Lobbyists are working hard to get ahead of a critically important report by the government’s internal watchdog that may determine how banks are regulated in the future.

The Government Accountability Office was asked by Congress to determine whether the nation’s largest banks are able to borrow money at lower rates than smaller institutions because of the view that the government will bail out the behemoths or pay off their creditors in a crisis. The study, the second of two related reports, is due out later this year.

The big banks and their lobbyists have been building an arsenal of reports and academic studies that argue recent regulations have reduced their advantage as “systemically important” fiscal institutions and that there is no need for further regulation.

But the big banks will have a rough time arguing that they receive no market subsidy.

Major reports by organizations including the International Monetary Fund have concluded that the market confers a funding advantage of as much as 80 basis points — the equivalent of a 0.8 percentage point discount on a loan — on giant banks perceived to have special protections from their governments.

Bloomberg News calculated that an 80 basis point advantage could add up to an $83 billion-a-year subsidy for the top six U.S. banks that have been deemed systemically important.

The report was requested by Sens. Sherrod Brown, D-Ohio, and David Vitter, R-La., who have been pushing legislation that would raise the capital standards for giant U.S. banks to 15 percent from the current 6 percent.

In the past year, JPMorgan Chase & Co. and Goldman Sachs Group Inc. have released reports that argue that any cost advantage they had during the financial crisis has shrunk with the passage of the Dodd-Frank financial reform act.

Michel Araten, a JPMorgan analyst until he retired in June, wrote a paper while at the bank that argued the subsidy has shrunk to about 18 basis points since Dodd-Frank passed. This, he said, will likely get smaller because of new regulations that will result in the liquidation rather than the bailing out of major banks in future crises.

Since he left to start his own consulting firm, he wrote another paper that refutes studies that use credit ratings to argue that the market gives a too-big-to-fail advantage.

Araten now consults with nonprofits and with The Clearing House, a nonprofit payments service company owned by the world’s largest commercial banks that has turned to a well-regarded academic economist to make its case.

The Clearing House paid for a study by University of Chicago Economist and former Federal Reserve Governor Randall Kroszner, in which he pokes holes in the major studies that have found a market advantage for big banks caused by the implied government guarantee. Araten, who now runs a consulting firm, also does work with The Clearing House.

The Clearing House, which also has an advocacy and research arm, also launched a series of in-house working papers on touting the value of mega-banks and released a paper detailing what it called “10 Myths” about systemically important banks that reads like a list of talking points.

Bank lobbyists were able to point to only one independent academic research team that has found that the mega-bank market advantage diminished because of Dodd-Frank rules. Ken Cyree of the University of Mississippi and Bhanu Balasubramanian of the University of Akron published a paper in November that concluded that Dodd-Frank "has been effective in reducing, but not eliminating, the size of too-big-to-fail discounts."

Cyree said he gets no funding from the financial industry.

Simon Johnson, an economist at the Massachusetts Institute for Technology who advocates breaking up the big banks, argues that banks labeled as systemically important have a market advantage simply by virtue of having that designation.

He warned the Senate Banking Committee in a hearing last week that the GAO would be bombarded with studies from biased sources.

The outcome of the GAO study is crucial because it will have a major influence over future regulations that will determine how much risk the big banks can take on and how much bigger they’ll be able to grow.

Lobbying the GAO is somewhat unusual, and it wasn’t something that the Congress considered when it wrote the rules governing lobbying disclosure. The research agency isn’t even covered by federal disclosure requirements.

“It’s a sharp strategy, if you know what you’re doing,” said Craig Holman, a lobbyist on government ethics at Public Citizen. GAO auditors are experts in their field, Holman said, so “a lobbyist who can speak their language — such as providing accurate numbers — can influence their findings and research.”

The financial industry spends more on federal lobbying than any other, according to the Center for Responsive Politics, a nonpartisan group that tracks money in politics. Financial firms, including banks, hedge funds, mortgage lenders and insurers, last year spent $87.5 million on lobbying from January to through September, the most recent available records show.

GAO reports are considered a gold standard of nonpartisan analysis: the agency’s findings wield great influence because of the perception that it is not subject to outside lobbying and influence.

The GAO hasn’t even completed its methodology for the study, said Lawrance Evans, the director of financial markets at the agency. He declined to say what studies he’s been provided and by whom, but said he fully expects to hear from all the financial institutions that could be affected by the report.

“There’s a significant amount of interest in this particular GAO report,” he said.

Several bank lobbyists declined to say whether they had provided reports directly to the GAO. However, two lobbyists who asked that their names not be used said their organizations were ensuring the reports were well-publicized so they were certain to be noticed by Evans’ and his team.

Evans, in an interview, said GAO economists will conduct their own empirical analysis of the market conditions for big bank borrowing, in addition to analyzing the research that’s already been done.

“When we get information from different parties, we’re aware of the conflicts of interest,” he said.

At a Senate Banking Committee hearing last week, Brown urged Evans to be mindful of the sources of the research he uses for his study.

“We need to sort out sensible analysis from sophisticated lobbying,” he said.

Knowing I’ve been both a critic of insurance company practices and a supporter of efforts to reform the industry, a FOX news producer reached out last week to get my take on accusations by conservatives that Obamacare will actually result in a bailout of big insurance companies.

Under the headline, “Bailing Out Health Insurers and Helping Obamacare,” The Weekly Standard on Monday urged Republicans to insist that future debt ceiling increases contain a no-bailout provision. The magazine also cited Sen. Marco Rubio’s, R-Fla., bill to repeal a provision of the Affordable Care Act designed to limit potential initial losses of insurers selling policies on the new health insurance exchanges.

I reminded the FOX producer that Republicans have been supporting — and vigorously defending — a much more expensive transfer of taxpayer dollars to private insurers than the one Obamacare foes are now concerned about.

Here’s the issue:

Lawmakers who drafted the Affordable Care Act knew that insurers would be reluctant to participate in the new health insurance exchanges — also called marketplaces — if the government didn’t create a temporary program to protect them against what’s known in the insurance world as adverse selection.

Insurers were concerned, for good reason, that the first people to sign up for coverage through the exchanges would be folks previously shut out of the insurance market — people who were older and sicker than the population at large. Those people couldn’t afford to buy coverage previously because insurers were able to charge them far more than younger, healthier people.

In many cases, insurers refused to sell coverage at any price to prospective customers with preexisting conditions. That’s a big reason why the number of uninsured Americans had reached nearly 50 million when Congress passed the reform law.

So it wasn’t the least bit surprising that the first few million who have signed up for coverage since the exchanges opened on Oct. 1 skew older than many expected. People who have been denied coverage for years are far more motivated to get insurance — and fast — than anyone else. There is not the same pent up demand among the young and healthy.

In anticipation of this, drafters of the reform law established a $25 billion risk fund to insulate insurers from big losses during the first three years. Although the risk fund has always been in the law, conservative pundits apparently just became aware of it.

Yes, $25 billion is a lot of money, but it is pocket change compared to the enormous amount of taxpayer dollars that have been flowing to private insurance companies for nearly three decades to keep them in the Medicare Advantage program, which has had the unwavering support of Republicans.

Republicans have long supported efforts to privatize Medicare, and the Medicare Advantage program is one of the ways they’ve tried to do it. Medicare Advantage is billed as a private alternative to traditional Medicare. When Americans reach 65, they can enroll in traditional Medicare or in a private plan operated by an insurer. If they opt for a private plan, the federal government still picks up the tab and transfers money to the private insurer every month.

As the U.S. Government Accountability Office explains it, the Centers for Medicare and Medicaid Services (CMS) adjusts the monthly payments it sends to private insurers to account for each beneficiary’s health status. As part of this risk adjustment process, CMS assigns each Medicare Advantage beneficiary a risk score — “a relative measure of expected health care costs,” as the GAO puts it.

