Articles on this Page
- 05/15/14--14:18: _AT&T, Verizon beat ...
- 05/16/14--03:00: _Foul air in heavily...
- 05/16/14--03:00: _Feds investigating ...
- 05/16/14--14:40: _Center for Public I...
- 05/16/14--12:47: _Why running the Cen...
- 05/19/14--08:13: _Tennessee Supreme C...
- 05/19/14--07:25: _A different way of ...
- 05/20/14--19:29: _Singularity Univers...
- 05/21/14--10:53: _Who’s bankrolling s...
- 05/27/14--14:06: _Nearly $100 million...
- 05/27/14--06:38: _Forcing health insu...
- 05/28/14--14:47: _Labor Department un...
- 05/27/14--11:07: _Center sues in an e...
- 05/27/14--09:43: _GOP challengers get...
- 05/27/14--14:19: _Judge who stopped W...
- 05/29/14--09:05: _Comcast-Time Warner...
- 05/28/14--07:36: _Texas fracking verd...
- 05/29/14--08:02: _Evan Bayh's multi-m...
- 05/28/14--13:30: _Ready for Hillary n...
- 05/29/14--13:20: _'Radical animal rig...
- 05/15/14--14:18: AT&T, Verizon beat back limits on airwaves auction
- 05/16/14--14:40: Center for Public Integrity's executive director stepping down
- 05/16/14--12:47: Why running the Center has been my greatest honor
- 05/19/14--07:25: A different way of thinking about health care
- 05/20/14--19:29: Singularity University disavows super PACs
- Why would a company official create super PACs that either employ the university's name or terms and concepts it frequently uses in its literature and messaging?
- Did Willis lie when saying other university officials were aware of the super PACs and planning to involve themselves with them?
- Are the super PACs not intending to seek donations from wealthy people who associate with Singularity University?
- Has the university directed Willis to terminate the super PACs?
- 05/21/14--10:53: Who’s bankrolling secretive liberal group America Votes?
- 05/27/14--14:06: Nearly $100 million in campaign cash sits idle
- Transfer unlimited amounts to national, state and local political party committees
- Make limited donations to political candidates at any governmental level
- Refund donations from political contributors
- Pay off lingering campaign expenses or debt
- Convert a campaign committee into a political action committee
- 05/27/14--06:38: Forcing health insurers to do what's right
- 05/27/14--11:07: Center sues in an effort to make Medicare Advantage files public
- 05/27/14--09:43: GOP challengers get boost from 'jumbo joint'
Mike Bost, who is challenging Democratic Rep. Bill Enyart in Illinois’ 12th Congressional District
Barbara Comstock, who is running for an open seat in Virginia’s 10th Congressional District
Ryan Costello, who is running for an open seat in Pennsylvania’s 6th Congressional District
Carlos Curbelo, who is challenging Democratic Rep. Joe Garcia in Florida’s 26th Congressional District
Bob Dold, who is challenging Democratic Rep. Brad Schneider in Illinois’ 10th Congressional District
Evan Jenkins, who is challenging Democratic Rep. Nick Rahall in West Virginia’s 3rd Congressional District
Martha McSally, who is challenging Democratic Rep. Ron Barber in Arizona’s 2nd Congressional District
Stewart Mills, who is challenging Democratic Rep. Rick Nolan in Minnesota’s 8th Congressional District
Richard Tisei, who is challenging Democratic Rep. John Tierney in Massachusetts’ 6th Congressional District
- Torrey Westrom, who is challenging Democratic Rep. Collin Peterson in Minnesota’s 7th Congressional District
- 05/29/14--09:05: Comcast-Time Warner deal may hinge on anemic low-cost Internet plan
- 05/29/14--08:02: Evan Bayh's multi-million-dollar head start?
- 05/28/14--13:30: Ready for Hillary no longer just a super PAC
- 05/29/14--13:20: 'Radical animal rights movement' gets new foe
The Federal Communications Commission handed Verizon Communications Inc. and AT&T Inc. a victory Thursday when it agreed on a plan to auction valuable radio signals next year that will allow the two giant carriers to bid on most of the frequencies expected to be up for sale.
The agency was under pressure by consumer groups and smaller wireless carriers such as T-Mobile Inc. and Sprint Corp. to cap the amount of spectrum the wireless giants could buy so as to ensure competition in the industry.
The commissioners voted 3-2 along party lines to reserve just part of the airwaves being auctioned for small wireless carriers, rather than establishing a hard cap on how much spectrum Verizon and AT&T can purchase.
The airwaves that will be sold are those now held by broadcast TV stations in the 600 megahertz range, so-called low-band spectrum that is highly coveted because it can travel long distances and penetrate buildings, characteristics that make it ideal for wireless devices
The FCC plans to run a reverse auction to determine how much broadcasters are willing to sell their airwaves for. No one knows how many broadcasters will sell.
At stake is who will ultimately control the public’s wireless access to the Internet, on which all kinds of data — from medical records and bank transactions to Amazon purchases and movie downloads — travel from providers to smartphones and tablets.
The Center for Public Integrity reported on the upcoming spectrum auction in March.
Verizon and AT&T, which count two-thirds of all U.S. wireless subscribers as customers, control about 74 percent of the low-band spectrum, below 1 gigahertz. If the companies buy more in the 600 megahertz band, wireless experts believe the companies will have an unfair competitive advantage against Sprint Corp., the third-largest wireless carrier, and T-Mobile USA Inc., the fourth largest.
If Sprint and T-Mobile aren’t able to buy enough low-band spectrum in next year’s auction, they may be forced to merge to compete, putting upward pressure on wireless prices and stifling innovation.
Sprint owns licenses for about 12 percent of the low-band spectrum, and T-Mobile owned less than 1 percent before it recently purchased a small amount from Verizon. Most of T-Mobile’s and Sprint’s frequencies are in the higher bands.
“I don’t think the commission went far enough,” said Harold Feld, a senior vice president at Public Knowledge, a consumer advocacy group in Washington that wants to limit how much spectrum each carrier can purchase.
Feld said the commission should have been “more aggressive” in reserving spectrum for smaller carriers.
Feld said the amount of spectrum allocated to smaller carriers will depend on how much is put up for auction by the broadcasters. The first 40 megahertz — or about half of what’s likely to be available — will be completely unrestricted. The more spectrum made available, the more will be reserved for Sprint, T-Mobile and upstarts.
“The FCC has to promote effective competition and public safety,” said agency Chairman Tom Wheeler before the vote. “To promote competition in rural America, carriers must have access to low-band spectrum. We want to make sure there is competition in rural areas. Likewise public safety demands that when you make a 911 call inside buildings, you don’t want to be stuck with a subscription to a wireless carrier that doesn’t allow you to penetrate those walls.”
The FCC’s two Republican commissioners, Ajit Pai and Michael O’Rielly, wanted no limits on how much spectrum carriers could purchase.
“Restricting participation means less spectrum for mobile broadband, less deficit reduction,” Pai said.
AT&T and Verizon dominated the last low-band auction, buying the vast majority of available spectrum. The concern is that will happen again.
Feld said whether the small carrier rules will be enough to create competition in a concentrated wireless market won’t be known for at least five years.
“That’s when we’ll know whether the competing companies have enough of a way forward to get the spectrum they need to stay viable, or they don’t and they need to sell out,” he said.
KARNES COUNTY, Texas—After 23 years living on the South Texas prairie, Lynn and Shelby Buehring are looking for a new home, far from the fumes, traffic and noise of the Eagle Ford Shale boom.
It will mean leaving the white house beneath the oak trees where they expected to live out their retirement. The decision, said Lynn, 58, was a measure of last resort, dictated by her deteriorating health and failed attempts to get help from state regulators.
"We're not anti-drilling at all," she said. "My complaint is they need to do it in a responsible way... It's just causing me a lot of medical issues, and I can't have it."
Buehring's symptoms began when the drilling rigs arrived in late 2011. Her asthma worsened from a seasonal nuisance to the point where she needed two rescue inhalers and made frequent use of a breathing machine. She also developed chest pains, dizziness, constant fatigue and extreme sensitivity to smells.
Today there are at least 57 oil and gas wells and nine processing plants within 2.5 miles of the Buehrings’ house. These facilities have the state's permission to emit hundreds of tons of air pollutants per year, including volatile organic compounds like benzene and formaldehyde and toxic hydrogen sulfide, which aggravate respiratory conditions.
Lynn Buehring now covers her nose and mouth whenever she's outside. On a windy day in early May when this reporter arrived at her house, she wore a mesh cloth mask while walking from the front door to the driveway. She kept it on as she petted the cats—Prissy and Hemorrhoid ("a pain in the butt" who noses his way into everything)—and as she showed off Shelby's "man cave," a barn with a homemade jukebox and decorative beer bottles.
Next to the man cave is a red barn where Buehring runs her tax accounting business. "There's been many a time when my customers will say, 'What is that terrible smell outside?'" she said. The fumes range from a rotten-egg odor (characteristic of hydrogen sulfide, a naturally occurring and sometimes-lethal gas) to an indeterminate chemical smell and something she describes as a combination of petroleum, baby poop and sulfur.
"Sometimes there's a yellow haze or mist out there, and my tax customers have to walk through that," she said. "How dangerous is that?"
Without health studies it's impossible to know whether the emissions are causing Buehring's symptoms. A recent eight-month investigation by the Center for Public Integrity, InsideClimate News and The Weather Channel revealed that despite hundreds of complaints from local residents, Texas regulators know little about air quality in the 26-county Eagle Ford region, which has nearly 9,000 wells and another 5,500 permitted. As many as 23,000 more wells may be drilled by 2018, according to some projections.
Celeste Monforton, a public health researcher and lecturer at George Washington University, said at least some of Buehring's symptoms are consistent with known health problems that can be caused by the types of pollutants emitted from oil and gas facilities. "You're talking about volatile organic compounds, particulate pollution, hydrogen sulfide—we know a lot about how those compounds affect the body."
If public health officials in the Eagle Ford want to know how the emissions are impacting people, they can study the health of local residents and analyze the information for patterns, Monforton said. "Their burden of proof in terms of taking action should not be on each individual person demonstrating that this was the cause of their illness. Their mission and responsibility is to look at what happens to the population."
The Buehrings aren't waiting. They began to seriously consider relocation three months ago, when Lynn's symptoms took a turn for the worse. She developed balance issues and would fall over sideways "for absolutely no reason," she said. Her hands trembled so much she feared she had Parkinson's disease, though a doctor later ruled that out.
Both she and Shelby had trouble sleeping at night due to the industry-driven truck traffic, which tended to peak between 1 and 4 a.m, Buehring said. Soundproof boards they installed over the bedroom windows proved ineffective.
"I told [Shelby], I can't live this way and I can't work this way. Enough is enough." And Shelby agreed "we've got to get out of here."
Two weeks ago, they went house-hunting in Tivoli, a small town in Refugio County near the Texas Gulf Coast. It was the first time in two months that Lynn could breathe outdoors without wearing a mask.
"We went fishing, and just relaxing," she said. "I felt 90 percent better."
'Nobody's there to help'
Buehring's experiences over the past three years have changed how she feels about her country. "I thought we had people in place that were going to help the small man," she said. "And then I find out that the rug's been totally pulled out from underneath me. I feel like I'm one person out there all by myself…and there's nothing I can do. Nobody's there to help."
Buehring has filed numerous complaints with the Texas Commission on Environmental Quality (TCEQ), which oversees air quality within the state. One of her first complaints, in January 2012, described "a terrible odor accompanied by a wet mist that burned the eyes and nasal areas, and caused tightening in the chest."
TCEQ investigator Carol McGrath visited the Buehrings several days later and encouraged Lynn to keep an odor log. McGrath also surveyed seven nearby oil and gas facilities and noted two flares trailing black smoke but no odors. Like many of the facilities near the Buehrings, these sites were owned by Marathon Oil, a Houston-based company worth nearly $25 billion as of 2013.
Over the next few weeks, Buehring kept detailed notes on the air quality near her home:
Feb.18, 2012, 2:30 Strong South Wind. Didn’t notice an odor at first but it gave me an awful migraine headache. The smell was a sulfur sweet smell and my ears plugged up when I went out to take something to the can barrel. I had to do a shot for the migraine and 2 breathing treatments.
Feb. 19 1:00 p.m. Oily smell in the air. Couldn’t tell where it was coming from. Wind direction was changing constantly. 2 breathing treatments.
Feb. 20 no smells noticed 1 breathing treatment
In March, McGrath returned with other TCEQ staff and air monitoring equipment. According to their report, the investigators noted such high concentrations of volatile organic compounds at one Marathon site that they "evacuated the area quickly to prevent exposure." Marathon repaired the leak that same day and no fines were issued. McGrath later collected Buehring's odor log before giving it back, saying it couldn't be used as part of the investigation.
Buehring said that led her to give up on the TCEQ. For most of 2013, she relied on the assistance of Keith Mingus, a local Marathon supervisor. The Buehrings said Mingus introduced himself to them, gave them his phone number and often arrived five or ten minutes after they called with a complaint.
"He was wonderful," Buehring said. "He would try to get to the bottom of it. He didn't push us off—he really sounded concerned."
She said Mingus was transferred out of the region in late 2013. The Buehrings haven't met his successor and don't know who to call at Marathon when there's a problem.
In an email, company spokeswoman Lee Warren said Marathon places "a high value on being a responsible operator and a good neighbor."
She said the company has hosted five community meetings in the Eagle Ford within the last two years, three of which were in Karnes County.
