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Can this 'dark money' group help the Democrats keep the Senate?

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Liberals may blame conservatives for the ongoing surge of political “dark money” dominating the 2014 midterm elections. But Democrats are now taking full advantage of these secretive, free-wheeling political behemoths, while at the same time, bemoaning their influence.

At the forefront: the nonprofit Patriot Majority USA, which is providing Democrats with a countervailing force against the political machine of conservative billionaires Charles and David Koch while using a similar playbook.

This election cycle, Patriot Majority USA has spent more than $7 million on political advertisements, according to reports filed with the Federal Election Commission. That makes it the largest Democratic-aligned dark money operation in the country.

Every dollar has fueled negative messages that call for the defeat of Republican politicians, who are seeking to pick up six Senate seats in November to win control of Congress’ upper chamber and who have generally seen more support from dark money groups.

The union-backed Patriot Majority USA is led by a staunch ally of Senate Majority Leader Harry Reid, D-Nev., who has demonized the Koch brothers as “un-American” and railed against“hidden dark money which is corrupting our elections.”

The Senate races raging in Arkansas, Louisiana and North Carolina are of particular interest to Patriot Majority USA, which has run more than 11,000 TV ads across the three states, according to a Center for Public Integrity review of data provided by Kantar Media/CMAG, an advertising tracking service.

The group has accounted for about one out of every nine ads aired in the Arkansas Senate race, one of every eight in Louisiana and one of every 13 in North Carolina.

That approaches — though does not yet match — the number of ads aired by the Koch-backed Americans for Prosperity.

“They want to spend their money in places where they think they can do some good,” said Charles Prysby, a political science professor at the University of North Carolina at Greensboro.

Unlike candidates, parties and political action committees, nonprofits such as Patriot Majority USA and the Koch-funded Americans for Prosperity are not legally required to disclose their donors.

But these nonprofits, frequently dubbed dark money groups, are allowed to fund advertising barrages that overtly call for the election or defeat of political candidates — or simply praise or criticize them.

In Arkansas in particular, Patriot Majority USA has for months branded Rep. Tom Cotton, the GOP’s Senate nominee, as “a politician we just can’t trust” and criticized him for voting against the farm bill.

Arkansas Democratic Party spokesman Patrick Burgwinkle welcomes Patriot Majority USA’s participation.

“Our side will be outspent in this race,” Burgwinkle said. “That’s why it’s important to have groups hold Congressman Cotton accountable to his reckless positions.”

A spokesman for Cotton did not respond to requests for comment, but the Republican has said he supported the farm bill but voted against it because Democrats included food stamp funding in the legislation. He argued the two issues should be voted upon separately, which won him praise from the conservative Club for Growth, which, at the time, said all lawmakers should vote against the “bloated proposal.”

By law, election-related expenditures cannot be the “primary purpose” of so-called “social welfare” nonprofits, such as Patriot Majority USA and Americans for Prosperity, which are organized under Section 501(c)(4) of the U.S. tax code.

However, thanks to the U.S. Supreme Court’s Citizens United v. Federal Election Commission ruling in 2010, they are free to spend huge amounts of money advocating for the election or defeat of federal candidates.

These nonprofits are also allowed to keep the identities of their donors secret, unless a contribution is meant to fund a particular ad — something that rarely happens.

Between January 2011 and December 2012, Patriot Majority USA raised roughly $26 million, according to tax records.

The source of most of that money is not publicly known. But a Center for Public Integrity review of Department of Labor, Federal Election Commission and Internal Revenue Service filings shows that 13 contributors have combined to give Patriot Majority USA about $4.7 million since January 2011.

Among the newly identified contributors:

  • The Partnership for Quality Home Healthcare ($500,000);
  • The International Longshoremen's Association PAC ($50,000);
  • The American Health Care Association ($25,000);
  • The American Association for Justice PAC ($10,000).

Patriot Majority USA’s top known donor is the Alliance for Quality Nursing Home Care, which gave $1.25 million over two years.

That health industry trade group — which last year merged with the American Health Care Association — was first identified as a contributor to Patriot Majority USA by the Center for Responsive Politics.

Greg Crist, a spokesman for the American Health Care Association, declined to comment, saying, "As a general practice, we don't comment on our political giving strategies."

Patriot Majority USA has also collected seven-figure sums from at least two labor unions: $1.14 million from the Service Employees International Union, including $280,000 from the SEIU’s state council in Pennsylvania, and $1 million from the American Federation of State, County and Municipal Employees. These large labor union contributions were first reported by the Huffington Post.

In all, federal records show that labor unions have donated at least $2.5 million to Patriot Majority USA since January 2011.

Craig Varoga, the president of Patriot Majority USA, declined to answer specific questions from the Center for Public Integrity, but ahead of the 2012 election, he issued a stark admonition in a column published in the trade magazine Campaigns & Elections about the post-Citizens United world.

“It does not matter whether any of us agree or disagree with current campaign finance laws, or court interpretations and FEC rulings on these laws,” Varoga wrote. “This brave new world is here.”

Earlier this year, he reiterated to the New York Times that his group would not “unilaterally disarm.”

And as to the issue of donor disclosure? In 2012, Varoga told the Huffington Postthat the funders of his organization would not be “particularly surprising,” but, nevertheless, they would not be revealed.

Varoga himself is a veteran political strategist and longtime ally of Reid, the Senate’s top Democrat.

During the early 1990s, Varoga served as Reid’s communications director, and in 2010, he led an independent group that helped Reid win re-election. He’s also worked on the presidential campaigns of Democrats Bill Clinton, Al Gore and John Kerry, among others.

Patriot Majority USA’s other directors, according to tax documents, include political consultant Joe Householder, who once worked as Hillary Clinton’s communications director in the U.S. Senate, and Bill Burke, the former head of the Foundation for the Future, a Democratic-aligned group that was active in redistricting fights.

Casey Mann, executive director of the North Carolina Democratic Party, understands that her party faces a dilemma over dark money.

On the one hand, Mann says it is “unfortunate” that liberal groups like Patriot Majority USA have entered the fray to help the state’s incumbent Democratic senator, Kay Hagan, “even if it is a reaction to the conservative dark money groups.”

On the other, she says she is “grateful for their actions,” including Patriot Majority USA’s $1.7 million TV ad blitz slamming Republican candidate Thom Tillis.

“These are the rules that are set before us,” she continued. “You have to actually win first … to get the kind of policies you want to see.”