We’re talking a lot of money here. In 2012 alone, the GAO calculated that the federal government spent about $135 billion on the Medicare Advantage program. The problem for taxpayers is that, according to the GAO, the government has been more than generous over the years to private insurers, having paid them way more than it should have because of shortcomings in how the risk scores are developed.

Interestingly, but not surprisingly, there was no mention of that, or any reference at all to the Medicare Advantage program, the biggest champion of which are Republicans, in The Weekly Standard’s “bail-out” story last week. If they are sincere in their alarm that Obamacare might reward private insurers with an extra $25 billion between now and the end of 2016, they should be apoplectic about the ongoing bailout known as the Medicare Advantage program.

Andy Pollock is living proof that in the “non-prime” mortgage game, you can be down, but never out.

The veteran subprime executive has been named president and CEO of WDB Funding, the company announced last week. WDB is a national lender that provides “fast and flexible” loans for borrowers who don’t meet “today’s stringent conventional requirements and underwriting guidelines,” according to its website.

Until 2008, Pollock was president and CEO of First Franklin, a subprime lender whose risky loans to vulnerable consumers nearly sank Merrill Lynch, which was forced to sell itself to Bank of America. WDB Funding is the third mortgage company Pollock has helped lead since rejoining the industry in 2011.

"Non-prime" loans typically do not qualify for government guarantees because they carry more risk.

WDB Funding’s managing partner said he is “ecstatic” to have nabbed Pollock. “Given Andrew’s proven track record for building, expanding and directing financial services organizations, we see nothing but opportunity for the future,” Joseph D’Urso said in a statement. Pollock has spent a quarter-century “heading large scale lending operations,” the release noted.

First Franklin’s loans were some of the worst of the subprime era. Regulators said they had among the highest foreclosure rates in hard-hit cities. Lawsuits filed by AIG and others quoted former First Franklin underwriters calling its loan practices “basically criminal.”

Pollock was featured in a September report by The Center for Public Integrity about former subprime CEOs who are back in the game, developing loans that push the limits of tighter lending standards that have prevailed since the crisis. The report detailed how Pollock and his contemporaries see the recent global crisis as a cyclical, temporary downturn in a business that is beginning to rebound.

Pollock’s new firm targets investors seeking quick money to buy homes that they can fix up and flip or rent to tenants. Its loans require big down payments and must be repaid in five years, at the most. They carry rates as high as 15 percent.

WDB specializes in "interest only" loans, which were popular before the crash of 2008. Borrowers make regular payments without reducing the principal balance of their mortgage and face massive balloon payments after a few years. That leaves borrowers ar risk of default unless they have ready cash or a lender willing to refinance the loan.

WDB, does not, however, make loans to individuals. It caters to limited liability companies that buy investment properties.

An oft-forgotten footnote to the Supreme Court's Citizens United v. Federal Election Commission decision is that it all began with a low-budget film about Hillary Clinton.

Now today, on the fourth anniversary of Citizens United— a case that helped transmute the nation's campaign financing system into one of unlimited spending and endless electioneering — Clinton may become its beneficiary-in-chief, poised to cash in like no other political candidate has before.

Consider that the Ready for Hillary super PAC has already raised millions of dollars from tens of thousands of donors and plans to transfer its unparalleled resources to a future Clinton campaign machine. Another super PAC, the previously pro-Barack Obama Priorities USA Action that raised more than $79 million during the last election cycle, has begun transitioning into a Clinton shadow operation.

This, for a presidential candidate in Clinton who's not yet one — and may not be for a year or more, if she runs at all.

Compounding Clinton's campaign cash intrigue is her incongruent record of supporting measures that would curb the influence of big money in politics.

She served as a co-sponsor of the Bipartisan Campaign Reform Act of 2001 and voted for the bill that ultimately passed in 2002. She's called for public financing of campaigns, saying in 2007, "when I'm president, I'm going to see if there is a way to do just that." But she also helped usher in the demise of the existing presidential public financing system during her presidential run in 2008. She's also enduredmorethana couple campaign finance scandals during her political career.

The Center for Public Integrity spoke with three people who've closely intersected with Clinton in recent years — either as friend or foe — and who offer insight into the effect a potential Clinton candidacy is already having on the nation's never-ending debate over the way elections are funded:

David Bossie, Citizens United president:

People who appear in "Hillary: The Movie" collectively describe the former U.S. senator and secretary of state as a liar and European socialist who's "steeped in sleaze" and represents a "fundamental danger" to "every value that we hold dear."

No matter, says Bossie, whose conservative political organization successfully sued in the Citizens United case to air "Hillary: The Movie" immediately before elections. (The high court's ruling went much farther, of course, granting corporations, unions and politically active nonprofits the ability to raise and spend unlimited amounts of money to advocate for or against political candidates.)

"I bet Hillary Clinton absolutely loves the Citizens United decision because she knows it's going to help her — it makes her stronger and a more viable candidate," Bossie said. "And yeah, the irony of Hillary benefiting from Citizens United is not lost on me. Frankly, I'm entertained by it."

Bossie chides Clinton for trying to "have it both ways" with campaign finance issues. She positions herself as a reformer one year, then stands by silently the next as legions of supporters and operatives collect Citizens United-sanctioned riches in her name, he says.

If Clinton runs for the White House, expect someone in a Democratic primary to challenge Clinton from the left on campaign finance issues, Bossie predicts.

In the meantime, Bossie says he's content to watch Clinton help further entrench Citizens United as law for years to come.

"Without her, I wouldn't have won a Supreme Court case," Bossie said of Clinton. "She has a special place in my heart."

Adam Smith, 'Texts From Hillary' co-creator and communications director of Public Campaign:

Smith walks a funny line with Clinton.

Professionally, he helps lead an organization that is "dedicated to sweeping campaign reform that aims to dramatically reduce the role of big special interest money in American politics."

Personally, he helped create a Clinton-themed meme so outrageously hilarious that the then-secretary of state fan girled her way into the running joke.

So how do you tell someone who supposedly lords over Mark Zuckerberg, Jon Stewart, Timothy Geithner, John Boehner, Sarah Palin, Anthony Weiner and Politico's Mike Allen that — OMG! OMG! — she's dead wrong on political money issues?

Diplomatically, if at all.

"Politics is full of irony," Smith said with a laugh.

Sure, Smith said, his organization would love to see all candidates regardless of party support a campaign finance system that neutralized the power of big-money political vehicles. But it doesn't seem realistic that Democratic presidential candidates will publicly shun such support while Republican hopefuls delight in it.

"Democrats were slow on the take after Citizens United,” Smith continued. “They are now going to make sure that they use all the tools in that toolbox they've got."

Clinton, Smith added, is "a politician who has to work with the system as it is."

Adam Parkhomenko, Ready for Hillary super PAC executive director:

For Democrats, the first rule about joining the Citizens United club is, apparently, that you don't talk about the Citizens United club.

"We won't have much to say about Citizens United," said Parkhomenko, a longtime Clinton lieutenant who previously led the Draft Hillary for President 2004 committee, then later, worked for her U.S. Senate leadership PAC — HillPAC.

But Parkhomenko is quick to describe Ready for Hillary as a different kind of super PAC.

It's not one, he says, that vacuums millions of dollars from billionaires' bank accounts — hence its self-imposed contribution cap of $25,000. He added the group will not run television ads, the primary communications vehicle for most successful super PACs.

"We've turned the typical super PAC model upside down," Parkhomenko said. "This is all grassroots."

Grassroots with a healthy helping of political Miracle-Gro. The super PAC raised $4 million in 2013, is aided by some of Clinton's most stalwart supporters and recently rented entire email list of Clinton's 2008 presidential campaign, according to TIME. It's also conducting pro-Clinton events across the country, advertising widely online and holds open the possibility that it'll produce radio ads.

Although super PACs and candidate committees are banned from coordinating their expenditures, Clinton isn't a candidate — so Ready for Hillary is effectively free to operate how it sees fit until she is.

The decision to create Ready for Hillary as a super PAC was an easy one for Parkhomenko.