Charlie Malik, chief of Karnes City's volunteer fire department, said Eagle Ford companies have provided his department with additional equipment, including a trailer for fire-fighting foam, hydrogen sulfide monitors and a water truck. "Marathon and all the oil companies around here have been very good to us. All you have to do is ask."
On Tuesday, 15 firefighters from Malik's department responded to a fire at a Marathon well site where workers were pumping oil and other flammable liquids into a tank. Malik said it was a "contained fire" that would have burned itself out in time.
"No injuries were reported and no loss of containment occurred," Warren said in an email.
Desperate for information
Buehring started a new odor log in 2014 after Mingus left Karnes County. She's called the TCEQ eight times since March 19, but only one of those complaints appears in the agency’s online database. Buehring said she left numerous voice mails that were not returned.
TCEQ investigator Jeff Seiler visited the Buehrings in mid-April. Buehring said she asked if he could help her obtain a wind sock—a simple device that indicates the wind direction—from Marathon. She hoped to place the sock in her yard to help determine when it would be safe for her to go outside. She said Seiler told her to contact Marathon directly, but did not provide a phone number.
"They don't care," she said, referring to the TCEQ. "They say they're going to talk to Marathon, they're going to do this and that, and it's fallen on deaf ears, over and over and over."
InsideClimate News called the TCEQ for comment, but agency spokesman Terry Clawson would not discuss anything on the phone and insisted that all questions be placed in writing. In an email, he said the agency doesn't have authority to require regulated entities to provide wind socks. He also said the agency evaluates every complaint it receives, and multiple complaints may be combined into one incident in TCEQ's database if a resident calls repeatedly within a short time frame.
Buehring said she wants the agency to "fine Marathon more, where it hurts them, so some of this would be stopped. And if there's something dangerous around us, inform us so I know [when] I need to stay in."
Buehring has reached out to the office of state Sen. Judith Zaffirini, a Democrat who represents much of the Eagle Ford region, including Karnes County. In a phone interview Thursday, Zaffirini said she would like to know whether stricter air permitting rules used in the Barnett Shale in North Texas should apply in the Eagle Ford, and whether rules could be established to limit how close to schools and homes wells could be drilled.
On Friday, Zaffirini's staff is to meet with the TCEQ to discuss air quality in Karnes County, and whether the state can set up a permanent air monitor in the county.
The Buehrings, meanwhile, are continuing their search for a new home. Lynn hopes to find a house near San Antonio so she has easy access to her doctors.
"Big Oil, Bad Air" is a joint project of the Center for Public Integrity, InsideClimate News and The Weather Channel. Lisa Song is a reporter with InsideClimate News.
Giant health insurer Humana Inc. faces multiple federal investigations into allegations that it overbilled the government for treating elderly patients enrolled in its Medicare Advantage plans, court records reveal.
The status of the investigations is not clear, but they apparently involve several branches of the Justice Department. The U.S. Attorney’s Office in Miami wrote in a court document filed in March that officials expect that at least one of the probes will be completed and the findings made public “in the next few months.”
The U.S. Attorney’s branch office in West Palm Beach, Florida has opened a criminal case involving overbilling allegations that the government says is similar to the Miami investigation. Meanwhile, the criminal division of the Justice Department in Washington has reviewed fraud allegations against the company, according to court records.
Humana, which insures more than 2 million people through the Medicare Advantage plans, is also the target of two Florida whistleblower civil lawsuits that allege similar overcharges.
Federal officials disclosed their legal actions in a series of documents unsealed April 30 in one of the whistleblower suits. That suit alleges that a doctor at a clinic in South Florida inflated billings for two dozen or more Humana patients. The case, filed in September of 2010, was unsealed in federal court in Miami earlier this month. The whistleblower added new allegations of overbilling to the Miami lawsuit on Wednesday.
Humana acknowledged the unsealing of the Miami case in a May 7 Securities and Exchange Commission filing, saying it “was continuing to cooperate with and respond to information requests from the U.S. Attorney’s Office.” Humana disclosed in 2012 SEC filings that federal officials were seeking documents “relating to several matters including the coding of medical claims,” an admission that was reported at the time. But the company has offered no details.
Humana spokesman Tom Noland said in an email on Thursday that the company had made “several public disclosures about these matters over a long period of time.” He said that Humana had “self-reported” the matters to the Justice Department criminal division several years ago, but noted: “Humana to our knowledge is not the subject of any criminal investigation.”
Noland added: “We continue to investigate these matters ourselves and to cooperate with the Department of Justice, as we have all along.”
Humana, based in Louisville, Kentucky, is a major federal contractor. Last year, Humana’s Medicare Advantage contracts in Florida alone covered about 415,200 seniors at a cost of $6 billion, according to the company. Nationwide, Humana treated just over 2 million Medicare Advantage patients last year.
The consequences of the legal cases could be far-reaching for privately run Medicare Advantage plans, which now treat nearly 16 million Americans at a cost expected to top $150 billion this year. The plans are proving popular with seniors because they often provide extra benefits, such as eyeglasses and dental care, and can cost less out of pocket than standard Medicare.
The industry also enjoys growing political support in Congress, successfully fighting off attempts by the Obama administration earlier this year to cut its payments. Lawmakers have argued that rate cuts could harm seniors and limit their choices for health care.
But how best to pay the health plans—and whether the plans are paid accurately—has been contentious for years.
Since 2004, Medicare has compensated the health plans based on patient “risk scores,” a formula that’s so complex that many health professionals don’t even pretend to understand its fine points. Federal law enforcement officials also are struggling to monitor billions of dollars in Medicare payments to the booming industry.
“This is a new area,” said Robert Trusiak, a former Justice Department lawyer. “It’s not that easy a concept.”
Essentially, Medicare pays the health plans higher rates for sicker patients and less for those in good health. Medicare Advantage plans diagnose health conditions of each person they enroll and report it to Medicare, which then calculates a risk score and pays accordingly.
Critics, including some academic researchers and government auditors, have argued that the health plans can inflate risk scores by overstating how sick patients are—improperly driving up their revenues and the costs to taxpayers.
That’s what Olivia Graves, a family physician who has practiced for more than three decades in South Florida, alleges in her whistleblower suit. Graves said she sold her medical practice in 2005 and was paid by a check “endorsed by Humana.” A subsequent filing by the government refers to the clinic as Humana-owned. Graves stayed on to work at the practice, now called Plaza Medical Centers, after the sale, according to the suit.
Plaza Medical Centers is run by Michael Cavanaugh, a physician and Spencer Angel, who is its chief executive officer. Both are defendants along with Humana in Graves’ suit. Reached by phone on Thursday Angel said: “I look at this as a disgruntled employee matter. Other than that, I have no comment.” Angel said Cavanaugh also would have no comment.
Graves alleges that one day in April 2010 a former patient of hers who had been treated by Cavanaugh asked to see her. During the encounter, she noticed that Cavanaugh “had listed several diagnostic codes for the patient that did not apply,” according to the suit.
Graves said that when she confronted Cavanaugh he told her that he “did not give a sh*t,” according to the suit. Graves claims she was fired after she began looking up medical files of other patients and questioning the truthfulness of diagnoses listed.
Her lawsuit cites about two dozen examples of what she claims are improper diagnoses. They include the case of an 84-year-old man who was diagnosed with conditions he did not have, including chronic kidney disease, according to the suit.
Graves amended her lawsuit on May 14, adding new allegations. She stated that the clinic had diagnosed an abnormally high number of patients with conditions such as diabetes with complications, which boosted Medicare payments, but were “not supported by the medical records.” The suit alleges that Humana knew about the practices and did nothing to stop the overcharging. The suit argues that Medicare paid thousands of dollars for each patient who was wrongly diagnosed.
The second whistleblower lawsuit against Humana and related clinics, which was filed in U.S. District Court in West Palm Beach during 2012, remains under seal. Federal officials wrote in court filings that the allegations in the case are “very similar” to the Graves case.
Marlene Fernandez-Karavetsos, acting special counsel with the U.S. Attorney’s Office in Miami, said Thursday that the agency does not comment on pending cases.
Court records show that U.S. Attorney’s Office lawyers in South Florida have tried for years to navigate the complex billing system at the heart of the Graves suit. They asked a federal judge on 11 occasions since 2010 to give them more time to investigate.
Under federal law, whistleblowers sue on behalf of the government and can share in any recovery. Federal officials must decide within 60 days whether to join in the suit. However, federal courts often grant the government extensions—to a point.
U.S. District Court Judge Federico A. Moreno appears to have reached that limit on April 24. With time running out, the U.S. Attorney’s Office declined to join the case. However, government lawyers said their own investigation would continue. Moreno ordered the pleadings unsealed but on May 1, granted an emergency request from the government to redact portions of some filings.
Despite the redactions, court records detail years of back and forth with Humana lawyers over the allegations. Federal investigators in Miami notified the company in December 2011 of the Graves case and since then have met at least three times with the company’s lawyers. The government has reviewed records of about 150 patients treated at three Humana-affiliated clinics.
During those negotiations, Miami-based government lawyers learned that the Justice Department’s criminal division in Washington also had been investigating.
“The U.S. Attorney’s Office for the Southern District of Florida learned of an active, pre-existing investigation of Humana triggered by the disclosure of potential fraudulent conduct by Humana to the Criminal Division of the Department of Justice in Washington,” prosecutors wrote in November 2013.
“The conduct at issue is similar in nature, and both investigations continue to move forward on a parallel basis with close coordination and joint meetings and conferences with Humana,” the filing states.
While many health care companies face whistleblower lawsuits, it’s unusual for a major health insurer to face a criminal probe over billing issues. Often, these sorts of disputes are the subject of administrative audits.
After eight years at the helm, Center for Public Integrity Executive Director Bill Buzenberg announced today that he will be stepping down from the nonprofit, investigative news organization at the end of this year. Following a distinguished 40-year career in journalism, capped off last month when the Center won its first Pulitzer Prize, Buzenberg will make way for new leadership at the Center in 2015.
“My tenure here has been the most rewarding, demanding and invigorating time in my career. I am extremely proud of the Center for Public Integrity’s many accomplishments. I wish to express my sincere gratitude to the reporters, editors and the entire staff who have helped make the Center one of the best investigative news organizations in the nation and the world,” Buzenberg said.
Buzenberg informed the Center’s Board of Directors of his plans in February. The Board has formed a search committee and hired a firm to seek out the organization’s next executive director. To ensure a smooth transition, Buzenberg has agreed to serve as CPI’s chief until a replacement is named.
“I want to extend the Board’s thanks and appreciation to Bill Buzenberg for his remarkable leadership as executive director of the Center,” said Bruce Finzen, chairman of the Center’s board of directors. “Bill’s decision to step down comes at a time when the Center has just experienced one of the most successful years, editorially and financially, in its 25-year history. Bill is definitely leaving on a high note.”
In his tenure as executive director, Buzenberg worked with the Center’s talented journalists on some of the most important investigative articles the organization has ever produced. Last year, the Center’s International Consortium of Investigative Journalists produced “Secrecy for Sale,” a massive project exposing a global network of offshore tax havens. And the Center won its first Pulitzer Prize for “Breathless and Burdened: Dying from Black Lung, Buried by Law and Medicine,” a landmark investigation detailing the controversial denials of black lung benefits to coal miners.
In addition to the Pulitzer, in recent months the Center has won the Goldsmith Prize for Investigative Reporting, the Edgar A. Poe Award from the White House Correspondents’ Association, a George Polk Award, an Overseas Press Club award, an Investigative Reporters and Editors award, a Scripps Howard award and the Paul Tobenkin Memorial Award from Columbia Journalism School.
“Bill has taken the Center to its greatest heights yet,” said Charles Lewis, Center founder, and now executive editor of the Investigative Reporting Workshop at American University. “I deeply appreciate his important leadership these past years. Bravo and thank you!”
Buzenberg leaves the Center in solid financial shape. Working with the Center’s development department and board of directors, he has helped raise more than $50 million over the past eight years.
“As I move on to a new stage in my journalism career, I can truly say the Center has never been in a stronger position,” Buzenberg said.
Buzenberg was named executive director in January 2007.
Previously, he was vice president of news for National Public Radio, as well as London bureau chief from 1978-1997. He was responsible for doubling the size of the NPR news audience during his tenure. He launched “Talk of the Nation,” expanded “All Things Considered” and extended NPR's newscast services to 24 hours a day.
He was also senior vice president of news at American Public Media/Minnesota Public Radio from 1998-2006 where he won his second DuPont-Columbia gold baton. A former Peace Corps volunteer in South America, Buzenberg has been recognized for his work numerous times, including winning the prestigious Edward R. Murrow Award, public radio's highest honor. He was co-editor of the memoirs of the late CBS News President Richard Salant (Salant, CBS, and the Battle for the Soul of Broadcast Journalism).
A graduate of Kansas State University, Buzenberg has also been awarded fellowships for graduate studies at the University of Michigan, the Johns Hopkins University School of Advanced International Studies in Bologna, and the Institute of Politics at Harvard University's Kennedy School of Government.
“My passion while working in newspapers, on public radio and at the Center has always been to report and disseminate tough, accurate, independent reporting on significant issues. I am certain the Center will continue in that essential tradition in the years ahead,” Buzenberg said.
It has been my great honor and privilege to serve as executive director of The Center for Public Integrity for the past eight years. I informed the Board of Directors in February that I will step down at the end of this year as executive director and begin the next chapter in my career.
As I move on in 2015, I can truly say the Center has never been in a stronger position in its 25-year history. Just in the past year, we have won our first Pulitzer Prize, launched some of our most ambitious investigative projects, distributed our work to the largest audience in the Center’s history via the Web and our media partners and established a solid financial position.