Mike Brown, the chairman of the Benton County Democratic Party in Arkansas, agrees. There, Democratic Sen. Mark Pryor is locked in a close race with Cotton, his Republican challenger.

“You lay out rules about what’s fair in a fight,” he said. “But if the other side starts doing it, you have to answer tit for tat.”

Nevertheless, both the Pryor and Hagan campaigns have repeatedly criticized the Koch brothers’ nonprofits for spending big in their Senate races.

“We can’t let our Democratic Senate be bought,” pleaded one recent fundraising email from the Pryor campaign. “I would prefer our elections Koch-free,” wrote Hagan in a recent campaign email of her own. “You can’t buy a democracy. But Koch-backed groups are sure giving it a try.”

Ann Clemmer, a former Republican state lawmaker who now teaches political science at the University of Arkansas at Little Rock, says it’s “pretty disingenuous for Democrats to cry foul” about Republican’s big-money allies “when there’s plenty of it on their side as well.”

Nevertheless, she understands Democrats’ desire to fight back.

“You can’t let one side do it and not answer,” she said. “You don’t want to let charges go unanswered.”

Screenshot from an attack ad produced by Patriot Majority USA that targeted Republican U.S. Senate candidate Tom Cotton of Arkansas. This dark money group aligned with the Democrats has spent about $7 million on negative ads in three key Senate races.Michael Beckelhttp://www.publicintegrity.org/authors/michael-beckelhttp://www.publicintegrity.org/2014/09/03/15436/can-dark-money-group-help-democrats-keep-senate

Afghan government can’t account for billions of dollars in Pentagon aid

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Billions of dollars in direct U.S. aid to the Afghan army and police have been poorly tracked, leaving no way to verify if the money was spent as intended, according to a new report from the Pentagon’s internal watchdog.

The Department of Defense provided $3.3 billion in such aid between October 2010 and October 2013, yet Afghanistan’s government “lacked basic controls to provide reasonable assurance that it appropriately spent” the money, according to a report released last week by the Pentaton’s assistant inspector general for financial management and reporting, Lorin T. Venable. 

Not only that, but the U.S. agency responsible for supporting Afghan’s security forces, known as the Combined Security Transition Command-Afghanistan, hasn’t penalized the local government for poor oversight or improper handling of the funds, the report complained.

Because of the continuing lack of accountability, $13 billion that the Defense Department plans to provide Afghan security forces between fiscal years 2015 and 2019 “may be subject to wasteful spending and abuse,” it warned.

Already, as much as $1.5 billion in U.S. aid, sent between December 2012 and December 2013, cannot be accounted for because it was commingled with other revenues in government bank accounts, the report said. The Afghan government also spent more than $82 million in Pentagon funds on unapproved items, including Afghan armed forces salaries, overtime, and travel, without any penalty, the report added.

The report also raised new concerns about an old problem in the Pentagon’s Afghan aid program, namely the disbursement of foreign aid funds to apparent “ghost workers.”

Three years ago, the acting Special Inspector General for Afghanistan Reconstruction first complained that the Afghan Ministry of Interior couldn’t accurately say how many people worked for the national police, and that as a result, there was “limited assurance” that only those on the job were receiving paychecks underwritten by foreign aid.

In February of this year, current Special Inspector General for Afghanistan Reconstruction John Sopko reiterated those concerns in a letter to the commanding general and deputy commanding general of the Combined Security Transition Command-Afghanistan, as well as the deputy commanding general of NATO Training Mission-Afghanistan.

“The U.S. may be unwittingly helping to pay the salaries of non-existent members of the Afghan National Police,” Sopko wrote. 

Last week’s inspector general report makes clear that these problems still are not under control. It notes that payments for security forces’ salaries stayed the same in key areas even after many employees left.

For example, the report found that the total payroll for police in one Afghan province was $84,480 for four consecutive months, September through December of 2013, even though 66 police departed during that time. In total, six payments of more than $500,000 were called suspect.

In total, the report said, more than 4,500 payments by the Ministry of Interior, which runs the police, totaling around $40 million, were “potentially improper” because the ministry did not monitor how many employees were leaving and compare that figure to the salary totals.

The Ministry of Finance also could not document that $17.4 million withheld from salaries for police and military pensions was used for that purpose, or whether those receiving pensions were ever paid, the report said.

The report also noted that some police employees in remote regions were paid in cash, with individuals from the Ministry of Interior hand-delivering the money. The cash payments were not tracked, and the ministry couldn’t verify whether employees were paid the correct amount, if at all.

Venable’s report made 14 recommendations for reforms, including that the simple solution of requiring that aid money be kept in separate bank accounts from other government money, and that the Ministry of Finance provide bank statements for these accounts so that the aid’s disbursement can be accurately tracked.

The report also said the Ministry of Interior should compare payroll data with up-to-date worker rolls, and withhold future funding to compensate for improper payments. Alternatively, it said, officials should be required to document why the future funding was not withheld.

Major General Kevin Wendel, the commanding general of the Combined Security Transition Command-Afghanistan, said in a written response to the report on Aug. 14 that he agreed with all of the recommendations.

Wendel said the next agreement between his agency and the Afghan government would require separate bank accounts for the aid; that they would withhold inappropriately spent funds in the future or explain why they weren’t doing so; and that lists of departing employees would be compared with payroll data to ensure there were no unauthorized payments. He added that they were in the process of training employees at the Ministry of Interior to compare that data on their own.

Thirteen years in, a few lessons are evidently being learned.

An Afghan Army soldier picks up his weapon at a training facility in the outskirts of Kabul, Afghanistan, in 2013. The Afghan National Security Forces depend on billions of dollars in funding from the United States and its allies.James Arkinhttp://www.publicintegrity.org/authors/james-arkinhttp://www.publicintegrity.org/2014/09/03/15456/afghan-government-can-t-account-billions-dollars-pentagon-aid

GOP’s Senate hopes energized by Koch network ad blitz

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The secretive political network of conservative billionaires Charles and David Koch has aired more than 43,900 television ads this election cycle in an attempt to help Republicans take control of the Senate in the upcoming November election.

That amounts to nearly one out of every 10 TV ads in the 2014 battle for the Senate according to a new Center for Public Integrity analysis of data provided by Kantar Media/CMAG, an advertising tracking service, covering spending from Jan. 1, 2013, through Aug. 31, 2014.