"In my mind," he said, "it was the best kind of committee available ... for what we want to accomplish."

Close relatives of China’s top leaders have held secretive offshore companies in tax havens that helped shroud the Communist elite’s wealth, a leaked cache of documents reveals.

The confidential files include details of a real estate company co-owned by current President Xi Jinping’s brother-in-law and British Virgin Islands companies set up by former Premier Wen Jiabao’s son and also by his son-in-law.

Nearly 22,000 offshore clients with addresses in mainland China and Hong Kong appear in the files obtained by the International Consortium of Investigative Journalists. Among them are some of China’s most powerful men and women — including at least 15 of China’s richest, members of the National People’s Congress and executives from state-owned companies entangled in corruption scandals.

PricewaterhouseCoopers, UBS and other Western banks and accounting firms play a key role as middlemen in helping Chinese clients set up trusts and companies in the British Virgin Islands, Samoa and other offshore centers usually associated with hidden wealth, the records show. For instance, Swiss financial giant Credit Suisse helped Wen Jiabao’s son create his BVI company while his father was leading the country.

The files come from two offshore firms — Singapore-based Portcullis TrustNet and BVI-based Commonwealth Trust Limited — that help clients create offshore companies, trusts and bank accounts. They are part of a cache of 2.5 million leaked files that ICIJ has sifted through with help from more than 50 reporting partners in Europe, North America, Asia and other regions.

Since last April, ICIJ’s stories have triggered official inquiries, high-profile resignations and policy changes around the world.

Until now, the details on China and Hong Kong had not been disclosed.

Read the full investigation on ICIJ.org, and sign up for ICIJ's email newsletter to be among the first to get updates from the "Secrecy for Sale" investigation.

When President Barack Obama’s campaign machine restructured itself as a politically active nonprofit in 2013, one goal was to keep attracting the legions of small-dollar donors who had twice helped catapult Obama into the White House.

Now the numbers are in for 2013, and they show that Organizing for Action, as the pro-Obama nonprofit is known, has been wildly successful.

During its first year, Organizing for Action raised $26.3 million, with 57 percent of that sum coming from people who gave less than $250, according to the Center for Public Integrity’s analysis of records released by the group.

Donors who gave between $250 and $1,000 accounted for another 14 percent of the total.

To be sure, a handful of wealthy Democrats also boosted Organizing for Action’s coffers. But the roughly two dozen donors who each gave between $100,000 and $500,000 accounted for just 16 percent of the group’s total receipts last year.

Katie Hogan, an Organizing for Action spokeswoman, said the group was “proud” of its support from more than 421,000 grassroots donors who have helped the nonprofit work to “tip the scales back towards the American people and away from special interests in Washington."

During its inaugural year, the group advocated for Obama’s signature health care reform law, for action to curb climate change and for gun safety legislation. It has not contributed to candidates’ political campaigns or run advertisements boosting or opposing specific politicians.

Obama’s presidential campaigns in 2008 and 2012 broke records for the enormous sums they collected from individual donors who gave small-dollar amounts.

According to the Campaign Finance Institute, about 61 percent of the $784 million raised by the Obama campaign during the president’s 2012 re-election came from donors who contributed less than $1,000. About 28 percent came from people who gave less than $200.

Four years earlier, about 52 percent of the $746 million Obama raised came from individuals who gave less than $1,000, according to the Campaign Finance Institute. During that election cycle, about 24 percent of the money Obama raised came from people who donated less than $200.

Since its nascent days, Organizing for Action has promoted itself as a grassroots group — and an underdog against special interests and lobbyists in Washington.

"Organizing for Action's mission is to put power back into the hands of the American people,” former Obama campaign manager Jim Messina, who is now the national chairman of Organizing for America, wrote in a fundraising email last March. “That's why we won't accept a single dollar from corporations, PACs, foreign donors or lobbyists. This is your movement, not theirs."

Yet Organizing for Action has been criticized by campaign finance watchdogs and Republicans alike for its potential to allow wealthy donors to “buy corrupting influence” with the president.

In 2013, three donors ponied up $500,000 to Organizing for Action, including Chicago media mogul Fred Eychaner, who ranks among the president’s top campaign bundlers and who personally donated $14 million to pro-Democratic super PACs during the 2012 election cycle.

Other Obama bundlers — including David Shaw of New York, Nicola Miner of California and Imaad Zuberi of California — also rank among the donors who gave Organizing for Action at least six-figures in 2013.

As a nonprofit organized under Sec. 501(c)(4) of the U.S. tax code, it is not legally obligated to disclose its donors, but it has opted to do so for all donors who give at least $250 each quarter.

Ben Wieder contributed to this report.

New York Gov. Andrew Cuomo thrust ethics and campaign finance reforms to the top of his legislative agenda yesterday by including the controversial subjects in his 2014 budget proposal. The Empire state had ranked poorly in a national review of ethics and transparency laws by the State Integrity Investigation.

In a speech to the Legislature, Cuomo said the state has become a model for progress in policy areas from education to health care, but that a wave of public corruption cases threatens to undermine those efforts.

Cuomo called for a host of changes to address the challenge, including public financing for elections, more robust disclosure of outside income for lawmakers and stronger criminal statutes covering public corruption. He said lawmakers must adopt a zero tolerance policy.

“What ethics reform says to the people of this state is, ‘I get it. I get that that’s wrong,’” he said.

New York officials — legislators in particular — have been the focus in a rash of criminal cases and corruption scandals in recent years, covering everything from embezzlement to bribery to sexual harassment. Lawmakers have shown particular acumen using charitable organizations in schemes to bilk public funds, as the Center reported last year.

The state earned an overall grade of D from the State Integrity Investigation, a project of the Center for Public Integrity, Global Integrity and Public Radio International. New York received Fs in four of fourteen categories, including ethics enforcement agencies (and, ironically, for its budget process).

This isn’t the first time Cuomo has pushed for reforms. In 2011, the governor succeeded in winning passage of an overhaul of the state’s ethics commission. Despite some early criticism, good-government groups have praised the new panel as a major improvement over its predecessor.

Cuomo first proposed many of the changes included in this year’s budget as part of an anti-corruption package he announced in June. When those proposals went nowhere, Cuomo appointed a special commission to investigate corruption in the legislature and examine the state’s campaign finance and lobbying laws, a move some lawmakers said was an abuse of the governor’s powers. In December, the commission issued a sharp rebuke of the legislature and the laws, saying it had found “deplorable conduct, some of it perfectly legal yet profoundly wrong; some of it potentially illegal.”

According to the report, one in eleven lawmakers to leave the legislature since 1999 have done so “under the cloud of ethical or criminal violations.”

But Cuomo’s inclusion of the reform proposals in the budget raises the stakes, said Susan Lerner, executive director of the advocacy group Common Cause New York.

“This is big news,” she said. Lerner had high praise for Cuomo’s campaign finance proposals, which include new limits on donations and a public financing system based on New York City’s, which matches donations up to $175 6-to-1. While Cuomo and lawmakers have proposed some of the changes before, their introduction generally came late in the session, after a budget had passed, when they had little chance for success. Lerner said their inclusion in the budget, along with a growing call for change from the public, will make it hard for Senate Republicans to oppose the measure. “It becomes I think more and more difficult for the Republicans to say, oh well, we’re not going to do anything.”

Senate Republicans, who control the upper chamber with a faction of independent Democrats, have not supported previous efforts to reform the state’s campaign finance laws. Last year, Senate GOP leader Dean Skelos gave an interview in which he expressed doubts about public financing, saying he was skeptical people would want to devote their taxes to help pay for “robocalls.” Democrats control the Assembly and have pledged  support for campaign finance reform in the past.

Skelos did not immediately return a request for comment for this story.

Cuomo, who has already raised $33 million for his re-election bid this fall, said in his speech on Tuesday that it was “inarguable but that the amount of money in politics has created a number of difficult issues.”

