navy commands were affected – air, sea, supply systems, and space and warfare. Instead of using one new system that swept up everything they controlled, the Navy’s financial officers juggled data from six separate, antiquated accounting systems, according to the report.

Navy officials have not clearly stated why they did not change their process for tracking equipment before rolling out the new, $870 million accounting system. In their response to the IG, Navy financial management staffers said they could not provide documentation of the decision. The report said that as of January 2013, no plan was in place to take action.

A senior Navy official said in the report that he agreed with the inspector general’s recommendation to develop a plan to include this new program -- or a comparable system -- in its equipment reporting process. But he noted that “other competing requirements” related to compiling an auditable budget by 2017 “have consumed the majority of available resources.” The Navy said it recently created a council focused on property issues, and would ask them to work to move this issue higher up on the priority list.

The DOD IG complained that this response was not enough, and requested that Navy officials provide additional comments by August 19.

These concerns may sound familiar: The Center for Public Integrity reported in October 2011 that military financial systems are in worse shape than expected and the Pentagon’s efforts to improve have been plagued by overruns and delays. CPI reported in December 2011 that the Navy’s accounting practices may not be able to meet the standard by 2017, despite decades of attempts. And in March 2012, CPI outlined the Army and Navy’s problems with developing workable accounting software.

Navy officials did not respond on July 19 to a request for comment.

One of two designs for the Navy's shallow water ship.Rebecca LaFlurehttp://www.publicintegrity.org/authors/rebecca-laflurehttp://www.publicintegrity.org/2013/07/22/12984/navy-sea-lousy-books

Koch Industries PAC spending record cash

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The political action committee of Koch Industries— the energy and chemicals company led by billionaire brothers Charles and David Koch — gave more money in June to federal political candidates and committees than it ever has in any other month during a non-election year.

KOCHPAC contributed $262,000 to dozens of politicians, political parties and other PACs in June, Federal Election Commission records indicate.

KOCHPAC’s previous record for the most money given in one month during an off-year came in June 2011, when it distributed $227,500 to candidates and political committees.

Its June 2013 spending also represents the fifth-largest amount of money it’s spent during any month, election year or not, according to a Center for Public Integrity review of federal records.

The most money KOCHPAC has ever donated to federal-level candidates and committees during a single month is $575,000, in September 2006.

KOCHPAC’s monster month in June is a continuation of its fastest start to any election cycle, as it contributed $559,000 from the beginning of the year through the end of May, as the Center for Public Integrity previously reported.

One of the PAC’s top beneficiaries in June was Sen. Mike Enzi, R-Wyo., who will face a primary challenge from Liz Cheney, the daughter of former Vice President Dick Cheney.

KOCHPAC contributed $7,500 to Enzi’s campaign prior to Cheney officially announcing her candidacy.

Rep. John Carter, R-Texas, received the legal maximum of $10,000 from KOCHPAC in June, the most of any candidate that month. (Candidates may accept PAC donations of $5,000 each for a primary and general election campaign.) KOCHPAC last month also gave $9,000 to the campaign of Rep. Darrell Issa, R-Calif.

A Koch Industries official could not immediately be reached for comment.

KOCHPAC is just one of the many vehicles Charles and David Koch, two of the nation’s foremost conservative political benefactors, have used in attempts to influence elections and policy.

For instance, the Koch brothers co-founded the Americans for Prosperity, a conservative advocacy organization that was among the biggest spenders in the 2012 election.

But since AFP is a 501(c)(4) nonprofit organization, it is not required to disclose its donors, so it’s unclear exactly how much financial support the Kochs have given the group.

Koch Industries has also spent more than $62 million on efforts to lobby the federal government since 2008, records show.

 

 

 

The Koch Industries Inc. headquarters in Wichita, Kan. (AP Photo/Larry W. Smith)Adam Wollnerhttp://www.publicintegrity.org/authors/adam-wollnerhttp://www.publicintegrity.org/2013/07/22/13018/koch-industries-pac-spending-record-cash

Senate report recommends ouster of large dental chain from Medicaid program

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One of the nation’s largest dental chains for children should be thrown out of the Medicaid program for encouraging dentists to perform unnecessary treatments to boost profits, a new U.S. Senate report concludes.

A two-year Senate investigation of dental chains owned by private-equity firms found that Small Smiles’ business model deceptively gave managers rather than dentists control over the clinics. The report said that management set daily production goals and awarded dentists bonuses based on the amount of work they do, resulting in overbilling and poor quality of care.

“Fortunes should not be made on Wall Street by sacrificing proper care for the underprivileged,” says the 1,500-page, bipartisan report put out by Sens. Charles Grassley, R-Iowa, and Max Baucus, D-Mont.

Small Smiles described the report as outdated, saying in a written statement, “We do not believe that this report adequately reflects the current operations.”

Last year, the company changed hands while in Chapter 11 bankruptcy. The new owner, Nashville, Tenn.-based CSHM, says it has no affiliation with the previous owner and has a new management team that is trying to fix the problems at Small Smiles. The company operates 63 clinics in 19 states and the District of Columbia.