My tenure here has been the most rewarding, demanding and invigorating chapter of my 40 years in journalism, including the seven years I was head of NPR News, and the 11 years I spent as an NPR correspondent. I am extremely proud of The Center for Public Integrity’s accomplishments. I wish to express my sincere gratitude to our great reporters, editors and the entire staff, who have helped make the Center one of the best investigative news organizations in the nation and the world.
I am also grateful to all of our many foundation funders and the thousands of individuals who have supported our work. It is vital that this level of financial support continues. Working with a superb development department and an engaged Board of Directors, I have been able to raise more than $50 million during these past eight years.
The Center’s Board of Directors has formed a search committee to begin the process of seeking a new executive director starting in 2015. It is my goal is to make sure the Center continues to thrive throughout the transition period and continues to build on its solid record of success.
The high quality investigative work of the Center can never be taken for granted. We truly act in the service of democracy by revealing abuses of power, corruption, and betrayal of public trust by powerful public and private institutions. Transparency and accountability have been our mantras.
My passion while working in newspapers, on public radio and at the Center, has always been to report and disseminate tough, accurate, independent reporting on significant issues of interest to all. I am certain the Center will continue in that essential tradition in the years ahead. Meanwhile, we have much more work to do this year.
Thank you all.
Until next week,
The Tennessee State Supreme Court late last week denied a request to review the conviction of an accused truant jailed twice at 13, allegedly without first being informed of his right to appointment of legal counsel. The young man, identified as T.W., who has diagnosed mental-health needs, failed to graduate from high school in spite of a punishment regime designed to change his pattern of absences.
Details of the court case were featured in a Center for Public Integrity report this month on allegations that some of the hundreds of accused truants summoned to Knox County Juvenile Court in Tennessee in recent years were incarcerated in juvenile detention, drug tested or faced other lasting consequences without the benefit of appointed defense counsel.
The Tennessee State Supreme Court did not provide any commentary or rationale accompanying its decision.
“Our clients have exhausted their legal remedies through the Tennessee courts. We are planning to pursue other avenues of redress,” said Dean Rivkin, a University of Tennessee law professor who filed the appeal, originally on behalf of T.W. and three other truants. The appeal has been winding through lower courts since 2011.
Rivkin hopes that the redress he is seeking will stem from an investigation by the U.S. Department of Justice’s Civil Rights Division, as the Center report explained.
The allegations in Knox County highlight a broader national debate over how juveniles are being treated in courts, and if minors’ legal rights are being respected or need to be strengthened.
The Center reported that Robert Listenbee, who heads the federal Office of Juvenile Justice and Delinquency Prevention, has asked for a Department of Justice investigation into allegations that minors in Tennessee did not benefit from appointed defense counsel, as required.
Dena Iverson, a Department of Justice spokeswoman, confirmed that information forwarded by Listenbee’s office is under review.
Truancy in most states is a so-called “status offense,” like running away, smoking or violating curfews; these are non-criminal infractions that only minors can be accused of committing.
Status offenders have no constitutional right to the appointment of attorneys, if indigent, before they enter guilty pleas. They do have the right under federal law, however, to appointment of attorneys before they face possible jailing for failing to follow court orders handed down to control their behavior after they plead guilty.
Judge Tim Irwin of the Knox County Juvenile Court declined to discuss kids’ cases. But when he rejected Rivkin’s initial appeal to reverse T.W. and other students’ convictions, Irwin said that T.W. and the three other original plaintiffs were informed of their rights and chose to plead guilty without legal counsel.
In Knox County, some families allege their kids were not informed of their right to appointed counsel as required at certain points in proceedings. One young woman told the Center that when she was 15 she was taken from court, screaming, and shackled and put into detention immediately after she pled guilty to truancy without a lawyer.
She and another youth interviewed by the Center said they didn’t know until years later they had been given delinquency records by the court. Such records are comparable to a youth having committed a crime, and that can taint job and other types of applications if a court does not agree to expunge them.
Rivkin and other lawyers in Knox County question how many truants also have delinquency records and don’t know it.
Last December, a Tennessee State Court of Appeals found that the plaintiffs had not filed appeals of their original convictions within a 10-day deadline.
The families did not have attorneys to help them file appeals, some of the kids’ parents said. But the appeals court panel found that Rivkin’s argument that new information that he had discovered about the children—information that did not come out initially in truancy court—did not fit the burden of proof needed to grant an appeal.
A Charleston, South Carolina man who thought he had pretty good health insurance may miss work today, as he has several times already this year, because of a hernia. He’s in constant pain and needs surgery, but he has been postponing it. It’s not because he’s afraid of hospitals or going under the knife. It’s because he can’t afford the deductible.
I heard this story last week from a relative of his, Elizabeth May, who because she lives a few miles north of the U.S.-Canadian border has never faced such a dilemma. May was astonished to learn that many Americans, her cousin included, regularly postpone needed care because their insurance plans require paying several thousand dollars out of their own pockets before their coverage kicks in.
Of course, Elizabeth May is not just some ordinary Canadian. She is a Member of Parliament representing Vancouver Island in British Columbia and leader of the Green Party. I met with her and several other so-called MPs last Wednesday in Ottawa at the request of the Canadian Health Coalition, a group that wants to maintain and expand the country’s publicly funded, universal access health care system.
May was not the only MP to share stories about Americans they’ve met who have fallen through the cracks of a system that fails to provide affordable health care to its citizens. Dr. Hedy Fry of Vancouver related the stories of three people who told California lawmakers at a hearing several years back that they had become “uninsurable” in the eyes of insurance companies after a major illness. Dr. Fry, the Liberal Party’s lead expert on health care, also testified at that hearing. She had been invited to explain the Canadian single-payer system, which California lawmakers were considering. Her voice cracked as she recalled the dire straits those people found themselves in.
Dr. Fry’s testimony clearly resonated. Legislators in Sacramento sent then-Gov. Arnold Schwarzenegger two bills that would establish a single payer system in the California — in 2006 and 2008 — but Schwarzenegger vetoed both, calling them “socialized medicine.”
I also met with MPs from the other two major Canadian parties, including Terence Young of the Conservative Party and Libby Davies, the New Democratic Party’s lead health care expert. And I had a chance to talk with the New Democratic Party’s leader, Tom Mulcair.
Although Canadian lawmakers are debating how to ensure the continued financial viability of their system, which they call Medicare, no one in Ottawa of any ideological stripe would dare suggest doing much tinkering. Canadians talk with pride about their health care system, about how it is part of the country’s DNA.
I told the lawmakers and others how my colleagues and I in the health insurance industry worked over several decades to scare Americans about the Canadian system by perpetuating myths about long waits for medically necessary care. What scares Canadians, by contrast, is that lawmakers might unwittingly enact reforms that would lead the country down a “slippery slope toward American-style health care.”
The people I talked with were especially alarmed to learn that millions of Americans who have health insurance file for bankruptcy every year primarily because of medical debt. Most of those folks are in health plans with high deductibles who learn after being treated for a major illness or injury that they are on the hook for thousands of dollars.
Meanwhile, back in the states, Karen Ignagni, the CEO of America’s Health Insurance Plans, claimed during a recent C-SPAN interview that people longed for the days when insurance companies could sell policies that make people pay more of their own money for care than the Affordable Car Act allows.
The ACA permits insurers to sell policies in four tiers — platinum, gold, silver and bronze — that have varying levels of cost sharing. Enrollees in platinum plans generally pay up to 10 percent of health care costs before their coverage starts. Bronze plan enrollees pay up to 40 percent. Premiums for platinum plans are among the highest while premiums for bronze plans are among the lowest.
Ignagni said Congress should consider allowing people to buy policies that require them to pay even more than 40 percent of their total medical costs.
“That’s what people preferred to buy because they wanted to keep their premiums low,” she said.
There is no doubt that many people would like to pay lower premiums, but allowing insurers to sell coverage that almost guarantee that policyholders are underinsured the moment they buy them is not the direction we should be heading. Elizabeth May’s cousin, who has not had the surgery his doctor says he needs because he doesn’t have the money to cover his high deductible, would be among the first to tell us that.
Update, 10:12 p.m., May 20, 2014:Singularity University released a statement to the Center for Public Integrity this evening indicating that Randi Willis, the school's managing director for program operations, has filed termination paperwork with the Federal Election Commission to shut down four super PACs she registered and indicated were tied to the university.
The school's statement says the super PACs were "filed personally by Randi Willis as a private individual" and "neither her filings, nor her subsequent actions in speaking with the press, can rightly be categorized as being on behalf of Singularity University. Although Ms. Willis chose to use language commonly associated with Singularity University in the names of the committees, none of the four PACs was filed on behalf of, or with any affiliation to, Singularity University."
Singularity University's statement continues: "Singularity University does not sanction the use by employees — in their personal endeavors outside of work — of branding terms that are substantially similar to, or the same as, branding used and/or trademarked by Singularity University in its business. Ms. Willis’ use, in this case, of such terms in the committee names was inappropriate."
Singularity University states that it "first became aware of the filings on Thursday, May 15, 2014, when Ms. Willis informed Singularity University’s Management Team of an article published by the Center for Public Integrity about her filings."
Willis, who serves as the four super PACs' treasurer, filed termination papers for the super PACs on May 16, according to the university. No such termination filings appeared in the FEC's document database as of late Tuesday, although it often takes several days for the agency to receive, process and certify such filings.
The university, which is funded in part by prominent corporations such as Google and Cisco, would not confirm whether Willis has been disciplined or fired.
"Singularity University does not comment publicly on human resource matters," Susan Moran, the school's managing director for marketing, wrote in an email. Willis' staff page remained live on the school website as of late Tuesday.
Moran added that "to our knowledge, no other Singularity University employee was aware of the committees' creation or otherwise involved in any planning going forward with respect to the committees" — a statement that contradicts what Willis told the Center for Public Integrity last week.
The Center for Public Integrity's original story from today appears in its entirety as follows:
Singularity University is disavowing involvement with four federal super PACs the school's managing director for program operations recently formed in its name.
But the tech-focused California school is remaining mum on the official's assertion that other school leaders are involved with the super PAC and that the committees would seek funding from the "millionaires and billionaires" that affiliate themselves with the school.
In a phone interview Monday, Singularity University Chief of Staff and General Counsel Joey Neugart declined to answer questions about the super PACs after contacting the Center for Public Integrity with a one-line statement he requested be addended to a story published last week. The statement reads:
"Singularity University (SU) is a benefit corporation with a social impact mission. SU is not affiliated with, has not established, and has no intention of establishing any candidate committee, party committee, or political action committee."
The problem: The Center for Public Integrity did not report that the school created or is officially affiliated with the super PACs, which by law may raise and spend unlimited amounts of money to advocate for or against political candidates. Super PACs may also accept corporate, union and special interest cash.
Political committees backed by corporations are typically formed and operated by an employee or employees of the corporation, as appears to be the case with the super PACs tied to Singularity. The four new super PACs Singularity University's Randi Willis registered May 12 are named "Singularity PAC," "Impact," "Global Grand Challenges" and "10^9+" — the latter a reference to Singularity University's stated goal of helping its graduate program students develop "the tools, knowledge, skills and mindset for delivering real humanitarian impact to 1 billion people."
Willis also serves as the super PACs' treasurer, affirming in signed statements to the FEC that the new committees intend "to make independent expenditures, and consistent with the U.S. Court of Appeals for the District of Columbia Circuit decision in SpeechNow v. FEC, it therefore intends to raise funds in unlimited amounts. This committee will not use those funds to make contributions, whether direct, in-kind, or via coordinated communications, to federal candidates or committee."
In an interview last week, Willis explained that Singularity University officials would spend the next several months determining the super PACs' focus and that they wouldn't likely become active until after the 2014 election cycle.
The California-based school was co-founded by futurist Ray Kurzweil and is funded in part by prominent corporations such as Google and Cisco.
"Instead of waiting for people in office to come to us, the idea is, 'Let's put people in office,'" said Willis, whose LinkedIn biography says she has been with the university since 2011. "We have a number of millionaires and billionaires who come through here and who we believe would consider contributing."
Willis did not return messages seeking additional comment. A Singularity University spokeswoman shed little additional light on the situation, telling the San Francisco Chronicle today that the school isn't interested in involving itself in politics, "and we never will. That’s not what this is about.”
What exactly this is all about is a mystery. Had Neugart gone beyond his written statement, the Center for Public Integrity might have learned answers to these questions, among others:
The four super PACs still exist as of today, according to federal records. But super PACs — particularly ones with no record of yet raising money — are easily shut down. Willis would just have to notify the FEC of her intention to close the committees, if she chooses to do so.
Even as topDemocratsdenounce Charles and David Koch’s political “dark money” organizations, party operatives have built a secretive nonprofit network of their own — albeit a much smaller one — to advance liberal policies and win votes.
America Votes, which seeks to build “a permanent advocacy and campaign infrastructure” to “promote progressive issues,” raised $12.7 million during its most recent fiscal year, according to new tax documents reviewed by the Center for Public Integrity.
The sources of America Votes’ funding are not clear.
“We do not disclose that information to the public,” said America Votes spokeswoman Liz Accola, adding that her group was “in full compliance” with the law.
The new tax records show that a dozen anonymous donors provided the lion’s share of the budget for America Votes during its most recent fiscal year, with each giving between $300,000 and $1.1 million. Together, these 12 donors accounted for 60 percent of the group’s funds.