He waited until the end of his address to raise ethics and campaign finance, framing it as the last piece of a grand puzzle to remake New York politics. Looking back over his three years in office, he told the Legislature they all had much to be proud of, with one exception. “The one omission,” he said, “is ethics.”

More than six months in the making, our global partners at the International Consortium of Investigative Journalists have published the latest chapter of their "Secrecy for Sale" investigation into offshore tax havens. Here, ICIJ Deputy Director Marina Walker Guevaradescribes the unique and unprecedented challenges encountered during this deep-dive into China's offshore economy: 

The tight group of journalists gathering in Hong Kong on a rainy summer morning had arrived from all over: Beijing, Taipei, New York, Madrid, Washington, Berkeley and Munich.

A veteran Chinese journalist greeted the group and talked about the “historic” nature of the meeting: journalists from Greater China coming together to work on a highly sensitive investigation alongside colleagues from Europe and the U.S. 

The meeting kicked off a six-month probe into the offshore holdings of China’s elite that the International Consortium of Investigative Journalists begins publishing today with media partners from around the world. Along the way, the journalists faced cultural and linguistic barriers, government intimidation and the daunting task of sifting through thousands of secret financial records.

The Greater China files are the largest segment of the 2.5 million leaked offshore records ICIJ obtained and has analyzed with more than 50 media organizations since 2012. The documents reveal the real owners and the dealings of more than 100,000 companies in 10 offshore jurisdictions. 

The stories previously published in the “Offshore Leaks” series have had impact across the globe, triggering inquiries, resignations and policy changes in several countries. 

Due to the complexity and language challenges posed by the China, Hong Kong and Taiwan records, ICIJ set aside files related to those jurisdictions for a later installment in the series. 

With China continuing to step up media censorship, security quickly became one of the China project’s biggest priorities. At the end of the Hong Kong meeting all project members returned to their newsrooms equipped with encryption for email communications. An encrypted online forum was used to swap findings and tips safely. Even within the forum, certain top officials were referred to using only previously agreed code names. 

The other challenge was the data itself. How to separate the extraordinary from the routine and find the public interest inside a maze of more than 37,000 offshore company holders? A first step was to build as many lists as possible of public figures: Politburo members, military commanders, mayors of large cities, billionaires listed in Forbes and Hurun’s rankings of the mega-wealthy and so-called princelings (relatives of the current leadership or former Communist Party elders). 

Through painstaking database work, a reporter in Spain cross-referenced the lists of notable Chinese against the names of offshore clients listed within ICIJ’s Offshore Leaks data. The added difficulty was that in most cases, names in the offshore files were registered in Romanized form, not Chinese characters. This made making exact matches extremely hard, because Romanized spellings from Chinese characters tend to vary widely: Wang might be spelled Wong, Zhang could be Cheung, and Ye might be spelled Yeh. Addresses and ID numbers helped confirmed many identities but many others names were dropped because the reporting team could not be 100 percent sure that the person was a correct match. 

A picture slowly began to emerge: China’s elites were aggressively using offshore havens to hold assets, list companies in the world’s stock exchanges, buy and sell real estate and conduct their business away from Beijing’s red tape and capital controls.

Read the rest of Marina's post at ICIJ.org, or see the data in action in the main China leaks story here.

Corporate dollars have helped bankroll a host of political events and parties benefiting Democrats and Republicans alike, according to a Center for Public Integrity review of records voluntarily released by some of the nation’s largest companies.

For instance, records show New Orleans-based energy company Entergy Corp. donated $50,000 to Mississippi 2012, a nonprofit group established for“organizing, planning and implementing” activities related to the January 2012 inauguration of Republican Gov. Phil Bryant.

Mississippi 2012, which is organized under Sec. 501(c)(4) of the U.S. tax code as a social welfare nonprofit, is not required to publicly disclose its donors. The same rule applies to all 501(c)(4) nonprofits.

Tax records show Mississippi 2012 raised $507,500 in 2011, the most recent year for which data was readily available.

Like Entergy, tobacco giant Altria Group Inc. and drugmaker Eli Lilly & Co. both self-reported contributions to the nonprofit — giving $10,000 and $1,000, respectively.

In 2013, Eli Lilly also contributed to nonprofits linked to gubernatorial inauguration activities in Delaware and Washington state, according to company documents.

Greg Kueterman, a spokesman for Eli Lilly, said the company doesn’t “elaborate on individual contributions.”

The company’s website states it is “committed to backing candidates of any party who support public policies that contribute to pharmaceutical innovation and the health needs of the patient.”

David Sutton, a spokesman for Altria, also declined to comment.

John Arledge, the vice president of public affairs for Entergy Mississippi, Inc., said that "there is little to no public funding of these statewide celebrations, so companies like ours are often asked to help support these events."

"These contributions come from our company, not our customers,” he continued, adding that the company works with elected officials across the state to "promote positive growth and quality of life in the communities we serve."

The Center for Public Integrity uncovered these donations as part of a comprehensive review of voluntary disclosures by companies that outlined their giving to politically active nonprofits and trade associations. This research revealed more than $185 million given to more than 1,000 nonprofits in a roughly one-year period around the 2012 election.

Other examples of corporations funding political conventions and inaugurations include Capital One Financial Corp. disclosing a $5,000 contribution to a politically involved nonprofit ahead of the 2012 Democratic National Convention in Charlotte.

The recipient of Capital One’s giving? The Minnesota-based Midwest National Convention Fund, which was designed to faciliate “the sharing of ideas between business, community and political leaders while enhancing Minnesota’s and the Midwest’s profile at the Democratic National Convention.”

The fund, which raised $151,000 during 2012, lists its president as Hubert H. “Buck” Humphrey IV, the grandson of former Democratic Vice President Hubert Humphrey.

That year, national Democrats broke with past policy and banned companies from directly contributing to the committee tasked with hosting the national convention. But corporate money still buoyed a related nonprofit that helped provide support for convention-related activities.

Meanwhile, oil company Phillips 66 self-reported a $10,000 contribution to a Florida-based group called Conventions 2012 LLC — money that was used to “support an event at the 2012 Republican National Convention,” according to Janet Grothe, a spokeswoman for Phillips 66.

The limited liability company touts its ability to help clients succeed “whether your goal is to connect with important decision makers, get the voters and the media to focus on your agenda or simply to host a great event with all the right people in attendance.”

It is connected to a trio of Republican political figures, including attorney Emmett “Bucky” Mitchell IV, according to state business records.

Sheila Krumholz, executive director of the nonpartisan Center for Responsive Politics, which tracks political fundraising, said such contributions may be attempts “to curry favor.”

“It's a great way to increase the likelihood that they and their political agenda receive favorable consideration by those who control the levers of power,” Krumholz said.

Chinese authorities moved aggressively on Tuesday and Wednesday to block online access to news reports exposing the secrecy-cloaked offshore holdings of China’s political and financial elites.

(Download a PDF of the investigation in Mandarin here)

Internet censors prevented readers in China from seeing investigative stories by the International Consortium of Investigative Journalists and several of its publishing partners, including Spain’s El País,Le Monde, Süddeutsche Zeitung in Germany, the Canadian Broadcasting Corp., and the U.K. and U.S. editions of The Guardian, according to reports from news organizations and analytics by GreatFire.org, which monitors web censorship in China.

China routinely censors online domestic content and blocks foreign social networking websites such as Twitter and Facebook, but the broad news blackout targeting so many international media outlets was unusual in its scope. Individual sites have been targeted in the past, including The New York Times and Bloomberg, which separately saw their sites blocked after releasing reports on elite wealth in China.

In Beijing, a spokesman for the Ministry of Foreign Affairs Qin Gang dismissed the story calling it “hardly convincing” and said it raises “suspicions over the motives behind it."