In a letter to Grassley and Baucus last November, the inspector general for the Department of Health and Human Services cited the ownership change as one reason he didn’t exclude Small Smiles from the Medicaid program despite repeated problems found during clinic inspections.

"We've taken action to help CSHM improve its quality of care and management," the IG's office said in a statement Monday.

A joint investigation by the Center for Public Integrity and PBS Frontline last year found complaints about unnecessary and substandard care at Kool Smiles, another corporate chain owned by private-equity investors. Grassley’s office said it tried to investigate Kool Smiles but the company didn’t cooperate.

The report recommended that the HHS inspector general exclude not only Small Smiles from Medicaid but “any other corporate entity that employs a fundamentally deceptive business model resulting in a sustained pattern of substandard care.”

Kool Smiles defended the quality of its care and said it cooperated with Grassley’s investigation. Geoffrey Freeman, a company spokesman, said, “We respect the findings of Senators Grassley and Baucus and are committed to public transparency regarding our ownership structure and the role we play in supporting Kool Smiles dentists to provide care in the best interests of their patients.”

Twenty-two states and the District of Columbia forbid anyone other than a dentist from owning a dental practice. The Senate report said that while Small Smiles claims dentists own individual clinics, the dentists have little to no control over those offices. The report urges states to enforce their laws.

Cutting off Medicaid reimbursements could fatally wound Small Smiles, which specializes in treating children on government assistance.

Problems at Small Smiles first came to light in 2008 when Washington, D.C.’s WJLA-TV aired video of a 4-year-old boy strapped down to a so-called “papoose board” while screaming and kicking in terror. His mother was not allowed to be in the room. The dentist in charge admitted that the board was used to speed up treatments. Former employees alleged that bonuses were given for the amount of work done as well as for “converting” routine visits into major treatments. In the broadcast, the lead dentist scolds his staff for not billing enough and converting enough cases.

In 2010, the Justice Department fined Small Smiles $24 million as part of an agreement to settle charges of overbilling state Medicaid programs. Attorney General Eric Holder said at the time, “Many of these centers performed unnecessary and often painful dental procedures on unsuspecting, helpless children.”

Government monitors continued to find problems at a number of Small Smiles’ clinics. At a Manassas, Va., clinic in the fall of 2011, a monitor reported that 42 percent of the baby root canals performed by one dentist were medically unjustified. Of 34 patient records reviews, 26 of them were strapped down and 20 were not given enough numbing medication, leading the monitor to question whether children struggled with the dentist because they were in pain.

Senate staff later interviewed the dentist listed as the owner of the Manassas clinic, who said Small Smiles gave her the office without giving her any profits from it. She said she didn’t know any of the names of the dentists who worked there.

Twice last year the HHS inspector general threatened to exclude Small Smiles from the Medicaid program. But in a letter to Grassley and Baucus, Inspector General Daniel R. Levinson said Small Smiles fixed the problems by selling the Manassas clinic, paying a $100,000 penalty and addressing other concerns.

The new owner of Small Smiles’ management company said only five of the 20 inspection reports mentioned in the Senate report fell under its watch. “The new team immediately initiated an aggressive turnaround effort premised on patient care, clinical excellence and regulatory compliance,” the company’s statement said.

The changes included eliminating production-based pay for dentists, the statement said. CSHM also disputed the allegation that owners of individual clinics were not involved in their management and said local clinics hire their own staff.

The Senate report also criticizes ReachOut Healthcare America, which runs mobile clinics that treat children at schools. Senate investigators concluded unscrupulous dentists and lack of control by ReachOut led to children being treated without their parents’ permission.

In October 2011, a dentist for ReachOut America put stainless-steel crowns on 4-year-old Isaac Gagnon at his preschool in Camp Verde, Ariz., even though Gagnon’s parents left instructions for their child not to be treated, the report said.

A spokesman for ReachOut America declined to respond.

The inspector general said in his letter that a problem with excluding dental offices from Medicaid is that some children have few choices for getting dental care.

However, the Senate report said, “If states and Medicaid are having difficulty recruiting good dentists to serve such a vulnerable population due to lack of reimbursement, how are private investors so successful at producing huge profits from those allegedly inadequate Medicaid reimbursements?”

 

David Heathhttp://www.publicintegrity.org/authors/david-heathhttp://www.publicintegrity.org/2013/07/23/13029/senate-report-recommends-ouster-large-dental-chain-medicaid-program

Pro-gun group dramatically ups influence spending

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Key opponents of gun control and proponents of immigration reform invested unprecedented amounts lobbying Congress this spring, bucking a downward trend among many of the nation’s largest companies and nonprofits,newly released records show.

The Virginia-based National Association for Gun Rights spent more than $3 million from April through June to advocate against dozens of firearm-related bills and amendments. That’s nearly four times the second-quarter lobbying expenditures of the better-known National Rifle Association, which itself spent a near-record $840,000 during the year’s second quarter.