Americans for Prosperity, one of the many conservative nonprofits supported by the billionaire Koch brothers, spent $122 million in 2012, as the Center for Public Integrity previously reported.
This year, America Votes aims to raise more than $8.5 million, according to documents obtained by the Washington Free Beacon. Between 40 percent and 50 percent of that sum is projected to come from wealthy donors connected to the Democracy Alliance, a secretive nonprofit whose funders include the likes of billionaire investor George Soros* and author, horticulturalist and philanthropist Amy Goldman.
As a 501(c)(4) “social welfare” nonprofit, America Votes is not required to publicly disclose its donors. Accola called this designation an “appropriate” tax status for America Votes, given its focus on issue advocacy.
She added that the group also maintains a sister super PAC, the America Votes Action Fund, which “conducts exclusively electoral activity” and “discloses its donors as required by law.”
On its website, America Votes does list about three dozen organizations— including the EMILY’s List, the Sierra Club and many labor unions — as “national partners,” although it doesn’t say how much money they’ve provided. Several state-specific partners are also named.
Tax filings with the Internal Revenue Service and documents submitted to the Department of Labor do provide some insight into the social welfare nonprofit’s funding.
The National Education Association, for instance, reported giving America Votes more than $1 million between October 2012 and September 2013, according to a filing with the Department of Labor.
Other labor unions supporting America Votes include the Service Employees International Union ($443,000), American Federation of State, County and Municipal Employees ($333,000) and the United Food and Commercial Workers ($28,000), documents covering each group's last fiscal year indicate.
Other social welfare nonprofits, such as Mayors Against Illegal Guns, the League of Conservation Voters and the Ballot Initiative Strategy Center, have also financially supported America Votes in the past, according research by the Center for Responsive Politics and a Center for Public Integrity review of tax filings maintained by CitizenAudit.org. So, too, have foundations such as the Advocacy Fund and the Tides Foundation.
During its most recent fiscal year, which began on July 1, 2012, and ended on June 30, 2013, America Votes doled out more than $5 million to other advocacy organizations and politically active groups, including $420,000 to Vote Vets Action Fund, $360,000 to Fair Share Alliance and $240,000 to Patriot Majority USA.
During the 2012 election, Vote Vets Action Fund, Fair Share Alliance and Patriot Majority USA — all social welfare nonprofits — produced advertisements that supported Democratic candidates or criticized Republicans, and this election cycle, Patriot Majority USA has emerged as a major player in the U.S. Senate races in Arkansas, North Carolina and Kentucky.
America Votes was created ahead of the 2004 election by a group of liberal political operatives, including EMILY’s List founder Ellen Malcolm, former Sierra Club Executive Director Carl Pope and Harold Ickes, a longtime adviser to Bill and Hillary Clinton.
The organization facilitates liberals coordinating and avoiding duplicative efforts when contacting voters.
"Every contact with a voter that's duplicated needlessly is a wasted dollar," said America Votes Executive Director Greg Speed in a promotional video posted to YouTube last year. (In November, Speed became the group's president.)
"When EMILY's List spends one dollar in New Hampshire, it means that AFSCME can spend their dollar somewhere else," added EMILY’s List President Stephanie Schriock in a related promotional video.
America Votes also helps spread financial resources around the country, giving to groups that Accola, the spokeswoman, said focused on “engaging voters on vital progressive issues.”
She continued: “It is crucial that we are here to maximize the impact of every dollar — especially in the face of unprecedented spending by the Koch brothers and conservative groups.”
America Votes itself spend about $47,000 on phone calls urging voters to support Obama and Sen. Bob Casey, D-Pa., ahead of the November 2012 election.
When the Federal Election Commission asked for additional information about the donors who helped bankroll these expenditures, America Votes issued a response saying that it “does not accept contributions earmarked for a specific political purpose” — the only contributions the FEC has ruled that 501(c)(4) nonprofits must disclose.
* George Soros is the chairman of the Open Society Foundations, which provides funding for the Center for Public Integrity. For a list of the Center's donors, visit this page on our website.
As Sen. Evan Bayh prepared to quit Congress, he called on all Americans to embrace a “spirit of devotion to the national welfare beyond party or self-interest” and declared his “passion for service to our fellow citizens is undiminished.”
Four years later, the Indiana Democrat controls nearly $10 million in surplus campaign cash he could, by law, invest in charities — something other former politicos have done.
Instead, his old campaign money generates thousands of dollars in interest each week while sitting in a Raymond James & Associates investment account.
Bayh, in this regard, is hardly alone.
Nine former congressional members and congressional candidates who are no longer seeking federal office each retain $1 million or more in leftover campaign cash, a Center for Public Integrity analysis of federal campaign finance disclosures and Center for Responsive Politics data indicates.
Dozens of other former members and congressional also-rans, both Democrats and Republicans, are squatting on six-figure surpluses.
The former congressional candidates have several options for their accumulated campaign cash, and no law requires them to divest of this money or even close down their committees.
But their collective hoard is now approaching $100 million at a time when numerous charitable organizations could surely use some of it.
For example, a fraction of that amount — $1 million — could feed 12,000 Syrian refugees for a month, by Oxfam America’s estimate.
“Fairly transformative” is how Janet Baker, vice president of development for Keep Indianapolis Beautiful, described what $1 million from Bayh or any other former politico could do for her $3.5 million-per-year charity that spruces up neighborhoods, plants trees and runs youth programs
“Donating surplus money of this nature to a credible, charitable organization only makes sense,” said Randi K. Law, a spokeswoman for Veterans of Foreign Wars. “Unused funds, sitting idle, do nothing to perpetuate the cycle of support that America relies on.”
Added Joyce Raezer, executive director of the National Military Family Association: “The congressmen, they could have a huge impact. Their money would be direct support that has immediate benefit.”
The former politicians offer a variety of reasons for idling their campaign riches instead of giving them away.
Bayh, who today works as an adviser at law and lobbying firm McGuireWoods and asset management firm Apollo Global Management, alluded to re-entering electoral politics, although he has no current plans to do so.
His campaign account expenditures during the year’s first three months primarily went toward political consulting fees, taxes, computer software and a “Christmas card mailing.” He made a $2,000 contribution to the re-election campaign of Sen. Mark Begich, D-Alaska.
“Because the future is difficult to predict, I don't want to foreclose any possibilities at this time," Bayh said by email.
Now a lobbyist and political consultant whose clients include the Washington Nationals baseball team, Foley says he has “no immediate plans” to run for Congress again but has learned to “never slam a door on the future.”
He’s made some charitable contributions in recent years from unused campaign funds — $10,000 last year to the Compass Gay & Lesbian Community Center in Florida, for one — and has more than $1.26 million remaining as of March 31.
“After the resignation, I would have given it slim odds that I’d ever run again,” he said. “But I’ve had people tell me since, ‘Your public service was sterling aside from a bump in the road.’ There’s no easy answer, although I’m going to be 60 this year, so any decision I make would be in a reasonable, short period of time.”
Former Rep. Bart Gordon, D-Tenn., who left office in 2011, has more than $626,000 remaining in his still-technically-active campaign account.
In a phone interview, Gordon, now a lobbyist at the K&L Gates firm, categorically ruled out running for elected office again. He joked that after 26 years, “my wife feels like it’s been enough.”
What will he do with his remaining campaign stash, then?
“I really don’t have any game plan for it,” he said.
Nor does former Sen. Ken Salazar, D-Colo., who also served as President Barack Obama’s Secretary of the Department of the Interior from 2009 to 2013. His Senate campaign account had nearly $1.3 million in it as of March 31.
“He just doesn’t have any plans at this time for it,” Salazar’s longtime aide, Ken Lane, said of the campaign money.
Former Rep. Joseph Kennedy II, a Massachusetts Democrat who hasn’t served in Congress in 15 years, has almost $2.6 million remaining in his “Citizens for Joe Kennedy 1988” campaign account, as of March 31.
In recent years, his leftover campaign money has grown in value thanks in part to dividends, interest and changes in market values in the Goldman Sachs investment accounts in which it lies. In mid-1999, the year he left office, his campaign account was worth about $1.86 million.
Kennedy did not return messages seeking comment, nor did his campaign committee’s treasurer.
Other notable ex-congressmen with large campaign surpluses as of March 31 include Sens. Max Baucus, D-Mont. ($1.97 million) and Reps. Jerry Costello, D-Ill. ($1.38 million) and Jim Turner, D-Texas ($972,843).
Ex-candidates cannot spend unused campaign money on themselves.
Federal Election Commission regulations prohibit “using campaign funds for personal use,” and they specifically name mortgages, rent, tuition, country club dues, household supplies and most clothing among a litany of no-nos. They’re also barred from giving the money to friends and relatives, unless they’re doing bona fide, market-value work for the campaign committee.
But in addition to donating excess campaign money to charity, former congressmen have several options for spending their campaign cash once they’ve run their final campaign. Among them:
They can also hang on to the cash for future political runs — or just leave it in the bank to collect interest.
Former Rep. Marty Meehan, D-Mass., is mixing several approaches.
So far this year, he’s made a handful of political and charitable contributions through his campaign account. Together, they totaled $18,500, with the bulk — $10,000 — helping fund an archive collection for former Rep. Barney Frank, D-Mass. The Urban League of Springfield in Massachusetts received $5,000.
But Meehan, now the chancellor of the University of Massachusetts Lowell, still reported nearly $4.6 million remaining in his campaign coffer, even though he’s been out of Congress for seven-plus years. That’s more money than any other former U.S. House member, and second behind Bayh among all ex-congressmen.
The longer he’s out of politics, the less likely it is he’ll ever run again, Meehan said, although he hasn’t completely ruled out seeking elected office.
“I do get hundreds of requests each year from charities, political organizations,” Meehan said. “Part of me wonders if I should put it into a charitable account.”
That’s what Frank did, at least in part. The longtime congressman, who retired from Congress in 2013, officially terminated his campaign committee in January and donated the last of its cash — $8,698 — to the University of Massachusetts Dartmouth. He had given away tens of thousands of dollars to other political committees and charities during the months after announcing he wouldn’t seek re-election.
Same scenario for former Rep. Norm Dicks, D-Wash., who made a series of small donations to several charities — and one big one worth $25,000 to the University of Washington athletics department — in 2011 and 2012 before retiring from Congress last year. He also divested campaign cash by transferring it to other political committees, including the Washington State Democratic Central Committee, which received $20,000 from Dicks’ campaign in late 2012.
Some former members donate extra campaign cash to their own nonprofit organizations. Such is the case with ex-Rep. Allen West, R-Fla., who last year directed hundreds of thousands of campaign dollars to the Allen West Foundation, which West says is dedicated to training and educating conservative candidates who are minorities or have military backgrounds.
For ex-congressional candidates considering donating to charities, Sandra Miniutti, vice president of nonprofit evaluation service Charity Navigator, has advice: Honor political donors’ intent by contributing to groups involved with issues they worked on while working in Congress.
There are ancillary benefits to donating extra campaign cash, too, Miniutti said.
“It’s great exposure for the politician,” she said. “And getting a contribution from a celebrity, be it a politician or someone from Hollywood, is something that it draws a lot of attention to the charity. It could be very life-giving for the nonprofit.”
A number of outgoing congressional representatives will soon weigh whether to give away their campaign cash or keep it for future political prospects.
It’s a group that includes Reps. Mike Rogers, R-Mich. ($1.85 million); Michele Bachmann, R-Minn. ($1.56 million); Ed Pastor, D-Ariz. ($1.31 million); Tom Petri, R-Wis. ($992,596) and Gary Miller, D-Calif. ($860,307).
No word yet on what he’s doing with his campaign fund.
The first time I blew the whistle on health insurance companies was during a Senate Commerce Committee hearing in June 2009. Last Wednesday, almost five years later, I appeared before that committee again to give a progress report on how Americans have been benefiting since Congress enacted reforms in 2010 that changed the way insurance companies operate.
Among the practices I brought to the panel’s attention back in 2009 were those insurers engaged in to meet the profit expectations of shareholders and Wall Street financial analysts.
I explained that one of the ways insurers kept Wall Street happy was to spend as small a percentage of our premium dollars as possible on actual medical care.
I told them that analysts and investors pay close attention to an obscure mathematical equation called the medical loss ratio (MLR for short), which measures the percentage of premium revenue insurers pay out in claims.
“I saw an insurer’s stock price fall 20 percent in a single day after executives disclosed that the company had to spend a slightly higher percentage of premiums on medical claims during the previous three months than it did during the same period a year earlier,” I testified back then. “The smoking gun was the company’s first-quarter medical loss ratio, which had increased to 79.4 percent from 77.9 percent a year earlier.”
The chairman of the committee, Sen. Jay Rockefeller, (D-W.Va.), then decided to explore the issue further. After examining years of reports filed by insurance companies, the committee found that, as Rockefeller said Wednesday, “many of the policies health insurance companies were selling to families and businesses were just not a good value” because of their low medical loss ratios.
At Rockefeller’s insistence, the Affordable Care Act included a provision that requires insurance companies to spend at least 80 percent of our premiums on medical care and no more than 20 percent on overhead, including executive salaries and profits. That single provision — which went into effect in 2011 — has saved consumers billions of dollars in just two years.
As I explained to the committee last Wednesday, consumers benefit from the minimum MLR requirement in two significant ways. First, insurers are now operating more cost-efficiently to stay in compliance with the law. As a result, many policyholders are paying lower premiums than they would have been charged otherwise. Second, if an insurer fails to comply and spends less than 80 percent on medical care — or 85 percent in the large group market — it has to issue rebates to its policyholders.