ICIJ’s story was released in China early Wednesday and coincided with the trial of prominent Chinese legal advocate Xu Zhiyong, a campaigner for greater financial transparency. Xu could face up to five years in jail for activities linked to his campaign to get officials to publicly disclose their financial assets. In a symbolic protest against the proceedings, Xu and his attorneys refused to speak during the trial, the Washington Post reported.

Read the rest at ICIJ.org.

President Barack Obama ramped up efforts to combat campus sexual violence Wednesday, launching a federal task force to aid colleges and universities in their responses to the problem, which was the focus of a landmark investigation by the Center for Public Integrity.

Flanked by senior members of his Cabinet at a White House ceremony, Obama signed a memorandum establishing the so-called White House Task Force to Protect Students from Sexual Assault. Consisting of the Education and Justice Department secretaries, among other administration officials, the interagency group is meant to help schools prevent sexual violence on their campuses, and beef up federal enforcement efforts when they don’t.

“The prevalence of rape and sexual assault at our Nation’s institutions of higher education is both deeply troubling and a call to action,” Obama wrote in his memorandum. “Although schools have made progress in addressing rape and sexual assault,” he said, “more needs to be done to ensure safe, secure environments for students of higher education.”

Charged with developing “a coordinated Federal response to campus rape and sexual assault,” the task force will target many of the issues highlighted by the Center’s investigation. Published in a six-part series starting in 2009, “Sexual Assault on Campus: A Frustrating Search for Justice”— done in collaboration with National Public Radio — showed that campus judicial proceedings regarding allegations of sexual assault were often confusing, shrouded in secrecy, and marked by lengthy delays. Those who reported sexual assaults encountered a litany of institutional barriers that either assured their silence or left them feeling victimized again. Even students found “responsible” for alleged sexual assaults often faced little punishment, while their victims’ lives frequently turned upside down.

A new report, released yesterday by the White House Council on Women and Girls, describes college students as “particularly vulnerable” to rape and sexual assault, noting that one in five women have become a victim while in college. Entitled “Rape and Sexual Assault: A Renewed Call to Action,” the 38-page report details the Obama administration’s actions against sexual violence in prisons, the military, and on tribal reservations. But it calls campus sexual assault “a particular problem,” noting that “the dynamics of campus life appear to fuel” such incidents.

“Because campus sexual assault is the subject of intersecting federal laws, policies, and grant programs, it is a key area for improved interagency collaboration,” the report states, alluding to the new presidential task force.

In his memorandum, Obama ordered his task force to make policy recommendations in 90 days.

Read the Center’s investigative pieces from the Campus Assault series here and here:

T-Mobile, the nation’s No. 4 wireless carrier, is keeping up the investment in Washington lobbying that’s helped the upstart compete against its far bigger rivals by buying companies and acquiring better frequencies.

T-Mobile, which is only a fraction of the size of its giant rivals AT&T and Verizon, began bulking up on Washington muscle after AT&T announced it planned to buy its smaller rival in 2011 and then doubled down when the Justice Department blocked the deal. The lobbying investment is intended to help T-Mobile turn telecommunications policies to its favor.

T-Mobile -- which has also cut prices to better compete – spent $5.2 million on lobbying in 2013, according to the latest filing in the Senate’s Lobbying Disclosure Act Database.  That’s almost unchanged from the prior year but represents a 74 percent increase from 2010.

Despite the increased spending, T-Mobile is not in the class of its bigger rivals. No. 2 wireless carrier AT&T spent $15.9 million on lobbying in 2013, and Verizon Communications Inc., the largest,  doled out $13.4 million.

T-Mobile's sharp increases began in the second quarter of 2011, shortly after AT&T announced it planned to buy Deutsche Telekom AG’s 67 percent ownership stake in T-Mobile for $39 billion. In August 2011, the Justice Department filed a lawsuit to block the purchase, arguing that it “would substantially lessen competition for mobile wireless telecommunications services across the United States.” By December, AT&T gave up fighting the department and dropped the deal.

That meant T-Mobile had to upgrade its inferior network if it wanted to compete with the giants and attract new customers. It needed help in Washington to gain  Federal Communications Commission approval to purchase other wireless companies and ensure new policies make it easier for the smaller carrier to buy more spectrum.

In the first quarter of 2012, immediately after AT&T ended its bid, T-Mobile spent $1.1 million on lobbying, a 53 percent increase from the first quarter of 2011. The spending continued to go up in subsequent quarters.

“My guess is they see this as a good investment, and they have to double down to fight the good fight across the board,” said Jeff Silva, senior policy director for telecommunications at Medley Global Advisors in Washington, D.C.

Silva said the investment has paid off. The FCC and the Justice Department last year approved T-Mobile’s purchase of MetroPCS, which boosted network speeds. T-Mobile has also been able to close some deals to gain more spectrum and is currently seeking approval of the purchase of more frequencies in a deal with Verizon Wireless.

“It appears to me, when looking at everything that has transpired since the merger was blocked, that increased lobbying has been a solid investment and a good use of their money,” Silva said. “They have scored a series of victories and gained ground in the policy arena since that point.”

T-Mobile’s lobbying prowess will be tested this year, as the FCC writes rules for a first-of-its-kind auction of frequencies that are currently licensed by TV broadcasters. The spectrum, in the 600 MHz band, is highly desirable because it travels long distances and penetrates buildings better than higher frequencies. T-Mobile wants the FCC to cap the amount of frequency that AT&T and Verizon can buy.

“I suspect that they are going to keep their foot to the pedal on lobbying this year,” Silva said.
 

“Shelves are as clean as they could get. Flushed everything like a dead goldfish.”

That’s what a key supervisor in charge of reviewing federal security clearances told a superior in April 2010, in a message boasting about how he and his colleagues had approved numerous clearances and sent them on to the federal Office of Personnel Management without conducting required quality reviews.

The quote, which federal prosecutors say appeared in an email sent between two senior employees at a federal contractor called US Investigative Services (USIS), appears in a court filing by the Justice Department on Jan. 22 that supports and adds startling detail to a whistleblower’s previous legal claim against the firm.

The filing bluntly accuses USIS, which OPM pays to review security clearance applications for more than 100 federal agencies and departments, of deliberately defrauding the government from March 2008 through at least Sept. 2012 by pretending it conducted quality reviews that actually never occurred.

It says this fraud was not perpetrated by rogue employees, but orchestrated by the firm’s leadership as a matter of official policy. The motive was greed, according to the filing. “USIS management devised and executed a scheme to deliberately circumvent contractually required quality reviews … to increase the company’s revenues and profits,” it states.

The firm’s desire to complete its work quickly and the heavy pressures it placed on employees to comply with unrealistic investigative deadlines were described by the Center for Public Integrity in October 2013. Multiple employees reported then that these pressures became particularly intense before the end of every quarter, when the company strove to close as many investigations as possible to boost its earnings and report higher income.

The initial impetus for speed in security clearance reviews came from Congress, which passed a law in 2004 demanding that most be finished in 60 days. But the practice at USIS of skipping required quality reviews and sending them along — known as “flushing” the investigations — became frequent after private equity investors acquired the firm in 2007, they said.

In the 25-page court filing, by an assistant attorney general in the Justice Department’s civil division and a U.S. attorney in Alabama, the Justice Department describes how systematic this was — to the point where it was assisted by special software that attached a notation to unreviewed records asserting that they had been reviewed, even when they had in some instances never been opened.

It said an unnamed “Workload Leader” at a USIS office in western Pennsylvania oversaw most of the dumping, which increased as reviewers regularly failed to meet increasingly ambitious internal goals. The firm’s chairman set the revenue targets and its chief financial officer enforced them by deciding “how many cases needed to be reviewed or dumped,” the filing said. The orders were passed down by telephone, in meetings, and occasionally in emails.

USIS, in a prepared statement emailed by a spokeswoman who insisted that her name not be used, said “integrity and excellence are core values at USIS that guide the work of our outstanding 6,000 employees, many of whom have served our country in the military or through other government service. The alleged conduct referenced in the civil complaint is contrary to our values.”