The total includes the six most active nonprofit groups in the Koch brothers’ coalition: Americans for Prosperity, the American Energy Alliance, Concerned Veterans for America, the Freedom Partners Chamber of Commerce, Generation Opportunity and the 60 Plus Association.

Their prominence has led to denunciations by Democrats, and praise from Republicans, as they’ve bombarded incumbent lawmakers with negative ads and exulted conservative challengers. No other right-leaning coalition has been as active.

Even the two main big-money committees co-founded by GOP strategist Karl Rove — American Crossroads and Crossroads GPS — have only aired about half as many ads to date as these six Koch-connected groups. 

In all, Americans for Prosperity, the Koch brothers’ flagship political operation, alone has aired more than 27,000 ads in a combined nine battleground states — accounting for about one out of every 16 ads across all Senate races, according to Kantar Media/CMAG.

Koch-connected groups reportedly intend to spend $290 million to help Republicans make gains in Congress this November. Thus far, Kantar Media/CMAG spending estimates indicate the groups have invested at least $14.5 million. This amount is undeniably a conservative estimate, as it includes only TV ad buys — not production costs or expenditures related to radio ads, online ads, direct mail, canvassers or other activities.

These so-called “dark money” nonprofit groups are not required to disclose their funders to federal election regulators, unlike candidates, parties, political action committees and super PACs.

And although election-related advocacy can’t be the “primary purpose” of these groups, they’ve nonetheless established themselves among the nation’s most powerful political forces.

In Alaska, the Koch-backed Freedom Partners Chamber of Commerce has accused Democratic Sen. Mark Begich of “standing with insurance companies” by supporting President Barack Obama’s health care reform law.

Meanwhile, Generation Opportunity, a Koch group focused on millennials, has argued Democratic Sens. Mark Udall of Colorado and Kay Hagan of North Carolina, are “forcing” young adults to “buy health insurance.”

And Democrat Gary Peters has been slammed by Americans for Prosperity for supporting Obamacare, which the group contended was “making things worse” for Michigan families.

The top six Koch-connected nonprofits have hammered Democratic Senate candidates on an ever-expanding geographic field.

Through the end of August, this spending spree has included about 8,600 ads in North Carolina, 6,900 ads in Louisiana, 5,800 ads in Iowa, 4,900 ads in Michigan, 4,700 ads in Arkansas, 4,600 ads in Colorado, 3,600 ads in Alaska and 2,400 ads in Oregon, according to a Center for Public Integrity review of Kantar Media/CMAG data.

Democrats have responded in kind, using secretive nonprofit vehicles of their own. They’re led by big-spending Patriot Majority USA, a “social welfare” nonprofit run by a close ally of Senate Majority Leader Harry Reid, D-Nev. — a preeminent Koch brothers naysayer who even maintains an anti-Koch page on his official Senate website.

Bill Allison, editorial director of the Sunlight Foundation, which advocates for transparency in government and tracks political advertising, said the Koch network is trying to make the Democratic candidates “unacceptable to voters before Labor Day.”

Allison continued: “You only get one chance to make a first impression.”

When TV viewers see these ads, said Louisiana State University political science professor Johanna Dunaway, they may not yet be “primed enough to recognize” the names or agendas of these conservative groups.

Her own research has found that “ads sponsored by unknown interest groups are more persuasive than those sponsored by candidates or known interest groups.”

These groups’ names sound “benign and credible,” said Dunaway.

“There’s a real advantage to defining your candidate positively and your opponent negatively as early as possible,” added Chris Mann, a political science professor at Louisiana State University.

Ads from non-candidate groups, Mann continued, can help “offset the incumbent advantage.”

In more than a dozen states, the Democratic Party finds itself on the defensive, as Republicans seek to wrest control of the U.S. Senate away from them.

To do so, the GOP must pick up six seats from Democrats, whose candidates, generally, have amassed a financial advantage and whose allies have fought back with TV advertisements of their own.

As of mid-summer, the five incumbent Democratic senators in the most contested re-election races had collectively raised more than $60 million, according to federal campaign finance filings. Their GOP opponents had collectively raised about $30 million.

The most prolific of these fundraisers was Hagan of North Carolina, who, as of the end of June, had raised nearly $17 million — about three-and-a-half times the amount raised by her GOP opponent, Thom Tillis.

Meanwhile, both Udall of Colorado and Alaska’s Begich had each raised between double and triple the amounts of their Republican rivals.

As of June 30, Udall had raised nearly $14 million, compared to about $5 million raised by Republican Cory Gardner.

And Begich had collected roughly $8 million as of July 30, compared to about $4 million by Republican Dan Sullivan, who won a contested GOP Senate primary in late August.

Koch-linked outside groups have helped Republicans cultivate support — in a profound manner.

In an interview with C-SPAN last month, Tim Phillips, the president of Americans for Prosperity, acknowledged that “it’s very difficult to beat a sitting United States senator."

"The incumbent Democrat senators who are up, their only chance is to make this about personalities or politics,” he continued. “If it's on the issues or their performance, they're probably goners."

In these battleground states, many Republicans are grateful for the outside assistance.

Kermit Parks, chairman of Union County Republican Party in Arkansas, called the anti-Obamacare ads from Americans for Prosperity that criticize incumbent Democratic Sen. Mark Pryor “money well spent.”

Steve Lux, chairman of the Saline County Republican Party in Arkansas, agrees.

“Obviously everybody says they hate negative ads, but they do have an effect,” Lux said.

Democrats, though, remain defiant.

“Sen. Pryor has withstood this unprecedented onslaught and remains in a good position to win this race,” campaign spokesman Erik Dorey said.

These big-money conservative groups, Dorey added, “don’t have Arkansans’ best interests at heart.”

  

Screenshot from an ad produced by Americans for Prosperity targeting Democratic Sen. Mark Udall of Colorado. Udall is running for re-election against Republican Rep. Cory Gardner.Michael Beckelhttp://www.publicintegrity.org/authors/michael-beckelhttp://www.publicintegrity.org/2014/09/04/15459/gop-s-senate-hopes-energized-koch-network-ad-blitz

Center seeks postgraduate journalists of color for new fellowship

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The Center for Public Integrity is hiring — and we’re looking for ambitious postgraduates for a new, year-long investigative journalism fellowship.

Made possible by the W.K. Kellogg Foundation, the fellow will work with our Pulitzer Prize-winning environment and labor team to focus on issues disproportionately affecting communities of color across the country.

The fellow will help produce powerful, character-driven investigative stories that highlight regulatory lapses and corporate misconduct across the country that threaten public health and the natural environment, especially in minority communities.