Individuals and families who are can’t get coverage through an employer have seen the greatest benefit. According to the Kaiser Family Foundation, the average MLR in the individual market increased from 78 percent in 2010 to 83 percent in 2012. Researchers at the Foundation estimated that had it not been for the MLR requirements in the ACA, premiums in the individual market would have been $856 million higher in 2011 and $1.9 billion higher in 2012.
During my two decades in the insurance industry, my colleagues and I never tired of saying that steps needed to be taken to remove costs from the U.S. health care system. Although the industry spent considerable time and resources lobbying against the MLR requirements — and later to try to shape the regulations pertaining to the requirements — the 80/20 rule, as it is often called, has done what the industry said was needed. During the first two years that the rule has been in effect, according to a report published earlier this month by the Commonwealth Fund, at least $3 billion in costs were removed from our health care system, and American consumers were the beneficiary.
Approximately half of those savings were in the form of rebates: $1.1 billion in 2011 and $513 million in 2012. Insurers sent out fewer rebate checks in 2012 than in 2011 because most of them quickly implemented the changes necessary to stay in compliance with the law.
Among those changes: reduced overhead. The Commonwealth Fund’s researchers calculated that $1.75 billion in overhead was eliminated during the first two years alone. Most of those savings came in 2012 as health insurers continued to reduce their administrative and sales costs, such as brokers’ fees, without increasing their profit margins.
The MLR requirements ensure that consumers can now have greater confidence in knowing that most of what they pay in premiums will be used to pay for medical care or improve the quality of that care. The requirements have had a positive impact on the pocketbooks of millions of consumers, and will continue to help ensure that Americans can realize fuller value of their health insurance payments.
The U.S. Department of Labor announced Friday that it plans to issue a new rule to address recent disclosures that lawyers representing coal companies have withheld medical evidence from miners in black lung benefits cases.
The announcement comes after a recent investigation by the Center for Public Integrity detailed a prominent law firm’s decades-long record of keeping key evidence from sick miners, sometimes causing them to lose benefits cases.
The Labor Department offered little detail about the rule but said its purpose was to “ensure that coal miners have full access to information about their health and to enhance the accuracy of entitlement determinations.” The department said it aims to release a proposal by January 2015.
John Cline, one of the few lawyers who regularly represent miners in federal black lung benefits cases, called the department’s announcement “a big step and an important step.”
“In our experience, it’s an extensive problem,” he said of the withholding of evidence by lawyers representing coal companies. “This is something that has been going on a long time and affecting a lot of claims.”
Representatives for the coal industry’s primary trade organization and the law firm featured in the Center's story did not immediately respond to requests for comment.
The story was the first installment in a series, Breathless and Burdened, based on a yearlong investigation of the role of lawyers and doctors, working on behalf of the coal industry, in helping to defeat miners’ claims. It found that lawyers at the industry’s go-to law firm for black lung benefits cases, Jackson Kelly PLLC, for decades have withheld evidence indicating that miners whose cases they were contesting had the disease.
In court filings, the firm’s attorneys have argued that they have no obligation to disclose reports by doctors they consulted whose opinions didn’t support their case. Miners’ lawyers have argued that the firm’s approach amounts to misleading judges and the firm’s other consulting doctors.
Judges have called the firm’s actions “shocking” and “unconscionable” and its defenses “ludicrous” and “flimsy at best.”
Perhaps the signal case is that of Gary Fox, who spent more than 25 years working in the underground mines of central Appalachia. Fox filed for federal benefits in 1999. The previous year, doctors had removed a suspicious mass from his lungs. The purpose had been to rule out cancer, which they did, and a pathologist provided the vague diagnosis of “inflammatory pseudotumor.” There is no evidence this hospital pathologist knew Fox was a coal miner.
Unknown to Fox — who, like many miners, was unable to find an attorney to take his case — lawyers at Jackson Kelly obtained samples of his lung tissue taken during this procedure and sent them to two experts on whom it frequently relied in benefits cases. These doctors, however, wrote reports finding that the samples were consistent with advanced black lung.
The lawyers withheld the reports by the two doctors, who had extensive experience looking for signs of black lung, and instead relied on the hospital pathologist’s earlier report. Fox lost his claim and had little choice but to return to work.
His breathing continued to deteriorate, and he retired and filed a new claim in 2006. This time, attorney Cline agreed to represent him, and, based on his experience in previous cases, Cline suspected Jackson Kelly had other pathology reports it hadn’t revealed.
The firm fought disclosure for months, but a judge eventually forced the release of the reports. In a scathing opinion, the judge found that the lawyers at Jackson Kelly had committed “fraud on the court” — a rare finding reserved for the most severe cases of fraud that undermine the functioning of the legal system.
An appeals board, however, found that the lawyers’ conduct had not reached the extraordinarily high level of “fraud on the court,” and, earlier this year, the U.S. Court of Appeals for the Fourth Circuit agreed, while also noting that it was in no way signaling that it approved of the firm’s actions.
As the legal battle was raging, Fox died in 2009 while waiting on a lung transplant. An autopsy confirmed that he had the most severe form of black lung.
Now Fox’s widow and the families of two other miners whose cases also involved key evidence withheld by Jackson Kelly lawyers are suing the firm in a West Virginia court, alleging fraud.
The Center for Public Integrity has sued the U.S. Department of Health and Human Services, seeking a wide range of records concerning oversight of Medicare Advantage health insurance plans for senior citizens.
The suit, filed today in U.S. District Court in Washington under the Freedom of Information Act, argues that officials have yet to release any documents sought by the Center for more than a year. Federal law generally requires a response within 20 working days.
“The information about Medicare Advantage that we are asking for should be readily available to the taxpaying public. There’s no excuse for ignoring our request,” said Bill Buzenberg, the Center’s Executive Director.
Medicare Advantage, a privately-run alternative to standard Medicare, has enrolled nearly 16 million elderly and disabled persons at an annual cost expected to top $150 billion. The plans have been popular with seniors because they often provide extra benefits, such as eyeglasses and dental care, and can cost patients less than standard Medicare.
But the industry also has been a frequent target of government auditors and other critics who argue that federal officials overpay the plans by billions of dollars every year.
As part of a Center investigation into the billing issue, senior reporter Fred Schulte requested records from the Centers of Medicare and Medicaid Services (CMS), an arm of HHS, in a May 21, 2013, letter. The letter asked for copies of program audits, billing data and the identities of any health plans suspected of overcharging the government. The Center did not request the names of patients. The results of the investigation will be published next month.
On June 7, 2013, Michael Marquis, who directs the CMS Freedom of Information division, acknowledged receiving the request. But since then, the agency has produced no materials. “Plaintiffs have a statutory right to the requested records, and there is no legal basis for Defendant’s failure to make them available,” the lawsuit states.
It is the second time the Center for Public Integrity has sued the Medicare agency to compel disclosure of billing data and other records. In a 2009 case, the Center, in partnership with TheWall Street Journal, sued to obtain Medicare billing records for thousands of doctors and hospitals. The records were used in a number of articles, including the 2012 series Cracking the Codes, which disclosed how thousands of doctors had steadily billed higher fees for office visits and other routine medical services, adding at least $11 billion dollars to Medicare costs. CMS has since made public physician billing records prompting media outlets to report similar stories.
National Republicans have launched another jumbo joint fundraising committee in the wake of the U.S. Supreme Court’s McCutcheon v. Federal Election Commission ruling— this one with the goal of aiding some of the party’s most promising challengers and open seat contenders.
The new collective fundraising operation will benefit the National Republican Congressional Committee, as well as 10 GOP House candidates that have been named to the top tier of the party’s “Young Gun” program, which aids politicians fighting to win some of the most competitive races this year.
The jumbo joint fundraising committee will be known as “Young Gun Day I 2014,” according to paperwork filed with the Federal Election Commission. Individuals will be able to contribute up to $84,400 this year to this new GOP group.
Such a committee wouldn't have been legal prior to last month's McCutcheon decision, as aggregate limits on campaign contributions prevented donors from giving the legal maximum to more than nine federal candidates.
Now, there is no limit on how many candidates a donor can give to — so long as no beneficiary receives more than the $2,600 per election“base” limit. Primary and general elections count as separate elections.
In addition to the NRCC, the beneficiaries of the Young Gun Day I 2014 jumbo joint fundraising committee are:
This list could potentially grow: Dozens of other GOP candidates are currently named on lower tiers of the NRCC’s “Young Gun” program,
but have not yet been named to its top tier.
Republicans have already established three other joint fundraising committees to take advantage of the post-McCutcheon campaign finance rules: the Republican Victory Fund, which will boost the Republican National Committee, National Republican Senatorial Committee and NRCC; the 2014 Senators Classic Committee, which will benefit 19 incumbent senators and Senate candidates; and the “Patriot Day III 2014” committee, which will aid 10 incumbent GOP House members.
Democrats also regularly solicit large campaign contributions through joint fundraising vehicles, which have existed for years.
But no Democratic-aligned groups have yet been created to utilize the fundraising rules loosened by the McCutcheon decision.
The federal judge who ordered an end to an investigation into possible illegal campaign coordination between Wisconsin Gov. Scott Walker and conservative groups during two recent recall elections regularly attended expenses-paid judicial conferences sponsored by conservative organizations including the Charles G. Koch Charitable Foundation and the Lynde and Harry Bradley Foundation — groups that have funded efforts against campaign finance reform.
In a 26-page decision issued on May 6, Judge Rudolph Randa of the U.S. District Court for the Eastern District of Wisconsin ordered prosecutors to immediately halt its long-running investigation into the campaign spending and fundraising activities of Walker, the Wisconsin Club for Growth and other conservative groups. Prosecutors were trying to determine whether the Walker campaign and the conservative groups were illegally coordinating campaign strategies at the time of the 2011 and 2012 recall elections in Wisconsin.
The Wisconsin Club for Growth spent millions on ads during Wisconsin’s recall elections, supporting the governor’s collective-bargaining reforms. It requested that the federal court stop the investigation, claiming that the probe violated the group’s constitutional right to free speech.
Randa wrote in his decision that the Wisconsin Club for Growth had found a way to get around campaign finance laws. “That circumvention should not and cannot be condemned or restricted,” the decision said. “Instead, it should be recognized as promoting political speech.”
As the Wisconsin-based Center for Media and Democracy first reported, Randa has regularly attended expenses-paid judicial conferences hosted by George Mason University’s Law & Economics Center and funded by right-wing foundations like the Charles G. Koch Charitable Foundation and large corporations like ExxonMobil, Dow Chemical and Pfizer.
A Center for Public Integrity investigation last year revealed that conservative foundations and corporate giants were the most frequent sponsors of George Mason judicial conferences, which often serve state and federal judges a steady dose of free-market, anti-regulation lectures.
Most recently, court records show, Randa reported attending an October 2013 judicial conference hosted by the university’s Law & Economics Center. The three-day conference, titled “Antitrust Law & Economics Institute for Judges,” was sponsored by the Charles G. Koch Charitable Foundation, the Lynde and Harry Bradley Foundation and the John William Pope Foundation, among other conservative groups, corporations and individuals.
The Wisconsin Club for Growth’s director, Eric O’Keefe, has connections to the Koch brothers. Michael Grebe, the Bradley Foundation’s president and CEO, chaired Gov. Walker’s 2010 and 2012 gubernatorial campaigns.
A woman who answered the phone in Randa’s chambers Tuesday said he would not comment on cases that are still pending.
In siding with the Wisconsin Club for Growth, Randa told prosecutors to return all of the property seized during their investigation and to destroy copies of documents they obtained during their searches.
A day after his ruling, however, the 7th U.S. Circuit Court of Appeals stayed Randa’s order ending the investigation, ruling that the judge overstepped his authority when he ordered that prosecutors destroy documents.
As Comcast Corp. tries to convince the federal government to permit it to buy Time Warner Cable Inc. for $45 billion, opponents of the deal will inevitably bring up people like Ed.
Every morning at 8:15, Ed climbs into his red, 1999 Mazda sedan and drives 15 miles down Main Street in Scranton, Pa. He passes mom-and-pop sandwich shops, a shuttered elementary school and a computerized shooting gallery for archery on his way to a friend’s 86-year-old house where coal miners once lived — and where there’s an Internet connection.
Ed, who comes here because he can’t afford the parking fees at a library six miles away, first reads his email and then turns his attention to job sites such as snapjobsearch, glassdoor, Monster and Craigslist. He’s been following this routine for nearly four years, looking for an opening in the hotel or restaurant business where he’s got some experience, but he has yet to land a job. Without the Internet connection, he’d have no hope.
“You can’t walk into a Wal-Mart without filling out an application online first,” said Ed, who doesn’t want to use his last name because he fears employers may avoid hiring him. “The Internet today is like electricity. If you don’t have it, you’re screwed.”
Ed wouldn’t have to rely on the goodwill of friends and make the daily 30-mile round trip if Comcast, the only fast, wired broadband provider in the Scranton area, offered its low-priced Internet service to people like him. But the $9.95-a-month program, called Internet Essentials, is available only to low-income families with school-age children.
Not for everyone
Ed, 53-years-old and single, isn’t eligible, even though he’s living on $169 a month in food stamps and the generosity of family and friends.
Comcast offered Internet Essentials shortly before its last big acquisition, when it bought NBC Universal in 2011. To ease federal approvals of the transaction, the company promised that it would offer low-priced Internet connections and computers to low-income families. But the Federal Communications Commission, which approved the merger, didn’t set any participation requirements, or metrics to define success.