The statement further said the allegations “relate to a small group of individuals over a specific time period … Since first learning of these allegations nearly two years ago, we have acted decisively to reinforce our processes and management to ensure the quality of our work and adherence to OPM requirements. We appointed a new leadership team, enhanced oversight procedures, and improved control protocols. From the outset, we have fully cooperated with the government’s investigation.”

The filing accused those involved of attempting to hide their systematic faking of quality reviews, partly by cutting back on dumping when audits were scheduled, and partly by lying in a letter to OPM after the agency expressed concerns. “We do not want the customer to see this,” a USIS employee said in an April 2010 e-mail to one of the firm’s quality control managers.

The discovery of the alleged scheme is problematic for both the firm and for OPM. USIS, headquartered in Falls Church, Va., not only was responsible for conducting and reviewing its own investigations, it also was paid to review background investigations conducted for OPM by other contractors. The Justice Department said that at least 665,000 of the investigations it told OPM had been completed were not subjected to required quality checks.

While it did not fix a precise financial value on the flawed work, the filing said the government supported the claims of the whistleblower — a former director of fieldwork services at USIS — for damages equivalent to triple the fees the government paid, plus penalties of between $5,500 and $11,000 for each fraud. It also said the firm had improperly obtained $11 million in bonus payments, given partly for its speedy work.

The company, which was created by privatizing part of OPM in the mid-1990’s in a deal that gave many of its employees valuable stock, had revenues in 2010 of roughly $680 million, an executive of the firm said. Two of those whose security files it reviewed and approved became notorious recently: One was NSA contractor Edward Snowden and the other was Aaron Alexis, whose shooting spree at the Navy Yard in Washington last September killed 12 others.

Just days after the Obama Administration urged schools to back off harsh school discipline, a federal civil rights complaint filed in North Carolina this week alleges that school police have “violently tackled” students, pepper-sprayed teens and handcuffed, interrogated and arrested students on baseless accusations without informing them of their rights or calling parents.

The complaint filed Wednesday on behalf of eight Wake County, N.C. students recounts multiple incidents of alleged abusive police behavior, most of them involving African-American students. One alleged incident mentioned in the complaint resulted in the arrest of seven students last spring for disorderly conduct or assault after a prank involving a water balloon fight.

The incident at a Wake County public high school in Raleigh last May sparked public outcry, as media reports revealed what some parents considered an excessive police reaction. As a local TV station reported, a parent who tried to approach a school principal and talk about what he thought was excessive manhandling of students said he was confronted by officers, threatened with being Tasered and then arrested for second-degree trespassing. 

 “We leave those decisions up to the Raleigh PD,” a school spokeswoman told local media when asked if she thought arrests were excessive.

A slightly built 15-year-old student who was not arrested was also interviewed by local television and showed how he was bruised and scraped—and went to a hospital — after an officer forced him down on the ground.  

The complaint filed Wednesday describes a host of additional allegations previously unknown to the public.

In 2011, according to the complaint, an 11^th grade boy identified as T.W. was pulled out of a line while waiting for his new class schedule, asked to prove he was a student and pinned against a wall by two officers as a teacher tried to confirm to the officer that the boy was indeed a student.

An officer took the boy into the principal’s office and searched him, told him to take off his shoes and began to interrogate him about drugs and demand information about drugs — for which he allegedly told the boy he could get paid, the complaint alleges.

The boy was suspended from school for having a lighter, the complaint says, and given “a citation to adult criminal court for interfering with a police investigation.” The boy and his mother had to make four court appearances, the complaint alleges, during which the school officer told the judge that he had approached the boy initially because he looked old to be in school. Charges were dropped.

The boy — whom the complaint says continued to be harassed by the officer — eventually dropped out of school.

The complaint also alleges that a 16-year-old with severe emotional and learning disabilities was manhandled and handcuffed by a police officer during two minor incidents when he became agitated — in spite of an individual learning plan advising that the boy was best calmed by walking him through hallways and speaking to him.

The boy also was arrested after a brief altercation with a student who had bullied him, the complaint says, and put into a holding cell at a jail with adults until after 11 p.m. — all without the school informing his parents.

The complaint is filed against the Wake County Public School System, the Raleigh Police Department and a number of other law enforcement agencies. It asks for intervention from the U.S. Department of Justice’s Civil Rights Division, whose educational opportunities section has been investigating other complaints of excessive discipline and harsh policing around the country.

The Wake County school system said its leadership is reviewing the complaint and had no immediate comment. The Raleigh Police Department said in a statement it hasn’t received the complaint, so “it is too soon to know if comment on behalf of the department would be appropriate.”

“Over the course of the past five years,” the complaint claims, “the unregulated use of law enforcement officers to address school discipline matters has resulted in thousands of Wake County Public School System students, predominantly African-American students and students with disabilities being deprived of their educational rights and sent to juvenile or criminal court as a result of minor misbehavior that occurs at school.”

The complaint also says that “even though SROs (school resource officers) patrol schools on a daily basis and can have significant, life-changing impacts on the lives of students … there are no comprehensive regulations in place that clearly define the roles and limitation of law enforcement officers in addressing student behavior.”

More than a dozen organizations filed the complaint, including the National Association for the Advancement of Colored People, the American Civil Liberties Union of North Carolina Legal Foundation and several university law clinics in the state.

The complaint says that no data has been maintained or released documenting how many students have been referred to adult court from school — which can result in permanent records for students.

In North Carolina, minors 16 and 17 are automatically referred to adult court, which jeopardizes students’ ability to put allegations of infractions behind them that should have been dealt with at school, without police involvement, groups that filed the complaint say.

Complaints about spiraling school suspensions and excessive school police intervention have been building nationally in recent years.

On Jan. 8, the U.S. Department of Justice and Department of Education jointly released federal guidelines — an unprecedented move — explaining and urging the use of alternatives to suspending and expelling students.

Disciplinary action that removes students for low-level infractions, research has shown, often fails to correct behavior and leaves students further behind academically,  and more disengaged. 

School police, the guidelines urge, should have well defined roles and limits and not get involved in routine disciplinary matters. Secretary of Education Arne Duncan said, in unveiling the guidelines,  that “most exclusionary and disciplinary actions are for non-violent student behaviors, many of which once meant a phone call home.”

The Center for Public Integrity has investigated reports of questionable police tactics nationally inside schools, including incidents involving police in California and Utah who rounded up students who were all Latino or black — and had not been accused of any wrongdoing — but who were interrogated, forced to pose for mock mug shots and asked for information that was put into files.

North Carolina has already fallen under scrutiny because of complaints that black students have been suspended at greater rates than white students for the same types of infractions of school disciplinary policies, as the Center has reported.

A super PAC that attempted to boost the candidacy of Republican Gabriel Gomez during last year’s special U.S. Senate election in Massachusetts has been disbanded, according to paperwork recently filed with the Federal Election Commission.

Americans for Progressive Action, as the group was named despite its staunch support for the conservative Gomez in the race against Democratic Rep. Ed Markey, raised $1.7 million during its short existence — all from California vintner John Jordan.

Ahead of the June 2013 election, Jordan told the Wall Street Journal that he “just couldn’t sit by and watch and leave [Gomez] alone while the establishment Republican groups decided to sit on their hands and just leave him on the beach.”

Jordan did not immediately respond to a request for comment from the Center for Public Integrity. Nor did Nancy Watkins, the super PAC’s treasurer.

Markey ultimately beat Gomez by about 10 percentage points, after out-raising his campaign and benefiting from millions of dollars in spending by Democratic super PACs and environmental groups.

Senate Majority Leader Harry Reid, D-Nev., recently predicted that Democrats will successfully defend their Senate advantage over Republicans following the 2014 midterms.

But since late December, in a bid to raise big bucks, the Democratic Senatorial Campaign Committee has shown little such confidence, expressing itself with equal parts hysteria, hyperbolie and doomsaying.