The fellowship is part of a multi-year initiative to enhance diversity at the Center and develop a pipeline of journalists of color with deep investigative reporting skills.

The W.K. Kellogg Foundation grant of $600,000 over three years is part of the Center’s ten-year goal to have the newsroom better approximate — and more consistently cover — the growing diversity of America.

The fellowship posting for candidates with full details can be found here. Application deadline is October 3, 2014.

The Center is one of the oldest and largest nonpartisan, nonprofit investigative news organizations and seeks to increase diversity both within the organization and in the broader field of journalism. The Center for Public Integrity is a leader in the sector of investigative journalism, with a strong role in preparing young investigative journalists.

William Grayhttp://www.publicintegrity.org/authors/william-grayhttp://www.publicintegrity.org/2014/09/04/15464/center-seeks-postgraduate-journalists-color-new-fellowship

FEC not 'Ready for Warren'

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Ditch you name — or else, federal election regulators are telling an upstart super PAC that's urging Sen. Elizabeth Warren, D-Mass., to seek the presidency.

In a letter Sunday, the Federal Election Commission explained to Chicago-based "Ready for Warren PAC" that only committees authorized by a federal political candidate may use the candidate's name.

If not — and Ready for Warren PAC isn't — "you must amend your statement of organization to change the name of your political committee so that it does not include the candidate's name and/or provide further clarification regarding the nature of your committee," FEC campaign finance analyst Romy Adame-Wilson told the super PAC.

Failure to comply with the law may "result in an enforcement action against the committee" or an audit, the FEC wrote in its letter.

The Ready for Warren PAC officially formed Aug. 7. Erica Sagrans, Ready for Warren PAC's treasurer, confirmed that "the goal of our campaign is to draft Elizabeth Warren to run for president in 2016." 

Sagrans noted that candidate draft committees aren't subject to federal political committee naming rules and, by law, may use a federal candidate's name as part of its own.

Federal rules also note, however, that draft committees may use a candidate's name "provided the committee's name clearly indicates that it is a draft committee."

Sagrans declined to comment on whether she believes the name “Ready for Warren PAC” adequately indicates it's a draft committee.

Warren has repeatedly said she won't run for president in 2016, and last month, her election attorney, Marc Elias, disavowed the Ready for Warren effort in a statement to the FEC.

The FEC asking Ready for Warren PAC to change its name is only the latest in a string of similar demands.

PACs ostensibly incorporating the names of Senate Majority Leader Harry Reid, D-Nev.; Sen. Rand Paul, R-Ky.; and House Minority Leader Nancy Pelosi, D-Calif., rank among the FEC's other recent targets.

But Ready for Hillary, a nearly two-year-old hybrid PAC that's raised millions of dollars to urge former Secretary of State Hillary Clinton to run for president, doesn't violate federal political committee naming rules because Clinton isn't yet an active federal candidate.

The FEC gives Ready for Warren PAC until Oct. 14 to respond to its letter.

Since the super PAC is so new, it has yet to reveal who has donated to the committee, or how the committee has spent any money it's raised. It will be required to file such a disclosure next month.

Warren won her U.S. Senate office in 2012, defeating then-Sen. Scott Brown, R-Mass., who's now attempting to win a U.S. Senate seat in New Hampshire.

 

 

Sen. Elizabeth Warren, D-Mass.Dave Levinthalhttp://www.publicintegrity.org/authors/dave-levinthalhttp://www.publicintegrity.org/2014/09/08/15481/fec-not-ready-warren

In New Hampshire, quixotic super PAC shaking up Republican primary

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In little New Hampshire’s big money U.S. Senate primary, Republican Jim Rubens should be an afterthought at best.

This former New Hampshire state senator, after all, hasn’t occupied elected office since the late 1990s. He then lost a bid for governor. And he couldn’t even win back his old state Senate seat in 2000.

But when a quixotic, out-of-state super PAC with a million-plus bucks to burn suddenly backs you, the atmospherics change.

“I would not have a chance without the super PAC,” Rubens acknowledged. “Now I do.”

Mayday PAC is, paradoxically, an anti-super PAC super PAC that pumps serious cash into campaigns of candidates like Rubens who'd like to see super PACs disappear altogether.

Prior to Mayday PAC’s involvement, a poll by the University of New Hampshire Survey Center and television station WMUR-TV indicating four in five voters statewide had no opinion of Rubens, one way or another.

“This is exactly why we’re in there — to effect change and change how he’s doing,” said Larry Lessig, the Harvard Law School professor who founded Mayday PAC: “We’re optimistic we’re going to be effective.”

To be sure: A Rubens victory today would be outrageous, even for a state known for its rebellious streak — voters memorably picked commentator Pat Buchanan over standard-bearing Sen. Bob Dole during the 1996 Republican presidential primary — during a year when a GOP luminary like House Majority Leader Eric Cantor fell in a primary to a little-known challenger. 

Scott Brown, the former senator from Massachusetts who lost his seat in 2012, is expected to win the New Hampshire's GOP primary.

Funded by thousands of small-dollar donations, Mayday PAC’s more than $1.6 million investment in Rubens ahead of today’s primary nevertheless illustrates how a lone special interest group can scramble a critical Senate race in the post-Citizens United v. Federal Election Commission era of increasingly deregulated political money and campaign finance exotica, like “dark money” committees and “mommyPACs.”

And it’s distracting Brown from a full, general election pivot toward Sen. Jeanne Shaheen, the moneyed Democratic incumbent. That’s hardly ideal for Republicans desperate for a New Hampshire victory in their bid to pick up six seats nationwide and control a Senate majority.

To wit: Brown campaign manager Colin Reed this weekend fired a cease-and-desist letter to Lessig, accusing his super PAC of, among other misdeeds, “hypocrisy,” “falsehoods,” violating Harvard University’s honor code and propagating the “flat-out lie” that Brown was a lobbyist. It promised to leave “all our legal options on the table.”

In response, Lessig wrote on his blog, in quoting Dirty Harry: “Go ahead. Make my day.”

Brown campaign spokeswoman Elizabeth Guyton declined to comment, instead referring to a campaign press release that focuses on Shaheen, in part criticizing her for running a campaign of “tightly-controlled events with limited interactions with the media or members of the public” and relying on “outside, third-party groups” to buoy her candidacy.