Now the cable and broadband giant, wants to buy Time Warner Cable, and again in an attempt to show regulators the deal is in the public interest, is offering to extend the program indefinitely and offer it to all Time Warner's customers too. The deal, if approved, will give Comcast control of about 40 percent of U.S. Internet users.
The program makes for good public relations, but its real impact on the persistent problem of low-broadband adoption rates among the poor is negligible and is a weak substitute for a national strategy, advocates say.
Of the 7.2 million low-income families in Comcast’s service area, only 2.6 million are eligible for Internet Essentials, according to data compiled by the Center for Public Integrity. The program requires the participant’s household to include a child who is eligible for the federal school lunch program. Of that 2.6 million, only 300,000, or 12 percent, have signed up since Internet Essentials was launched in 2011.
The low participation rate suggests that relying on merger conditions to make private companies provide what has become an essential tool to participate in society may not be the best approach to bridge the digital divide.
“If Comcast offered me Internet for $10 a month, I could afford that. I’d have to,” Ed said. “Having Internet in your home is an absolute necessity.”
President Barack Obama agrees. In his 2011 State of the Union Address, Obama pledged to ensure high-speed wireless would be available to 98 percent of Americans. “It’s about connecting every part of America to the digital age,” he said.
But the government doesn’t own the broadband infrastructure, and the task of closing the digital divide has been outsourced to companies such as Comcast while the work of signing people up is left to underfunded and overwhelmed community groups such as PTAs, church groups and school systems in poor areas. And the program excludes a huge part of those on the wrong side of the digital divide — people like Ed.
Comcast will use the goodwill of Internet Essentials in tandem with its lobbying prowess to make the case that it should be allowed to buy Time Warner. The nation’s largest cable company spent $18.8 million lobbying Congress and federal agencies last year, the seventh-most of any corporation, according to the Center for Responsive Politics.
The company’s political action committee has raised $2.6 million so far this election cycle. It raised $3.8 million in the 2012 election cycle, the center reported.
David Cohen is Comcast’s executive vice president. He was the force behind the creation of Internet Essentials and is in charge of steering the Time Warner Cable deal through regulatory approvals and political opposition. He calls the 12 percent participation rate “very strong.”
Not all agree.
“As well intentioned and effective as Internet Essentials seems to be, I’d predict sometime in the future local, state and federal governments will realize that government intervention is needed,” said Blair Levin, who oversaw the FCC’s National Broadband Plan 2010, which laid out a road map for providing universal Internet access and reducing the digital divide.
Closing the digital divide — the gap between those who have Internet access and those who don’t — has been a priority at the FCC for years. The Internet has become a necessity for individuals to fully participate and function in society, as banking, shopping, education, health care, government services, job searches and socializing have all moved online.
In 2010, the FCC released its National Broadband Plan in hopes of getting more Americans online. It cited a government report showing adoption rates were 35 percent for people earning between $15,000 and $25,000 per year versus 79 percent for those earning between $75,000 and $100,000 per year.
The young were more connected than the elderly (81 percent for 18 to 24 year olds compared with 46 percent for 55 year olds and older). And more whites had Internet service (66 percent) than African Americans (46 percent) and Hispanics (40 percent).
“Absent action, broadband adoption rates will continue to be uneven,” the plan warned.
And progress has been discouraging, according to another report.
In 2013, 52 percent of adults earning less than $30,000 a year had an in-home connection compared with 91 percent of those making $75,000 or more, according to the latest survey by the Pew Internet and American Life Project
The gap between haves and have-nots was only 4 percentage points less than it was in 2009, according to Pew, despite the federal government spending $7.2 billion in 2009 economic stimulus money to build out broadband infrastructure, to pay community groups to teach computer skills to low-income families, and to encourage companies to offer discounted Internet access and computers.
Since 2011, the FCC has spent $438 million in its Connect America Fund to better support broadband. The agency created the fund when it reformed its $8.3 billion Universal Service Fund, a program that provides telephone service in areas that are costly to reach. Included in the reforms was changing the $1.8 billion Lifeline program to cover paying for Internet connections.
Other efforts included directing $300 million to expanding advanced mobile wireless service in rural America and $50 million to improving broadband on tribal lands. The commission also has spent $2.2 billion on connecting schools and libraries with high-speed Internet service.
Asked if the FCC has specific metrics for reducing the digital divide and if its strategy is working, a spokesperson replied in an email, “The FCC is charged with ensuring broadband is being deployed to all Americans in a reasonable and timely fashion.”
States also have created their own programs. Connected Nation, a nonprofit group which includes 13 states, relies on the good intentions of Internet-service companies to convince them to offer lower prices to poorer Americans.
Internet Essentials serves as the iconic program for many of these efforts, but it’s not working, said Susan Crawford, a communications law professor at Benjamin N. Cardozo School of Law.
“So far, the take-up of the program has been surprisingly low, indicating they are not appreciably closing the gap,” she said.
The poor as bargaining chip
No other low-cost broadband program has received as much attention as Internet Essentials, which Comcast’s Cohen boasts is the largest effort to connect low-income families in the nation. Its high profile is the direct result of Cohen linking it to federal approval of two huge corporate purchases.
In 2010, Comcast said it would offer Internet Essentials for three years to help convince the FCC to approve the company’s $30 billion purchase of a controlling interest in NBCUniversal.
Cohen told the Washington Post in a 2012 article that he had conceived of Internet Essentials long before the Comcast-NBC Universal deal but that he “held back” launching the program until it came in handy.
The NBCUniversal purchase presented an opportune time because the program would be “the type of voluntary commitment that would be attractive to the chairman” of the FCC, which would be examining the deal for how it promoted the public interest, according to the article.
Internet policymakers, advocacy groups and even former FCC officials were surprised by Cohen’s remarks.
“Magicians don’t usually reveal their tricks,” one former FCC official said.
The FCC approved the deal in January 2011 and praised Internet Essentials as a socially responsible move by Comcast to close the digital divide.
“I want to take this opportunity to applaud Comcast for their work,” said Julius Genachowski, then FCC chairman, at an event where Comcast unveiled Internet Essentials in September 2011.
Internet Essentials is now back on the negotiating table. In March, less than a month after unveiling its deal for Time Warner Cable, Cohen again made the program part of the bargain, announcing to reporters in a conference call that Comcast would extend it “indefinitely” and offer it to eligible households in Time Warner Cable’s service areas.
Cohen said he has yet to determine how many Time Warner Cable customers would be eligible if the buyout is approved.
A total of 4.6 million households in the company’s service area earn less than the amount that would qualify them for the federal government’s free and reduced-price lunch program. But that number also includes childless couples, individuals living alone and seniors, who would not qualify for Internet Essentials, according to research by the Center for Public Integrity.
If the demographics in Time Warner’s service area are similar to those in Comcast’s current footprint, then about 1.7 million would-be customers would qualify for Internet Essentials after the merger, leaving 2.9 million low-income individuals and childless couples without a chance to sign up for the discounted service.
Using a low-priced Internet package to push through a merger or meet other corporate goals is not a good way to serve the public interest, said Seeta Peña Gangadharan, a senior research fellow at the New America Foundation’s Open Technology Institute.
“When we have corporate programs such as Internet Essentials, there is a fear that the values that drive the program are tied more to a profit motive and expanding markets, rather than public stewardship and social responsibility,” Gangadharan said. “This was not first developed for digital inclusion; the program was attached to the merger conditions.”
Despite his comments in the Post, Cohen insists Internet Essentials was not created for the purpose of getting mergers approved. He dismisses such views as “conspiracy theories” and said his 2012 comment to the newspaper was “taken completely out of context.”
The idea for Internet Essentials was developed years before during his work on a committee advising the FCC on its National Broadband Plan and wasn’t ready to be launched, Cohen said.
“The timing to pursue the program had nothing to do with it,” Cohen said, his voice rising. “That’s got to be the most absurd thing we have ever heard.”
The fine print
In addition to having a child eligible for the national school lunch program, applicants must not owe Comcast any unpaid bills, possess any unreturned equipment, or be current customers.
The current customer restriction is what keeps Audra Traynham out of the program. Traynham lives in West Philadelphia, where 42 percent of the residents are under the poverty level. Residents of the area have a clear view of Comcast’s 58-story headquarters in the city center. It’s where Traynham, 47, is raising her 5-year-old granddaughter, C’Niyah Lee, on a $17-an-hour job as a janitor.
Traynham sits on a couch in her narrow living room. A small desk near a TV is piled high with her granddaughter’s school work and other papers. Traynham said she spends $164 a month on a bundled contract with Comcast, which includes cable and $20 for Internet service.
Traynham said she struggles to pay the bill every month, but she needs it to provide C’Niyah with access to educational programs, entertainment and a connection to school to communicate with teachers, check assignments and follow C’Niyah’s progress. Traynham also pays most of her bills online and uses email and Facebook to keep in touch with family.
“Our Internet is very important to us,” Traynham said. “I really don’t know what I would do without having the Internet.”
Traynham learned about Internet Essentials when C’Niyah brought a letter home from Universal Daroff Charter School, where C’Niyah attends kindergarten. She said the program would cut her Internet bill in half, a savings that would make it easier to pay each month and cover other expenses and “do some things that we can’t really do now,” she said.
Traynham called Comcast to enroll, but she was told she would have to disconnect her service for two months before signing up.
“I said, ‘Miss, what am I going to do for two months without Internet?’” Traynham said. “She told me those are the policies, and I said, ‘Miss, I just cannot live without my Internet for two months.’ So I didn’t get it.”
Comcast officials said the company limits Internet Essentials to non-Comcast subscribers because the program is aimed at decreasing the digital divide, not lowering current customers’ bills.
Unpaid bills were the issue in Chattanooga, Tenn., said Dwight Hunter, president of the PTA in Hamilton County, which includes the city.
When Internet Essentials was launched in 2011, Hunter said the Hamilton County PTA “made a big push” to promote it in newsletters and social media. But despite more than 24 percent of Chattanooga residents living below the poverty line, the program “never really took off" and it eventually died, Hunter said.
“A big problem that tripped up a lot of people was they had a previous balance owed. That prevented a lot of people from doing the program. I’m not sure if anybody signed up,” he said.
Houston school districts had similar problems. In the city’s Alief school district, where 82 percent of the nearly 46,000 students qualify for the school lunch program — one of the highest rates in all of Houston — Internet Essentials is almost non-existent. When contacted for this article, Craig Eichhorn, communications specialist for the district, said he never heard of the program.
After checking into the status of Internet Essentials, Eichhorn said in an email, “The district is not actively working with the Internet Essentials program. There were some flyers passed out a few years back but nothing recently and no active promotions.”
Even in Chicago, which Comcast held up in March as one of 15 cities where Internet Essentials has been the most successful, the superintendent of District 201, which is south of the city and includes schools where 75 percent of the students come from economically disadvantaged families, said the program’s progress was disappointing.
“I am dismayed to find that only one out of every four qualified families in our area has taken advantage of this program,” Superintendent Michael Kuzniewski wrote in his blog.
Using mergers to narrow the digital divide has been part of the FCC’s approach to increase broadband adoption. The agency required CenturyLink Inc. and Qwest Communications International Inc. in their 2011 merger approval to offer a program similar to Internet Essentials for five years.
But so far the agreements haven’t worked.
“Requiring Internet Essentials and programs like it as a condition for merger is silly,” said Levin, the architect of the National Broadband Plan and a fellow at the Aspen Institute’s Communications and Society Program.
Levin said “the mistake” he and the FCC made in developing a policy to connect more low-income individuals to the Internet was to focus on ensuring a broadband infrastructure was widely available, rather than on creating the conditions that would encourage the adoption of it by those who don’t have service.
Most of the government spending on broadband has been targeted at wiring schools and libraries with high-speed Internet service. Under a program Obama announced last year, the FCC will increase its spending on educational broadband by $1 billion, nearly doubling to $2.2 billion.
And the FCC program transitioning subsidized telephone service to the poor to Internet broadband is just moving too slowly, Levin said.
The efforts are worthwhile, but poorer Americans need Internet connections in their homes to fully take advantage of what’s online. Schools and libraries close, forcing students to hang out at a McDonalds to connect to WiFi so they can complete their homework. And if you’re not a student, a high-speed Internet connection in a school doesn’t help.
While schools and libraries help, not having a home connection “will mean a person will have difficulty participating in a productive way with the economy and civic society,” Levin said in an email.
Cities such as Chattanooga, Wilson, N.C., and Glenwood Springs, Colo., have built their own networks to bring high-speed Internet service to their residents. But the giant telecommunications companies, including Comcast and AT&T Inc., have since persuaded 20 states to pass laws restricting or outright banning municipalities from building public networks, even as they don’t provide programs for low-cost connections to all of a cities’ poor residents.
Levin suggested the FCC could allow broadband providers to bid on providing Internet service to low-income neighborhoods, with the business going to the lowest bidder. He also recommends the government pay a portion of qualifying users’ Internet bills if they prove they go online to search for jobs, view educational programs, apply for government services or other socially beneficial activities.
Expanding computer and Internet training programs by community groups would also help convince elderly people and others who don’t use the Internet of its value and shrink the divide, Levin said.
The Media Mobilizing Project, a community organizer and support group for low-income families in Philadelphia, works to publicize local and state policies that harm low-income residents.
“I’m not saying Comcast is a bad guy, but how do we transform Internet Essentials to let everyone, even if they owe money to Comcast, or have unreturned equipment, or aren’t part of the school lunch program and are 45 years old and out of a job, to get connected so they can change their lives?” asked Hannah Sassaman, policy director at the project and a frequent critic of Comcast. “One thing we’ve learned, broadband adoption is not accomplished through public relations ploys. It’s accomplished through working with people every day, in their day-to-day lives, to show they can get online for reasons they think are important.”