The degree to which it does so well exceeds the routinely over-the-top national party fundraising efforts by Democrats and Republicans alike, all of whom employ provocative subject lines to attract readers' attention — and dollars.

"Deep trouble" is the title of a missive from Reid, via the DSCC, on Dec. 13.

"Republican groups — including one backed by the Koch brothers — are redoubling their efforts to destroy [the Affordable Care Act] by spending millions on deceitful attacks against Democrats in key battleground states," Reid writes. "If Democrats can’t urgently respond to these attacks, it could put our Senate majority in jeopardy."

Relatively standard political fare, so far. But the gloom had just begun.

"Critical" is the subject of a Dec. 18 dispatch from the DSCC.

It's followed in December by messages entitled "Nervous," "Revolting," "BLINDSIDED," "Deep Trouble," "Catastrophe," "Heavy toll," "Doomed," "Bad news first," "Disgusting," "Doomed" (again), "I won't sugarcoat this" and "Panicking."

Senate Democrats' romp through diagnosable disorders continues in January with "I need your urgent help," "Doomed" (for a third time), "Catastrophic," "A crushing blow," "Disastrous," "This is disturbing," "Disgusting and angering" and "serious trouble."

Reid on Friday wrote of being "in danger." By Saturday, matters had become "dire."

Most of these DSCC messages present billionaire industrialists David and Charles Koch as the Democrats' arch enemies. Senate Minority Leader Mitch McConnell periodically plays the role of the Kochs' elected henchman.

The messages often go on to warn how Senate Democrats are at grave risk of being outspent during the 2014 midterm elections, and, in the words of one plea, how the "Koch brothers are now shoveling limitless amounts of cash into must-win Senate battlegrounds to drag down strong Democrats. Right now, we’re being significantly outspent."

They also seemingly contradict the scant feel-good communications the DSCC has sent its supporters of late, such as a New Year's message from Executive Director Guy Cecil that reads: "Together, we closed out 2013 strongly and raised an incredible $20 million from grassroots supporters to protect our Democratic majority and stop a Republican Senate takeover. That amazing total puts us in a great position to grab the momentum heading into the election year."

Officials at the DSCC declined to answer Center for Public Integrity questions about their pessimistic messaging.

The National Republican Senatorial Committee's come-ons, meanwhile, have been consistently upbeat during December and Janaury.

"Can I count on you?," "We have great candidates," "Friend, this is it" and "The Key to Success" are among recent lead-ins.

If anything, Senate Democrats have more reason for optimism than their Republican counterparts, at least by one measure.

The DSCC's most recent campaign finance filing indicated it had about $12 million cash on hand and $5 million in debt, for a net $7 million. That's more than the NRSC, which reported $6.4 million cash on hand and no debt.

Republicans need a net pick up of six seats to retake the majority. This fall, Democrats will be defending seven seats in states carried by Republican Mitt Romney in the 2012 election.

If you go to 601 Pennsylvania Avenue, N.W., Suite 500, in Washington, D.C. in search of what you’ve been told is the address of a grass roots organization concerned about “cuts” to Medicare, you will likely be surprised what you find there.

You will indeed find an organization that is lobbying hard to keep federal dollars flowing, but it is anything but grass roots.

Ads supposedly sponsored by the Coalition for Medicare Choices started appearing last week on buses and subway trains and on Washington TV stations warning that seniors will face higher costs, fewer benefits and a loss of provider choice if Congress and the Obama Administration don’t take action to keep planned rate cuts from going into effect.

The ads are part of what POLITICO described as “the new seven-figure campaign … that is the group’s biggest mobilization to date for Medicare Advantage,” the alternative to traditional Medicare that is operated by private insurance companies.

The real sponsor of the ads is the real tenant of 601 Pennsylvania Avenue., N.W., Suite 500: America’s Health Insurance Plans, which is one of the best-funded and influential lobbying and PR outfits in the nation’s capital.

As I noted last week, several insurance companies make a boatload of money by participating in the Medicare Advantage program. The Government Accountability Office noted in a recent report that the federal government spent about $135 billion on the Medicare Advantage program in 2012 alone. And much of that was in the form of overpayments that the government has been sending to private insurers for years.

Brian Biles, professor of health policy at George Washington University, explained in testimony before the Senate Committee on Aging last Wednesday that Medicare has paid private plans more than the costs of traditional Medicare since 1997 when Congress authorized extra payments to entice private plans to operate in rural areas. Six years later, those extra payments were extended to just about all private Medicare plans.

Biles testified that those extra payments to Medicare Advantage plans nationwide averaged 13 percent—or $1,100 per enrollee—in 2009. The Congressional Budget Office projected that year that the excess payments would total more than $150 billion over ten years.

As lawmakers were debating health care reform in 2009, they inserted a provision in what became the Affordable Care Act to get rid of those overpayments. Alarmed, AHIP has been hard at work ever since trying to figure out how to keep the Centers for Medicare and Medicaid Services  (CMS) from carrying out that provision of the law.

And for good reason. Insurers like UnitedHealth and Humana with a substantial number of Medicare Advantage enrollees are able to convert those excess payments into hefty profits. Financial analysts at Goldman Sachs estimated a few years ago that 66 percent of the net income at Humana, where I used to work, came from its Medicare Advantage business. 

Not all of that money goes to profits, however. Some of it is used to add benefits like dental and vision and gym memberships, which many seniors enrolled in the plans do indeed value. But another big chunk of the extra payments goes to advertising and sales activities—and to AHIP to finance the group’s lobbying and PR campaigns.

The Coalition for Medicare Choices current campaign is heavy on intimidation, all of it directed toward members of Congress. Under the headline, “Seniors are Watching,” is this warning:

“In 2010, Seniors saw Washington cut Medicare Advantage funding by $200 billion, causing rate cuts that already hurts them. Now more rate cuts are looming. Rate cuts that would mean higher costs, lost benefits and lost provider choices for seniors. As next year’s Medicare Advantage rates are being set, seniors are watching more closely than ever. They don’t want to see any more rate cuts. More than 1.5 million seniors are ready to defend the Medicare Advantage coverage they like and want to keep. They know from experience that seeing is believing.”

That reference to “coverage they like and want to keep” is, of course, a not-so-subtle reference to President Obama’s ill-advised assurance that “if you like your health care plan, you can keep it.”

And there was this thinly veiled threat in the POLITICO story from “an insurance industry source familiar with the campaign:”

“If CMS doesn’t keep Medicare Advantage payment rates flat next year, it is going to create a huge political problem for members of Congress this fall when they have to face millions of angry seniors who just found out they are losing benefits and choices they were promised they could keep.”

Translation: AHIP will be behind those huge political problems during the re-election campaigns this fall.  

As debate over harsh school discipline heats up nationwide, San Francisco is taking a lead role among big cities by formally limiting the role of police on campuses and requiring specific types of training for school-based officers.

The California city known for its progressive politics is putting the final touches this month on a new agreement, or memorandum of understanding, between the city’s police department and schools that’s designed to further restrain law enforcement involvement in routine discipline and ensure that arrests of students are a last resort.

“This is really extraordinary work,” said Matt Haney, a San Francisco Board of Education commissioner, at a meeting of the board this month. “We realize that there is an important role for police officers on our campuses, but only in very specific, narrow situations.”

Karn Saetang, an organizer with Coleman Advocates for Children and Youth in San Francisco, said: “We’re putting the responsibility for student behavior back where it belongs, with educators, students and parents, not with police. When police get involved in school discipline, it sends all the wrong messages to students.”

Coleman Advocates, which pushes the city to fund children’s services, helped draft the agreement, along with Public Counsel, the nation’s largest public interest law firm, which has been involved in reforming discipline policies in various cities.  

Two years ago, an armed uniformed police officer was summoned to a school to deal with a 5-year-old who was having a tantrum, action that further upset the child and his family, according to Coleman Advocates.