The Virginia group is a 501(c)(4) nonprofit. It did not lobby prior to this year and does not reveal its donors. The organization has accounted for about $5 million in federal lobbying spending from January through June, ranking it above or alongside major spenders like Shell Oil Co., America’s Health Insurance Plans, the American Bankers Association and tobacco company Altria Group, among others.

On the other side of the gun rights argument is the Mayors Against Illegal Guns Action Fund, led by New York City Mayor Michael Bloomberg and Boston Mayor Tom Menino. The group spent $580,000 on lobbying last quarter — easily twice what it’s spent compared to any other quarter.

Another 501(c)(4) nonprofit, the liberal Advocacy Fund of San Francisco spent about $2.2 million to exclusively press Congress on “comprehensive immigration reform,” federal filings show.

The group, which also does not reveal its donors, spent just $10,331 on federal lobbying during the year’s first quarter and hadn’t spent more than $490,000 for any quarter ever, according to congressional disclosures.

In addition to direct lobbying, the Advocacy Fund supports a variety of left-leaning organizations that, for example, support gay rights and oppose the death penalty, according to its most recent filing with the Internal Revenue Service. It describes itself as a group that “enables progressive donors and activists to impact the legislative arena by providing a legal and fiscal home to those advocating for social change.”

Neither the National Association for Gun Rights nor the Advocacy Fund returned a call seeking comment.

(Update, 7:26 p.m.: In an email, National Association for Gun Rights spokeswoman Danielle Thompson said her organization will continue this year to "be a thorn in the side of senators who seem to ride the fence on this issue" and "spend whatever we believe it takes during the remainder of this year to make sure no new federal gun control becomes law." She declined to discuss the organization's funding, but priased the "grassroots efforts of our members and supporters" for helping defeat all major gun control proposals in Congress this year.)

The organizations were anomalies during a period of congressional gridlock.

In all, about two-thirds of the nation’s top 100 lobbying spenders spent less on federal lobbying this past quarter than they did one year ago, a Center for Public Integrity analysis of congressional disclosure reports and Center for Responsive Politics data indicates.

About three-fifths, meanwhile, spent less during the year’s second quarter than they did during the first quarter, the analysis shows.

A list of those spending less is a who’s who of Capitol Hill heavies. It includes General Electric, the Pharmaceutical Research & Manufacturers of America, Google, Coca-Cola, the American Medical Association, Verizon Communications, drug maker Pfizer and defense firm Northrop Grumman.

Even Facebook, which during the year’s first quarter had surged to its highest level of lobbying spending — $2.45 million — barely cracked the $1 million mark in the second quarter.

Overall, the U.S. Chamber of Commerce (more than $19 million, including affiliates) and the National Association of Realtors ($9.1 million) ranked No. 1 and No. 2 in lobbying spending during the year’s second quarter, slightly increasing their expenditures from the year’s first quarter but spending less than they did this time last year.

The U.S. Chamber routinely tops the list in part because it opts to disclose state- and grassroots-level lobbying (and sometimes political organizing) costs alongside federally focused efforts.

Like the Advocacy Fund, the U.S. Chamber vaulted immigration reform to the top of its second quarter agenda, albeit for decidedly pro-business reasons.

The U.S. Chamber will “continue to educate member of Congress on the importance of reform,” spokeswoman Blair Latoff Holmes said, noting that a major advertising campaign prior to the Senate’s successful vote last month on immigration reform factored into its second quarter lobbying figures.

The campaign focused on Republicans who support reform measures. The House is now taking up immigration reform.

A few notable groups and companies did post larger second quarter lobbying expenditures than this year’s first quarter and last year’s second quarter.

Among them are Comcast Corp. ($5.5 million), the National Cable & Telecommunications Association ($4.7 million), Koch Industries ($3.2 million), FedEx Corp. ($3.1 million), Microsoft ($3 million), Wal-Mart Stores ($2 million) and defense contractors General Dynamics ($3.2 million) and Raytheon Co. ($2 million).

Many of them, too, included immigration reform among their wide-ranging government influence efforts.

One reason for the spending nosedive is spending cuts known as sequestration, noted Lee Drutman, a senior fellow at the nonpartisan Sunlight Foundation, which analyzes political spending.

Companies and interest groups that fought previously to preserve government contracts or programs aren’t doing so now, at least not at the same levels, he explained.

Longer term, there’s been a trend toward some government influencers not disclosing their political activities as “lobbying,” at least as defined by federal law.

Since 2010, when federal lobbying spending peaked at $3.55 billion, annual expenditures have been dropping.

 A rack of rifles at the Firing-Line gun store in Aurora, Colo.Dave Levinthalhttp://www.publicintegrity.org/authors/dave-levinthalhttp://www.publicintegrity.org/2013/07/23/13042/pro-gun-group-dramatically-ups-influence-spending
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