No matter for Democratic interest groups, which are reveling in the Republicans’ intramural scrap and using it to sling millions of dollars worth of negative ads at Brown, even before the general election officially begins. Shaheen, although generally popular in a state that’s both elected her governor and senator, is nonetheless dogged by President Barack Obama’s unpopularity, and her backers are using all the time they have to buttress her re-election bid.

Two groups have each already spent more than $1 million attacking Brown: liberal super PAC Senate Majority PAC and NextGen Climate Action Committee, a super PAC run by billionaire environmental activist Tom Steyer. The League of Conservation Voters’ election arm has spent almost $400,000 to do the same. And the Democratic Senatorial Campaign Committee just launched a multimillion-dollar ad blitz blasting Brown’s record during his brief U.S. Senate stint.

Such spending is part of nearly $6.5 million worth of overt candidate advocacy by political committees and nonprofits in New Hampshire’s Senate race.

Almost all of the organizations spending money — including the pro-Brown U.S. Chamber of Commerce and super PAC Ending Spending Action Fund, formed by TD Ameritrade founder Joe Ricketts— are based in states other than New Hampshire. Mayday PAC is headquartered in Austin, Texas.

Shaheen’s campaign itself, at last count Aug. 20, had nearly four times more cash on hand than Brown’s campaign, $4.27 million to $1.19 million, according to Federal Election Commission filings.

“If Brown doesn’t come out of the primary with a fairly resounding victory, that doesn’t look good for him going forward,” said Norma Love, who recently retired as the Associated Press’ New Hampshire political reporter after more than three decades. “There’s a lot at stake for him Tuesday.”

For voters in this state of about 1.32 million people — only eight U.S. states have a smaller population — the Senate spending spree translates into a deluge of messaging that rivals presidential election season, when New Hampshire hosts first-in-the-nation party primaries.

Statewide, New Hampshire has but a single, network-affiliated television station in WMUR-TV.

No matter: Granite Staters have seen nearly 4,500 U.S. Senate-related ads this election cycle through Aug. 25, according to a Center for Public Integrity analysis of data compiled by Kantar Media/CMAG, an ad tracking service.

That number figures to be hundreds, if not thousands more by the time residents take to the polls today, particularly since pro-Rubens Mayday PAC has run all of its ads during the Republican primary’s final days.

News programs, perhaps not surprisingly, are the most popular advertising platforms among most large political groups, as well as the Brown and Shaheen campaigns.

After that, light entertainment rules: Candidates and non-candidate groups have combined to air 179 ads on game show Who Wants to be a Millionaire.

That includes 24 from Senate Majority PAC, a super PAC that supports Democrats, and 23 from Koch brothers-backed Americans for Prosperity, which names candidates in the race but doesn’t directly advocate for or against them — a practice that allows it to avoid disclosing its ad spending to the FEC. Americans for Prosperity may also use “dark money” to fuel its ads, since as a nonprofit, it isn’t compelled by law to reveal its donors.

Morning gabfest Live! With Kelly and Michael has attracted 175 ads in New Hampshire’s Senate race, Jimmy Kimmel Live 149 and the Ellen DeGeneres Show 138.

Ellen, it turns out, is an Americans for Prosperity favorite, with the group so far running 40 ads during the daytime gabfest — more than the Shaheen or Brown campaign or any other non-candidate group.

New Hampshire’s Senate race, with all its spending, could have been wildly different.

It’s massive departure from 2012 re-election bid in Massachusetts, as then, Brown cast himself as a novel kind of campaign finance reformer. He signed a “people’s pledge” pact with opponent and Democrat Elizabeth Warren with the goal — largely successful — of shooing non-candidate groups from the race.

No such pledge materialized between Brown and Shaheen, despite Shaheen’s call in March for him to sign one commensurate with his 2012 pledge. Brown called Shaheen’s ask “self-serving,” noting she was off on a fundraising trip in California. And national Republicans argued that liberal outside groups had already spent significant money in New Hampshire before Brown even declared his candidacy.

The lack of a “people’s pledge,” curiously, allowed campaign finance reform-touting Mayday PAC to become Rubens’ political lifeline — however tenuous — and make political money one of the race’s focal points alongside health care, taxes, jobs and the economy.

But the campaign’s big-money turn isn’t a boon for all candidates. Ask former U.S. Sen. Bob Smith, who’s also competing in Tuesday’s GOP primary.

Despite serving New Hampshire in Congress for nearly two decades, including two terms in the U.S. Senate, his latest political comeback — he ran for U.S. Senate in Florida during 2004 and 2010 — has floundered, his campaign cash starved and seemingly chaotic. It’s certainly a mere shadow of the professionalized outfit backing him in 2002, when he lost his seat in a Republican primary to eventual Sen. John E. Sununu.

For example, after Smith’s campaign chided media outlets last week for ignoring a concert event it hosted — “the media was missed,” said media adviser said Di Lothrop — Smith and his campaign refused over several subsequent days to comment about the race.

Super PACs and nonprofits are largely shunning Smith, too. Only a pair of tea party-aligned groups have combined to spend less than $29,000 to directly back the former lawmaker, doing so with online ads and some supportive phone calls. Compare that to Senate races in Kentucky and Mississippi, for example, where tea party groups shoveled millions into the ultimately losing primary bids by very conservative candidates.

The manner in which politics is waged, even in a state like New Hampshire where voters put a premium on retail politicking, appears to have passed Smith by.

“This is the first Senate race ever where we’ve seen a significant amount of super PAC money, ‘dark money,’ all of the above,” said Dante Scala, a University of New Hampshire political science professor. “This is how it works now.”

As far as Rubens is concerned, there’s nothing wrong with using this system to point out flaws in it.

“I appreciate the super PAC support,” he said. “It helps be show that this country’s problems won’t be solved until we replace our corrupted political money system.”

Republicans seeking their party's nomination in next week's New Hampshire primary, from left, former U.S. Sen. Bob Smith, former state Sen. Jim Rubens and former U.S. Sen. Scott Brown greet each other before a debate on Thursday Sept. 4, 2014.Dave Levinthalhttp://www.publicintegrity.org/authors/dave-levinthalhttp://www.publicintegrity.org/2014/09/09/15480/new-hampshire-quixotic-super-pac-shaking-republican-primary

Homeowners steamrolled as Florida courts clear foreclosure backlog

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Florida Circuit Court Judge Diana Lewis was in a hurry. She had 93 foreclosure cases before her in the next two hours and she made it clear that she wasn’t going to let anything slow them down.