The new, more restrictive agreement between San Francisco police and schools says: “Police involvement should not be requested in a situation that can be safely and appropriately handled by the district’s internal disciplinary procedures.”

The document was approved by the board of education in San Francisco on Jan. 14 — with the proviso that the San Francisco Police Department assent to restoration of language that makes police training and other requirements mandatory, not suggested. The softer language was added shortly before the board voted on Jan. 14.   

The San Francisco Police Department did not respond to calls for comment. School administrators who have been working with police said they didn’t think the restoration of stricter language would be “a deal breaker.” San Francisco Police Chief Greg Suhr told ABC News 7 earlier this month that kids helped draft the agreement. I think it’s important that we demonstrate to the kids that what’s important to them is important to us, too,” he said. 

The agreement spells out requirements for graduated steps before a student can be arrested, and details limits on how arrests are to be carried out on campuses, so they are not disruptive or public, if possible, and are not conducted in connection with behavior allegedly committed outside school unless students are in danger.   

Police have discretion but “shall make every effort” not to arrest and refer students to probation authorities until a student commits a third offense after prior admonishments and counseling for low-level infractions. These infractions could include minor school fights that have sometimes been criminalized as battery, battery against a school employee, resisting arrest, disturbing the peace and possession of marijuana for personal use.

The agreement also requires that officers refrain from questioning detained students for at least an hour or until parents have “sufficient time to travel” to a campus from their jobs or home.  

“I think this clause is very important — that students are questioned in the presence of their parents,” said Sandra Lee Fewer, president of the board of education.

Fewer also insisted that the agreement contain the word “shall” as part of a requirement that school resource officers who are based at schools receive at least one day of free training, sponsored by the district, in methods of ‘restorative’ justice. That’s a regime of in-school discipline the district has adopted in an effort to get students to own up to disruption and problems they’ve caused — and, in turn, receive help to address the roots of their poor behavior. 

Earlier this month, the U.S. Department of Justice and Department of Education unveiled federal guidelines for school discipline that Obama Administration officials are urging schools across the country to embrace.  The unprecedented guidelines also emphasize the use of in-school disciplinary practices that limit removal of  a child from the school environment as punishment. The guidelines also emphasize the need for school police training.

In recent years, the administration has expressed concerned about a “school-to-prison pipeline,” or criminalization of adolescent behavior that elevates the risks of youth dropping out and getting into serious legal trouble.

Last week, in North Carolina, civil rights groups filed a 74-page complaint calling for the U.S. Department of Justice to intervene in schools in the Raleigh area,  where students and parents have complained about school police abuse — including alleged harassment and unwarranted arrests of African-American students, especially, as well as violent tackling of students, handcuffing and  interrogation of kids without parental consent.  

New data released this month in San Francisco underscores a significant problem with disproportionate arrests of black kids in San Francisco’s schools and the city at large, a problem the board of education says must be addressed. 

African-American minors represent only 8 percent of San Francisco’s students. Yet close to 40 percent of all students arrested on campuses in the past three years were black and 43 percent of all juvenile arrests in the city during those three years were also African-American.  

During the 2011-2012 school year, data also shows, 133 students were arrested on campuses, with 14-year-olds accounting for 31 arrests — the largest number for any age group of students. Kids as young as eight years old were also arrested.

While some of the arrests overall were for serious accusations involving weapons or alleged sexual assaults, the most frequent types of arrests were for broad categories that might have been better handled differently, children’s rights advocates say. The biggest categories of offenses: battery, with 25 arrests; conspiracy, with 21 arrests; and battery on a school employee, with 13 arrests.

In December, school board commissioner Haney called out-of-school suspension rates for black students in San Francisco“shocking.” Black students were 50 percent of all students suspended last year for “willful defiance,” a catch-all category that can range from using foul language to tardiness.

At a school board meeting this month, San Francisco high school student Violet Vasquez told board members she was “overjoyed” to have been involved in the drafting of the new agreement. 

“It creates guidelines to have an easier and more trusting relationship with our SROs (school resource officers),” she said. 

Kevine Boggess, civic engagement director for Coleman Advocates, said: “A lot of the work we do is with African- American and Latino youth who have a lot of negative interaction with the police. We really want to change that dynamic and make schools a safe place for them.”

A New Mexico lawmaker is pushing to have judges’ financial disclosures posted online after the state earned a failing grade in a Center for Public Integrity investigation into public transparency.

State Sen. Jacob R. Candelaria, D-Albuquerque, introduced a bill this month that would require all financial disclosure statements filed by judges and officers of the judicial branch to be posted on the Secretary of State’s website and the state’s Sunshine Portal, which he called the state's go-to-place for government information.

The forms that judges file annually were posted on the Secretary of State's site as recently as 2012, but the practice ceased last year because the existing laws apparently don’t call for it. “The Office of the Secretary of State supports transparency and openness in government, however at this time there is no authorization in statute that permits us to provide these disclosures online,” spokesman Ken Ortiz told the Center. The forms came down after some concerns about security.

Candelaria, who is also a first-year law student, said he was inspired to file the bill by the Center's findings about New Mexico's disclosure. The state earned 38.8 out of 100 possible points for its judicial financial disclosure requirements in the Center’s study. Had the state posted the files online, its score would have improved to 43.8.

"This seemed to be an easy, common-sense fix to make them more accessible to folks," Candelaria said in an interview. “Our courts are just like any other part of government that work best when people have faith in the process." 

He said he will likely introduce an amendment to allow judges' home addresses, emails and phone numbers to be redacted from the reports because of security concerns. The sections listing the judges' names and financial ties would remain public.

The Center evaluated the disclosure rules in all 50 states and the District of Columbia and compared them with those that federal judges face. It then reviewed disclosure reports of more than 300 top judges to flag potential conflicts of interest involving their finances and caseloads.  

Such disclosures help build public confidence in the judicial system by providing transparency about judges' financial ties, judicial ethics experts say.

But getting the forms isn’t always easy. Twelve states currently post at least some portions of the forms online, including California and Hawaii which require among the most detailed disclosures nationwide. But other states only provide them upon request. And three states require that people pick them up in person.

In the wake of the Center’s Justice Obscured investigation, several other states have also proposed reforms. California court officials pledged to review an internal system for catching conflicts of interest after the Center found a judge who owned as much as $1 million of Wells Fargo stock when she participated in a case favoring the financial giant. Wyoming officials posted judicial reports online. District of Columbia officials are reviewing disclosure requirements there. And Montana’s top court proposed judicial disclosures for the first time. 

The Republican Governors Association raised more than $50 million in 2013, loading it's coffers for the upcoming election year in which 36 governors' seats are up for grabs. The off-year fundraising total is less than the RGA raised in 2012, but it's a 66 percent jump from 2009, the last time this many gubernatorial races were held.

The group announced the totals in a press release today.

The RGA was the top outside spending group at the state level in 2012, spending roughly $35 million on television ads in support of or against candidates, and on donations to political action committees. With 36 gubernatorial races in 2014, the group will likely spend far more than that this year.

The group’s Democratic Party counterpart, the Democratic Governors Association, has yet to release its final 2013 numbers, but through the first six months the RGA outraised the DGA by more than $10 million, according to previous filings with the Internal Revenue Service, which regulates the groups. The RGA raised $56.6 million in 2012, nearly twice the $30.6 million raised by the DGA.

Top donors to the RGA in 2013 include David Koch and deceased Republican donors Bob Perry and Harold Simmons, all of whom contributed at least $1 million, according to the organization’s filings with the IRS and the state of Virginia. The group spent more than $8 million in Virginia in 2013 supporting the losing campaign of Republican gubernatorial candidate Ken Cuccinelli, according to the Virginia Public Access Project.

In 2010, the RGA, under the leadership of then-Mississippi Governor Haley Barbour, outraised the DGA by more than $50 million. This year, the RGA is chaired by embattled New Jersey Gov. Chris Christie. Cuccinelli recently called for Christie to resign his position with the political organization.