That also means including seniors, said Tom Kamber, executive director of the Older Adults Technology Services, a nonprofit group in New York City that offers digital training courses for seniors, whose broadband adoption rate languishes at 41 percent, “which is a catastrophe,” Kamber said.
“Once they get online to find out they can socialize and save money, they don’t want to give it up,” Kamber said. “It’s a health benefit by keeping them from becoming isolated.”
Kamber added, “I genuinely believe Comcast is going to take the next step to do something. Internet Essentials is extremely promising, but I would like to see more and I know they can do more.”
Kamber may be waiting for a while. For now, Cohen said, Comcast will keep Internet Essentials as is.
“There is always more that we can do,” Cohen acknowledged. “But we don’t want to lose the focus on the population who we started with.”
As it stands, the FCC is reviewing whether a Comcast takeover of Time Warner is in the public interest. If greater Internet adoption for a wider range of people, like Ed, becomes a condition, Internet Essentials may be in for a few changes.
Correction, May 29, 2014 at 12:00pm: A previous version of this article misstated the unit measurement in Comcast Corp.’s service area that have annual income equal to or less than what the federal government set for eligibility in the national free and reduced-price school lunch program. It should have been 7.2 million families as defined by the Census Bureau, not people.
Between February 2010 and July 2011, Lisa and Bob Parr filed 13 complaints about air pollution from gas and oil operations near their ranch in Wise County, Texas. Sometimes they had trouble breathing, they told the Texas Commission on Environmental Quality (TCEQ). They also experienced nausea, nosebleeds, ringing ears and rashes.
Other families were also alarmed. Between 2008 and 2011, the TCEQ received 77 complaints from Wise County, in the Barnett Shale drilling area in North Texas. One said the odor was so powerful that the complainant “couldn’t go outside,” according to the TCEQ report.
Frustrated and angry, the Parrs decided to sue. Their attorney warned them that lawsuits against the oil and gas industry rarely, if ever, succeed. But the Parrs persisted and last month won what appears to be the first successful U.S. lawsuit alleging that toxic air emissions from oil and gas production sickened people living nearby. A Dallas County jury found that Aruba Petroleum, a privately owned company based in Plano, Texas, “intentionally created a private nuisance” that affected the family's health and awarded the Parrs almost $3 million in damages.
“When you don’t have a strong regulatory system, a system to prevent what happened to this family, the only place left to turn for help is the courts,” said Robert Percival, director of the University of Maryland’s Environmental Law Program.
There are no assurances the verdict against Aruba will survive an appeal or lead to regulatory changes in Texas or any of the other states where people complain their health is jeopardized by gas and oil drilling. The issues are so complex that the industry, the public and policy makers may be sorting through them for years.
Aruba has asked Judge Mark Greenberg, who presided over the Parrs’ case, to reverse the jury’s verdict. Greenberg is expected to hear arguments over the verdict in June.
“This case will be looked at very, very closely because it has set the stage in a way that has never been set before,” said attorney Tomas Ramirez. He represents two families in similar lawsuits in the booming Eagle Ford Shale of South Texas, where emissions are raising the same alarms that have been sounding in the heavily developed Barnett Shale region the Parrs call home.
Aruba used two long-standing industry arguments in its defense: That the emissions could have come from one of its competitors’ wells, and that it was in compliance with Texas environmental rules.
The fact that those arguments failed in this case “exposes every company to more possible litigation,” said Thomas McGarity, a University of Texas law school professor who specializes in environmental and administrative law.
“Losing this case was not good for the industry,” McGarity said. “My guess is the industry will coalesce around this case. The industry will want to stop the dam from breaking wide open … This is where they will take a stand.”
Aruba officials declined requests for interviews but released a statement though a public relations firm that said: “We contended the plaintiffs were neither harmed by the presence of our drilling operations nor was the value of their property diminished because of our natural gas development.”
In a motion to overturn the verdict, company lawyers argued “there is no evidence that Aruba engaged in any conduct intended to cause harm … Aruba’s operations complied with best industry practices and met the standard for a reasonable and prudent oil and gas operator.”
More than 100 wells have been drilled within two miles of the Parrs’ ranch, Aruba pointed out, and only 22 of them are owned by Aruba. On its website, Aruba says it is the fifth-largest of the 117 companies operating in Wise County.
The Parrs’ attorney, Brad Gilde, said TCEQ documents show Aruba repeatedly violated state regulations and in some cases was fined for its offenses.
There was sufficient evidence to support a jury finding that “Aruba either (1) knew an [emissions] invasion was resulting from its conduct, or (2) knew an invasion was substantially certain to result from its conduct,” Gilde said in his response to Aruba’s motion to overturn the verdict.
William Anaya, a Chicago attorney who often represents the oil and gas industry, said the Parrs’ victory is an anomaly and won’t set a precedent that the industry can be held responsible for dangerous emissions.
Oil and gas development is safe and heavily regulated, he said, which is why cases against the industry rarely even make it to court, much less succeed.
“I’m incredulous of the whole thing,” Anaya said.
The Parrs, meanwhile, are trying to sell their 40-acre ranch, which the jury concluded had lost $275,000 in value because of the Aruba facilities. It has been on the market for two years, but so far they’ve had no offers. Their neighbors, Christine and Tim Ruggiero, also sued Aruba, but agreed to an out-of-court settlement. The Ruggieros’ settlement prohibited them from talking publicly about their case, and they declined to be interviewed for this article.
Lisa Parr said she’s constantly stopped at the supermarket, the gas station and her daughter’s school by people who offer their congratulations and thanks. She said she even gets calls from strangers who start out by saying “You don’t know me but … ”
“They want to tell me how happy they are for us,” she said. “And they thank us for fighting … It’s like they are feeling it too, like our win is their win.”
That the case was won in Texas makes the Parrs’ victory especially unusual. A recent investigation by the Center for Public Integrity, InsideClimate News and The Weather Channel found that Texas politicians often work hand-in-hand with the industry, regulations are lax and little is known about the risks from the toxic soup of emissions the industry releases.
Thousands of oil and gas facilities, including at least one Aruba facility near the Parrs’ house, self-audit their emissions without reporting them to the state. The TCEQ, which regulates most air emissions, doesn't even know some of these facilities exist.
TCEQ chairman Bryan Shaw said the agency doesn’t plan to take any concrete action as a result of the lawsuit. Instead, it will continue to enforce existing regulations, he said during a brief interview earlier this month at the TCEQ Environmental Trade Fair and Conference in Austin.
The agency’s business-as-usual attitude doesn’t surprise former TCEQ Commissioner Larry Soward, whose contentious, six-year term ended in 2009.
“TCEQ is so strongly set in their belief that emissions from oil and gas have little or no effect on air quality or human health that they will simply ignore this case,” Soward said. “They are very pro -industry and they will not change their position because of some jury award.”
The Parrs’ story began in 2008, after Bob Parr married Lisa and brought her and her daughter Emma to live on his ranch near Decatur, 60 miles northwest of Dallas. Parr bought the land in 2001 and built a 2,500-square-foot house in a gentle valley that he hoped would protect it from the tornadoes that often rip across the plains. There were a couple of old oil wells nearby but little else except rolling prairie and clear skies stretching from horizon to horizon.
Like many people in Texas and other parts of the United States, Parr doesn’t own the mineral rights to his land. When he bought the ranch that didn’t seem to be a problem. The drilling boom in the Barnett Shale hadn’t begun yet. He had no idea his new house was sitting atop one of the nation’s largest gas and oil reserves.
By the time Lisa and Emma moved to the ranch, gas wells had begun encircling the property. A little less than a year later, Lisa Parr said she started coughing and wheezing and noticing a chemical odor “like burning plastic.” She began noting the dates and details of her ailments in a journal.
She filed her first complaint with the TCEQ on Feb. 20, 2010.
The agency assigned the complaint case number 138794. It succinctly summed up Lisa Parr’s grievance:
“The complainant alleged that odors from a natural gas facility were creating a nuisance,” according to a synopsis of the complaint on the TCEQ’s website.
The matter was investigated the same day and closed with an equally succinct note: “No violations were found.”
Inspector saw ‘heavy plumes’ of emissions
The Parrs didn’t know it at the time, but their neighbors on Star Shell Road, the Ruggieros, also had complained about Aruba.
On two occasions the TCEQ dispatched inspectors to two Aruba facilities near the Ruggieros and the Parrs because of odor complaints it received over an 11-day span in January and February 2010. The TCEQ concluded that Aruba had failed to prevent the discharge of volatile organic compounds (VOCs) onto neighboring properties. Many VOCs — including benzene, toluene, ethylbenzene and xylene — are known to cause the ailments the Parrs had complained about.
The TCEQ fined Aruba $32,500.
In July, the Parrs complained about a third Aruba facility. They said foul odors coming from a wellhead caused “dizziness and caused their nose to burn,” according to the complaint. The Parrs were also worried because three of their chickens had mysteriously died.
A TCEQ investigator arrived about 2½ hours later and began collecting air samples, according to an agency report. Using an infrared camera, he identified "heavy plumes" of emissions wafting from the Aruba facility and toward the Parr house, 280 feet away.
The investigator walked into the plume to obtain a canister sample. Thirty seconds later he “felt the physical effects of dizziness and a sore throat,” the report said. He left immediately.
The TCEQ uses a three-point rating system — major, moderate and minor — to classify the harm caused by a release. The agency classified the Aruba release as “moderate” but decided the incident warranted a vigorous response.
“Due to the seriousness of the alleged violations and the deterrent effect of a district court order” the case was referred to the Texas attorney general’s office, according to a letter the TCEQ sent to Christine Ruggiero.
Aruba paid $108,000 to settle the court case, the third-highest penalty collected in 99 cases that the attorney general’s office prosecuted on behalf of the TCEQ that year.
Evidence key to the attorney general’s case included an analysis of the air samples the TCEQ investigator had taken. It showed concentrations of five VOCs high enough to cause short-term health effects and 20 compounds in amounts high enough to cause long-term health effects, according to the attorney general’s complaint.
The TCEQ’s report on the incident revealed something else: Aruba had been operating the facility without a TCEQ air emissions permit.
‘Our life turned into a nightmare’
In April 2011, the TCEQ discovered that a separate Aruba facility less than a mile from the Parrs’ ranch had spewed 5,383 pounds of VOCs into the air over a 5½-hour period, according to TCEQ records. The emissions accounted for more than 10 percent of the total amount of VOCs the facility was authorized to emit in an entire year.
The accident was caused by a broken valve. The TCEQ fined Aruba nearly $3,000 for failing to operate its equipment properly and for failing to report the incident within 24 hours, as regulations required. At the time, the TCEQ considered Aruba an “average performer” for compliance.
Meanwhile, Lisa Parr’s symptoms were worsening. She saw six doctors, who were baffled by her illnesses. She had oozing welts on her scalp and lumps the size of walnuts on her neck. Bob Parr and Emma suffered from nosebleeds and irritated throats.
“Our life turned into a nightmare,” Lisa Parr said in an interview. “We were deathly sick, scared and didn’t know what to do.”
The Ruggieros continued to complain. But their situation was different. They had reluctantly allowed Aruba on their land after learning that the property’s original owner had retained the surface and mineral rights. But they were shocked when the company erected a drilling rig the length of a football field away from their front window.
“Based upon their actions, Aruba Petroleum appears not to be concerned with our environment or health at all,” Christine Ruggiero wrote to the TCEQ in August 2010. “They chose to place their operations 300 feet from our children, but they refuse to take proactive measures to protect them.”
As the dispute deepened between the Ruggieros and Aruba, Christine began keeping a log of emissions and spills on and near their property. She shared the log with Lisa Parr, who was stunned when she compared the dates of her health crises with the events Christine had documented. Many of the dates matched.
In October 2010, the Ruggerios sued Aruba, complaining that toxic fumes were drifting from a natural gas well the company had drilled near their home. Aruba denied the allegations, saying it had paid the Ruggieros $30,000 to drill two wells on their land and had been a “reasonable and prudent” operator.
Lisa Parr, meanwhile, told one of her doctors what she had learned from Christine Ruggiero’s logbook. He sent her to a specialist who focuses on illnesses triggered by environmental factors, such as polluted air and water. Tests revealed that chemicals in her blood matched chemicals found in the air samples the TCEQ investigator had taken when he responded to her July complaint.
In March 2011, the Parrs filed a lawsuit against Aruba and 10 other companies, claiming the family was “under constant, perpetual, and inescapable assault of Defendants’ releases, spills, emissions, and discharges of hazardous gases, chemicals, and industrial/hazardous wastes.” They sought up to $66 million in damages.
In November, the Ruggieros settled their case with Aruba. They sold their 10-acre property, which they said had been devalued from $257,330 to $75,240, and moved with their 10-year-old daughter to Pilot Point, Texas, about 45 miles away.
“Leaving Gasland is not winning, it’s merely an end to losing,” Tim Ruggiero wrote in a blog post for Earthworks, an environmental organization that opposes hydraulic fracturing, the process that has made it profitable to tap deeply buried shale deposits, like the Barnett and Eagle Ford.
A narrow win
The trial of the Parrs’ lawsuit began on April 7 and lasted two weeks. Both sides called expert witnesses, who offered contradictory opinions on the effects of gas and oil emissions. According to scientists interviewed by InsideClimate News and the Center for Public Integrity, air monitoring in Texas, and across the nation, is so flawed that scientists don’t fully understand how the industry’s emissions affect public health.