“This is a 2009 case. You’ve had years to negotiate,” she told one lawyer trying to delay a foreclosure judgment because his client and the lender were working out a deal.

Later, she agreed to an extension on a foreclosure sale but admonished the defense lawyer. “I’ll give you 30 days. That’s it. Don’t come back. I don’t want to see your face back here.”

At least twice that morning at the Palm Beach County Courthouse she refused to delay foreclosure trials in cases where the banks and homeowners together requested extra time.

Lewis’ manner may be brusque, but her actions aren’t unusual among foreclosure judges in Florida, who in the last year have been working under explicit directions from the state Legislature and Supreme Court to get rid of old cases and clear the court dockets, largely by awarding tens of thousands of homes to banks.

“The state’s entire court system has been compromised,” says Matt Weidner, an outspoken foreclosure defense lawyer who practices in Tampa and St. Petersburg and blogs about the system. “They’re stripping away private property rights and transferring billions of dollars in assets from individuals to large entities.”

A year into its latest effort to clear the wreckage left from the housing crash and subsequent recession that left hundreds of thousands of Floridians facing foreclosure, the state’s so-called foreclosure initiative is laser-focused on clearing the court system of cases and cutting the time it takes a bank to foreclose.

What began as an effort by the Florida Legislature and judicial leaders to help the state’s economy by moving properties out of foreclosure and back into the market has turned into a Kafkaesque nightmare for people struggling to hang on to their homes.

State legislative and judicial leaders have largely ignored the ramifications of throwing thousands of families out of houses and turning the foreclosed properties over to banks and mortgage servicers to maintain and sell into an already swamped market.

“They dealt with it as a court system problem,” said Mike Fasano, a former Republican lawmaker from New Port Richey who opposed the two bills passed last year to clear the foreclosure backlog. “It was, ‘How can we speed up forcing people out of their homes?’ ”

Kathleen Passidomo, a Republican from Naples who sponsored a bill to streamline foreclosures that passed last year, said borrowers, banks and homeowner associations want to get the foreclosures behind them.

“Lots of people just want to get it over with and get on with their life,” she said.

To accomplish its goal of eliminating the backlog of foreclosures, the state has set up a parallel legal system in which judges hear only foreclosure cases — often more than a hundred motions a day — in courtrooms set up solely for that purpose, under rules that differ from those that guide civil law in other types of cases in Florida and across the country.

The state set an express goal of disposing of 256,000 cases in each of the three years of the effort.  

Homeowners and the lawyers that advocate for them say they aren’t getting a fair hearing in a legal system tilted toward banks from start to finish.

“They just slam the defendants,” said Margery Golant, a lawyer in Palm Beach and Broward counties. “They deny them their rights, have hearings in absentia and just flush them down the garbage disposal.”

‘How can this happen?’

Ricardo Lopez could barely contain his fury as he walked from the St. Petersburg courtroom in late July after Judge Karl Grube for the second time in five months set a date to sell his family home.

“How can this happen? He didn’t even listen to you. This is a total fraud!” the 12-year St. Pete police officer fumed as he paced around Weidner, his lawyer, in the courthouse hallway while his wife sat rigidly behind sunglasses on a nearby bench and his two small kids’ wide eyes took in the scene.

“I could go in and arrest that lawyer. I can call the economic crimes unit right now,” he offered, brandishing his cell phone.

Lopez got to this point because he was injured in 2009, missed two months of work and got behind on his payments to JPMorgan Chase. As he recovered and began paying, he says, the bank allocated the money to his past due debt, late fees and other charges. He tried to send something extra each month, but no matter what, he remained more than 90 days late.

“It was never an issue of can we afford the house,” he said. “They wouldn’t make anything current. It was constantly past due.”

Finally, he stopped paying, and asked for a loan modification. JPMorgan foreclosed.

At the trial in March, Weidner argued that JPMorgan couldn’t foreclose because it didn’t have an original promissory note, the only original document required in a foreclosure trial.  

Whoever has a promissory note can demand payment. So if JPMorgan didn’t have Lopez’s note, maybe someone else did.

JPMorgan’s lawyer claimed she had the original note, then realized it was a copy, according to the trial transcript. She then told the judge the bank had lost the note. Then she changed her mind again and announced she had found it.

The document she produced wasn’t the original, Lopez said. His signature was in black ink, while it was blue on every other document, and the paper was a different size.

Grube disregarded the discrepancies and allowed the document into evidence.

“So we’re making a factual determination that this is, in fact, the original?” Weidner asked.

“Overruled, sir,” Grube responded.

Weidner also argued that new federal regulations barred JPMorgan from foreclosing because Lopez had asked for a loan modification. Grube said the rules may not apply in Florida.

“This is a federal regulation,” the judge said. “Whether or not it applies to this court, being a state court as opposed to a federal court, is a question.”

He said that he as a state judge might not have the authority to enforce the federal regulations.

Lynn Drysdale of Jacksonville Area Legal Aid said she and many other lawyers have reported such incidents to the federal Consumer Financial Protection Bureau but the agency declined to comment.

What’s lost in the technicalities is the fact that Grube was deciding whether Lopez, his wife Christine and their two young children would be kicked out of the home they have lived in for more than 12 years.

The police officer was willing to pay the principal and interest due on his mortgage, but now, five years later, with all the added fees, he’s so far behind he can’t catch up. He’s made six requests for loan modifications since April 2010, according to the piles of records he keeps on the case.

Grube was unmoved. He ruled for the bank in April and scheduled the Lopez home for sale on Sept. 3.

Two days after the trial Lopez got a letter from a company called Bayview Loan Servicing saying it now owned the loan. JPMorgan had sold it a full month before the foreclosure trial to the U.S. office of Housing and Urban Development, which in turn sold it to Bayview.

So JPMorgan foreclosed on a mortgage that it didn’t own. JPMorgan spokesman Jason Lobo declined to comment because the loan was transferred to Bayview.

Lopez went back to court on July 29, armed with the Bayview letter, document experts and the notary from the 2008 loan closing to ask Grube to retry the case. The judge refused. Lopez’s case had been pending since 2010 and Grube made it clear in several hearings that day that he was looking to get aging cases resolved. He signed a second, conflicting, order to sell the house on Sept. 29.

Lopez contacted Bayview, which agreed to consider a loan modification. The two parties went to court on August 28 to ask that the sale be canceled and circuit judge Thomas Minkoff agreed.  Judge Grube stepped in however, and reversed that decision, and reinstated the original sale date of Sept. 3.

The day before the sale, Lopez went back to Minkoff and got the sale order reversed.

Settlement funds used to speed foreclosures

Grube was working under explicit orders to get rid of old foreclosure cases. Florida’s so-called foreclosure initiative was launched in July 2013, when the state Legislature and budget commission together allocated $36 million of the $334 million the state won when it settled previous allegations of foreclosure fraud against the five biggest banks. It was part of a 49-state settlement.

The money was allocated specifically to “expedite foreclosure cases through the judicial process.”

The state Supreme Court set a target of disposing of 256,000 foreclosure cases each year for three years. That works out to about 700 cases per day — if everyone works weekends and vacation days. The courts have hired retired judges solely to hear foreclosures and case managers to move cases forward. These clerks and judges schedule hearings and trials even if the parties don’t want them.

“I often feel like the biggest adversary is not the bank or its counsel, but the judge, the court system,” said Mark Stopa, who practices foreclosure defense in Orlando. “When the court is moving cases along so quickly, the court is saying, ‘Hey banks, come to court. Get your justice.’ ”

In Miami-Dade County, Chief Administrative Judge Jennifer Bailey has issued a series of policies designed to get pending cases to trial and judgment.

One requires judges to deem any pending motion abandoned if it hasn’t been acted upon in 60 days, and then schedule a trial. The result: A bank can ignore a legitimate defense motion, and it will disappear.

In a series of internal emails obtained by the Center, Bailey has begged circuit judges not to continue cases that should be in the hands of senior judges, urged them to reject hearing requests, and suggested that legal maneuvers are delay tactics.

“Please oh please do not continue these cases. For those of you who have been continuing cases, please stop and at least come talk to those of us working on the project to let us know what the problem is,” she said in one email.

In another, with the subject line “Danger! Danger!” Bailey warned that lawyers are trying to delay cases by going to circuit judges rather than foreclosure-only senior judges.

“This end run is happening ALL THE TIME. Any weakness is exploited. Please help us stop this abuse of process,” she wrote. She did not respond to an email request for an interview.

Lewis in Palm Beach lost her retention election on August 26, perhaps due to her actions in foreclosure cases.  The Sun Sentinel newspaper, based in Ft. Lauderdale, said when it endorsed her opponent that “Lewis’ reputation for rudeness stopped being a forgivable quirk and became an embarrassment to the judiciary.”

But senior judges like Grube cannot be voted off the bench because they are there only as temporary appointees to hear foreclosures.  

“These judges are qualitatively different than elected judges who must face voters,” Weidner said. 

Foreclosure ‘rocket docket’

It’s not the first time Florida’s courts have tried to speed up foreclosures. In fiscal 2010-2011, the state spent $9.6 million to hire senior judges and clerks to push through foreclosures in what became known as “rocket dockets.” The state cleared 250,000 cases that year. When that money ran out, the “rocket dockets” went away.

In the first three months of the latest push, the clearance rate of foreclosure cases — a ratio of cases closed to new cases filed — jumped in every district. In the 17th Judicial Circuit, for example, the clearance rate rose to 405 percent from 148 percent in the prior three months.

One judge in Broward County, Sandra Perlman, closed 786 cases in a single day, according to data collected by the state.

Overall, Florida judges disposed of 193,922 foreclosure cases in the first nine months. The overwhelming majority of those were judgments against homeowners.

In statements from the bench and other public forums, judge after judge has made it clear that speed is their priority. The rights of homeowners come, at best, second.

“We're under a mandate from court administration, Supreme Court, to get the older cases out. Because we might lose funding for that,” Lewis, the judge in a hurry, told the Sun-Sentinel newspaper in August.

Judge Terence Perkins, chief judge of the 7th Judicial Circuit, which includes Daytona Beach, congratulated his colleagues in a spring 2014 newsletter on their progress eliminating foreclosure cases.

“Last year, we challenged each other to roll up our collective sleeves and dispose of these cases,” the chief judge wrote. “We knew that the rest of the branch and our fellow trial judges were ALL watching and we were told our political credibility hung in the balance.”

Most foreclosures uncontested

However, Judge Robert Roundtree, chief judge of the 8th Judicial Circuit, which spans six counties in north central Florida, said homeowners are getting a fair hearing in his district.

“No cases ever close without having the defendant being able to pursue their cases,” he said.

He said the courts are obligated to ensure cases don’t drag on too long. And the state Supreme Court has guidelines as to how long it should take for a case to conclude.

“If a lawsuit’s been filed, people need closure,” Roundtree said.

To be sure, most pending cases involve homeowners who cannot pay and aren’t fighting the foreclosure. Many have already moved out of their homes.

“Most of the time in my experience it really was that the debtor, oftentimes through no fault of their own, they owed the money,” said Magistrate Paul Silverman, who hears foreclosure cases in Alachua County. “I’ve never had anyone walk in to a foreclosure who said, ‘Judge, the bank is wrong. I’ve made my payments.’ ”

It remains a mystery why state officials determined that a bunch of foreclosure files sitting on the court dockets amounted to an emergency.

If banks wanted to pursue their foreclosures they were free to do so. And Florida judges are empowered to dismiss cases if the parties don’t take action for a year.

But banks and loan servicers don’t have a great incentive to take ownership of a home, and the maintenance costs and liability risk that goes with it, in a stagnant real estate market.

However, in 2012 and 2013, a series of policy changes from the Federal Housing Finance Administration and from Fannie Mae and Freddie Mac provided some motivation to speed the process.

FHFA oversees Fannie and Freddie, the two housing finance giants that buy most mortgages from banks to bundle into securities and sell on the secondary market. The agencies, which charge fees to lenders to buy and guarantee the loans, together are the center of power in the mortgage market.

In September 2012, the FHFA proposed new fees that would increase the costs of mortgages in Florida and four other states because it takes so long in those places to foreclose.

The proposal was withdrawn after enormous opposition, including from Florida’s chief financial officer, Jeff Atwater, who said in a comment letter to FHFA the plan would “raise the lifetime cost of mortgages by potentially thousands of dollars.”

“This consequence is especially troublesome for Florida, where the housing and construction sectors have suffered enormous losses in recent years,” Atwater said in the letter.

In June 2013, Freddie Mac issued new guidelines that encouraged loan servicers to “use the bulk trial foreclosure method” in Florida by which the servicer schedules numerous foreclosure cases for the same court session to clear out the backlog of cases, and offered a direct financial reward for doing so.