One of the experts the Parrs relied on was Paul Rosenfeld, a California-based environmental chemist. He testified that Aruba’s wells contained VOCs capable of causing headaches, nosebleeds, rashes, dizziness — the very symptoms the Parrs had complained about.
An expert witness for Aruba countered by saying that the amounts of VOCs on the Parrs’ property were so small that they couldn’t have affected the family’s health, according to the company’s motion to reverse the verdict.
The deliberations lasted two days. At one point the jurors were deadlocked and told the judge a verdict might not be possible, said David Davis, the jury foreman. The judge ordered them to keep trying.
In an interview with InsideClimate News, Davis said a couple of factors tipped the balance in the Parrs’ favor.
The medical evidence, including Lisa Parr’s blood tests, bolstered the family’s case, said Davis, who was speaking as an individual juror. While that evidence alone wouldn’t have won the case for the Parrs, it gave the jury “something to evaluate that was documented evidence of what the plaintiffs were claiming,” he said.
Testimony by Aruba officials that they had few formal written plans or policies in place to address emissions weighed against the company, Davis said.
“There was a perception, if you are engaged in this activity, you would have written guidelines that would provide consistency and insure you were following the rules and operating within the confines of state regulations,” he said.
In the end, Davis said, jurors applied the letter of the law as laid out in the judge’s instructions. The equation would have been the same if someone were claiming that smoke from a barbecue restaurant was causing a nuisance, he said.
“It was a matter of did A, B and C meet the definition of a nuisance,” Davis said. “I don’t think anybody realized this was a case of significance outside of what it meant to the plaintiffs and defendant … Nobody was defending the industry or backing an environmental cause. It was simply, did the defendant cause the harm alleged by the plaintiff?”
After the evidence and testimony was added up — a process Davis likened to placing grains of sand on a scale until the balance tipped — the Parrs had proven their case.
On April 22, the jury delivered a 5-1 verdict in the Parrs’ favor. Instead of getting the $66 million they had asked for, they got $3 million. Still, it was a victory.
Gilde, their attorney, hopes the verdict will ripple throughout Texas and across the country. He has already been contacted by other families who want to fight the industry’s air pollution.
“The issues in this case are important,” Gilde said. “It means the consequences of toxic emissions cannot be summarily dismissed. The industry will now be made to be more responsible.”
A wake-up call for regulatory change?
In addition to beating Aruba, the Parrs also highlighted weaknesses in Texas’ regulatory system.
That may not sit well in a state smitten by an industry that pumped $7 billion in taxes into the state’s coffers in the last two years.
“Texas has a long reputation of being extremely pro-business,” said Percival, with the University of Maryland’s Environmental Law Program. “The message from all parts of the state, including the regulatory agencies, is one of full speed ahead without being sensitive to the concerns of the public.”
Ilan Levin, an Austin-based lawyer with the Environmental Integrity Project, a research and advocacy organization, worries that instead of being a wake-up call for regulatory change, the Parrs’ case could lead state officials and lawmakers to find ways to block citizens from winning similar lawsuits.
Since 2000, the industry has poured nearly $58 million into the campaign coffers of state candidates in Texas, according to an analysis of data from the National Institute on Money in State Politics.
“What we have is a system that is heavily tilted in favor of those who can play the money game,” said Meredith McGehee, policy director for the Campaign Legal Center, a Washington D.C.-based nonprofit that tracks money in politics and monitors government ethics.
“The oil companies see the contributions as a good business investment,” she said. “They are making an investment with an expectation of access when they need it.”
Texas legislators have listened to the industry in the past.
In January 2011, with air quality worsening and the federal government beginning to take notice, the TCEQ adopted rules to reduce emissions in the Barnett Shale.
A few months later, however, the legislature overwhelmingly approved a bill that effectively prevented those regulations from being applied statewide. It later weakened the rule again, by narrowing the law to include only 15 of the 24 counties in the Barnett region.
Ramirez, the attorney who represents two families in the Eagle Ford Shale, is studying the Parrs’ case for strategies that could give his clients an extra edge. He’s sure industry lawyers are doing the same thing, to find ways to defeat future lawsuits.
“Each case has its own set of facts that are subject to intense examination during a trial,” Ramirez said. “While one case may look like another, there are so many subtle and distinguishing differences that you can never be sure how it will play out.”
Jim Morris, a managing editor with the Center for Public Integrity, and Lisa Song, a reporter with InsideClimate News contributed to this report, which is part of an ongoing project by the two organizations.
If former Sen. Evan Bayh again runs for governor in Indiana — there's speculation he'll seek his old post, although Bayh is mum on the matter— he'd likely have a multi-million-dollar fundraising head start on any opponent.
That's because the Hoosier State's campaign finance laws allow politicians to use any or all money raised for federal campaigns toward state-level political bids, Indiana Election Division Co-Director Trent Deckard confirmed in an email to the Center for Public Integrity.
Bayh has $9.8 million remaining in his dormant campaign account, an amount he's largely sat on since leaving the U.S. Senate in early 2011.
That's more than any other former member of Congress who isn't at the moment seeking elected office, and part of nearly $100 million in leftover campaign money such ex-candidates have idled, as the Center for Public Integrity previously reported.
And it's exponentially more than Indiana's Republican Gov. Mike Pence reported having in his campaign fund at 2013's end, which was about $1.4 million. (Pence, a former congressman, transferred or hundreds of thousands of dollars in cash and equipment from his federal campaign committee to his gubernatorial committee in 2011.)
Bayh, a Democrat, is lucky he's not mulling a gubernatorial bid in, for example, Alabama.
There, it's a felony for an office-seeker to "receive or spend, in a campaign for state or local office, campaign funds in excess of $1,000 that were raised by a principal campaign committee of a federal candidate."
For better or worse, thank the federal government for the chasm between these two extremes.
Federal campaign finance law doesn't restrict federal candidates' use of campaign cash for state-level races, declaring plainly: "Contributions from federal candidate committees to state or local candidate committees are subject to state law."
But say a state governor decides to run for U.S. Senate. Federal campaign law explicitly bars this politico from directly using funds raised at the state level to fuel a federal-level campaign.
There is, however, one notable loophole.
"A nonfederal committee of the same candidate may refund its leftover funds to its contributors and may coordinate arrangements with the federal campaign for a solicitation of those same persons," federal law provides. "The full cost of this solicitation must be paid by the federal committee."
Asked what he plans to do with his surplus campaign cash, Bayh replied in an email: “Because the future is difficult to predict, I don't want to foreclose any possibilities at this time."
Bayh served as Indiana's governor from 1989 to 1997, and as Jerry Brown in California has proven, it's possible for a state's former chief executive to have a second act on his first, big electoral stage.
While in the Senate, Bayh flirted with, then ultimately decided against a 2008 presidential bid. Later, he nearly become then-Democratic presidential nominee Barack Obama's vice presidential running mate.
If Pence chose not to seek another term as governor in 2016, that'd create a major opening for Bayh, who some Indiana Democrats view as their best shot to regain the office since Democrats last occupied it in 2005.
Ready for Hillary is now primed to pump Democratic congressional candidates full of cash.
The pro-Clinton super PAC today filed paperwork to convert itself into a hybrid PAC. This relatively new type of political committee may raise unlimited amounts of money to advocate for and against candidates — and at the same time collect limited amounts of cash to give directly to candidates.
"Ready for Hillary and our more than two million supporters are not only excited about encouraging Hillary to run in 2016, but also excited to be working to elect Democrats in 2014," spokesman Seth Bringman said in an email to the Center for Public Integrity. "This is another tool that we now have available to us to help in that effort."
How many candidates does Ready for Hillary plan to contribute to during the midterms — and which ones?
That's still unclear.
Said Bringman: "So far the only decision that has been made is the decision to create the option" to make direct donations to candidates.
Ready for Hillary's shift in operating status comes as Democrats are struggling this year to retain their slim majority in the U.S. Senate. Democrats' hopes of retaking a majority in the U.S. House, meanwhile, are rapidly disappearing.
Ready for Hillary formed in early 2013 with the goal of laying the groundwork for a 2016 presidential run by Clinton, who has not announced her future political intentions. Nevertheless, a number of high-profile politicos have already endorsed a second Clinton White House bid.
The committee hasn't acted like many big-dollar super PACs, eschewing massive television and radio advertising blitzes in favor of grassroots organizing, direct mail and online messaging, among other efforts.
It's also set a voluntary donation cap of $25,000, even though super PACs and hybrid PACs may accept any size donation to use toward independently boosting or slamming political candidates.
Ready for Hillary reported more than $857,000 in available cash through March 31, according to its most recent financial filing with the Federal Election Commission. It spent nearly $1.6 million during the first three months of the year, with direct mail, travel, printing, consulting fees and staff salaries among its biggest expenses.
Since its formation, it's raised more than $5.7 million — ranking it among the most financially successful super PACs this election cycle.
As a hybrid PAC, Ready for Hillary will maintain a separate fund from which it may make direct contributions to candidates. For such donations, it must adhere to federal law that allows traditional political action committees and hybrid PACs to give federal-level candidates $5,000 per election.
An Iowa-based organization dedicated to combating“the radical animal rights movement” and led by a former Missouri Republican senator’s chief of staff has launched a new super PAC, according to paperwork filed with the Federal Election Commission.
The Protect the Harvest Political Action Committee told the elections regulator that it “intends to raise funds in unlimited amounts” to call for the election or defeat of federal candidates.
Which politicos will be targeted, however, is still unclear.
Neither the super PAC’s treasurer, Brian Klippenstein, nor its attorney, Mark Roth, responded to requests for comment from the Center for Public Integrity.
Super PACs are legally allowed to solicit unlimited contributions to produce political advertisements — so long as their spending is not coordinated with any candidates’ campaigns.
Klippenstein currently serves as the executive director of Protect the Harvest, a 501(c)(4) “social welfare” nonprofit established in 2011 to educate the public about “the benefits of farming, ranching and hunting” and to advocate “for the right to conduct such activities.”
The nonprofit may engage in politics, although federal law mandates that influencing elections may not be its primary purpose.
On its website, Protect the Harvest warns that “the animal rights movement in America, led by the Humane Society of the United States, has evolved into a wealthy and successful attack group determined to end the consumption of meat, threaten consumer access to affordable food, eliminate hunting, outlaw rodeos and circuses and even ban animal ownership (including pets) altogether.”
That's "baloney," said Joe Maxwell, the Humane Society of the United States' vice president of outreach and engagement. He said his organization is "leading efforts to ensure that we have good stewards of the land and the animals on our farms."
Protect the Harvest, Maxwell asserted, is "nothing but a front group" that is "in bed with industrialized agriculture."
Previously, Klippenstein spent 26 years on Capitol Hill working for Missouri Republicans, including Sens. Roy Blunt and Kit Bond — the latter for whom he served as chief of staff for five years, according to Klippenstein’s online biography.
For his part, Roth is also listed as the registered agent and incorporator of Protect the Harvest, according to Iowa business records. Millionaire businessman Forrest Lucas, founder of Lucas Oil Products, serves as Protect the Harvest’s president.
Tax recordsshow Protect the Harvest raised about $927,000 between October 2011 and December 2012. A report detailing its 2013 finances is not expected to be filed with the Internal Revenue Service until later this year.
As a social welfare nonprofit, Protect the Harvest is not required to publicly disclose its donors.
FEC records indicate, however, that Lucas Oil Products contributed $200,000 to Protect the Harvest in 2012 to fund advertisements critical of Iowa Democrat Christie Vilsack, who unsuccessfully challenged incumbent Republican Rep. Steve King.
American Action Network, the social welfare nonprofit led by former GOP Sen. Norm Coleman of Minnesota, also contributed $100,000 to the group sometime between July 2012 and June 2013, according to its annual tax return.
And a group called Missouri Farmers Care — which says its mission is to "solicit contributions to support education and advocacy for Missouri agriculture" — also donated $35,000 Protect the Harvest in 2012.
Documents list Dale Ludwig, the longtime executive director of the Missouri Soybean Association, as the treasurer of Missouri Farmers Care and as a director of Protect the Harvest. Jackie Klippenstein, Brian's wife and a lobbyist for the Dairy Farmers of America, is also listed as one of the 30 members of Missouri Farmers Care.
Protect the Harvest’s super PAC arm will be required to disclose its funders to the FEC.
While Brian Klippenstein has financially supported Republicans such as 2012 presidential nominee Mitt Romney and House Speaker John Boehner in the past, he has not made any contributions to Iowa politicians this election cycle, according to a Center for Public Integrity review of FEC records. Nor has Lucas.
Last year, Roth, the attorney, contributed $1,000 to businessman Mark Jacobs, who is seeking to become the Republican Party’s nominee for U.S. Senate this year.
Polls show Jacobs trailing state Sen. Joni Ernst ahead of the GOP's June 3 primary.
Additionally, Protect the Harvest itself has endorsed a Missouri ballot measure, backed by the Missouri Farm Bureau, which would amend the state’s constitution to guarantee that “the right of Missouri citizens to engage in agricultural production and ranching practices shall not be infringed.”
Protect the Harvest backed a similar — and successful— ballot measure in North Dakota in 2012.
Critics argue“right to farm” laws, which have been supported by the board of the conservative-leaning American Legislative Exchange Council, could impede attempts to regulate genetically modified crops and may benefit large, agricultural corporations, not family farmers.
"If right to farm would pass," said Maxwell, of the Humane Society, "it will allow foreign corporations and big agriculture corporations to do whatever they want in Missouri's countryside."