The company offered to reimburse servicers $1,750 for their legal fees for each case and pointed out that quick resolutions to cases would reduce the $30-per-day fee it charges for delayed foreclosures.

Freddie Mac spokesman Brad German said the guidelines are designed to prevent abandoned homes from languishing in limbo, and to save money for taxpayers, who are currently footing the bill for the agency because it’s operating under government conservatorship.

Fannie Mae has similar fees for delays beyond 660 days to foreclose and sell a home in Florida. The company includes “Florida Bulk Trials” as an expense category in its servicer guidelines, according to notices on its website.

And early this year, the FHFA dropped a $5.95 a month per loan fee to lenders in most states but left it in place in Florida because of the state’s slow foreclosure process.  

Backlog and bad paperwork

In launching the foreclosure initiative, state court officials laid blame for the backlog of cases squarely in the laps of mortgage lenders, saying they weren’t pursuing cases and they often didn’t have the proper paperwork to prove they had the right to foreclose.

Florida was a center of the financial crisis that started slowly in 2007 with house prices stalling and homeowners falling behind on their payments. The crisis spread across the rest of the country in 2008, when Lehman Brothers Holdings Inc. went bankrupt, setting off a cascade of giant bank failures and leading the government to bail out the entire financial system.

As residents fell behind, banks filed thousands of foreclosure complaints in Florida courthouses then let them languish as stagnant court files. When they did have hearings or trials, the lenders often couldn’t come up with the proper paperwork to prove they were the owners of the loan.

That paperwork mess, and indeed the entire financial crisis, was the direct result of creative investors’ turning mortgage debt into a tradable commodity. Mortgages were placed in pools and securitized. Very often the deeds to the homes, promissory notes or other key mortgage documents, got lost.

When the market collapsed and homeowners stopped paying, many banks couldn’t come up with the records they needed to prove they had a right to foreclose.

“They were rushing around so much to securitize that the paperwork they were supposed to keep was never kept,” said Thomas Ice, a Palm Beach County lawyer.

Banks and their lawyers turned to so-called robo-signers, employees whose sole job was to sign fraudulent documents the banks created to establish a paper trail to allow them to foreclose. Some of these people signed thousands of documents a day.

When the massive fraud was revealed, the Justice Department and 49 states sued the five largest mortgage servicers, Bank of America, JPMorgan Chase, Ally Financial (formerly GMAC), Citigroup, and Wells Fargo.

That was the case that led to the massive settlement that now is helping those same banks speed up their foreclosures on Florida’s homeowners.

“The robo-signing scandal was all about banks cutting corners and getting hand-slapped,” Ice said. “The money is being used to get them what they wanted anyway.”

Even though it was the banks that came to the courts with forged documents, it’s almost impossible to find an example of a Florida judge ruling against a bank and granting a home to a family.

“That doesn’t occur very often,” said Kris Slayden, who oversees foreclosures for the Office of the State Courts Administrator. “That’s why those cases make news.”

While robo-signers have largely disappeared, judges are now allowing so-called robo-testifiers to appear in their courtrooms to attest to the validity of the documents the banks are using to justify foreclosures.

Many “robo-testifiers” never worked in the bank departments for which they’re testifying. Some never worked for the banks at all before being hired and trained in what to say on the witness stand. Still, they travel from courtroom to courtroom explaining to judges how banks track payments and keep mortgage records.

“That goes against every rule of evidence since the beginning of time,” said Ice, the Palm Beach County foreclosure lawyer. Ice said that for someone to authenticate business records, they would normally be required to have firsthand knowledge of how a company functions.

Losing faith

Many homeowners struggling to save their homes have lost faith in Florida’s legal system, among them Carmen and David Abdo.

The Palm Beach County couple is facing simultaneous foreclosures on three homes. They got into this mess not because they couldn’t make their monthly mortgage payments, but because all three of their lenders added expensive and unnecessary insurance policies to their loans three years in a row. One of the policies cost more than $16,000.

The Abdos — David is a retired firefighter and Carmen is an interior designer — had insurance on all their houses, and informed the banks each year that they didn’t need the expensive policies. It would take months to straighten out the problem and in the meantime all three banks were charging them thousands of dollars extra each month. Then the cycle would repeat the following year.

The payment on one of their loans went from $1,800 to $2,500, to $4,800 and reached $7,800 when they finally cried uncle and stopped writing checks.

“We just couldn’t pay anymore,” said Carmen, who sat in her shop filled from floor to ceiling with vintage dining sets, second-hand ball gowns and collectibles like monkey-shaped plant holders.

Her meticulous records, punctuated with hot pink sticky notes that match the lipstick she favors, include stacks of correspondence with the lenders, copies of insurance policies and ever increasing demands for payment.

She never had a chance to show her records to a judge. In December, the Abdos went to court in Volusia County to ask Judge Raul Zambrano to rule against the bank because they never should have been charged for the unneeded insurance. Zambrano declined and scheduled a trial for the following week.

“This judge has never ruled in favor of a homeowner,” Carmen Abdo claimed, in explaining why she didn’t want to risk a trial.

Afraid they’d lose everything before an unsympathetic judge, the Abdos instead filed for bankruptcy in federal court the morning they were supposed to go to trial. Now they’re hoping a federal judge will listen to their story.

“It was horrible for us to have to do that,” Carmen said. “That’s not the kind of people we are.”

Needing banks to listen

Many believe that those who lost their homes in the financial crisis were simply greedy people who bought houses they couldn’t afford. Certainly there were many whose ambitions were bigger than their incomes and took out loans they could never pay back.

However, thousands were driven into foreclosure because of the recession — they lost their jobs, their tenants moved out, they couldn’t sell. Many others defaulted because of bank incompetence, or perhaps outright fraud. They could have made their payments, or made slightly smaller payments if the banks would have worked with them.

“Most of the cases I’ve taken on are just people who wanted someone to sit down and talk to them about a work-out,” Golant said.

Today, Carmen and David Abdo remain in limbo as their bankruptcy petition winds its way through federal court.

And Ricardo Lopez is racing the calendar while negotiating with Bayview mortgage in hopes of keeping his home.  There’s still an order in the St. Petersburg courthouse to sell his home on Sept. 29.

A foreclosed home on Pine Island in Lee County, Fla., in November of 2010.  Alison Fitzgeraldhttp://www.publicintegrity.org/authors/alison-fitzgeraldhttp://www.publicintegrity.org/2014/09/10/15463/homeowners-steamrolled-florida-courts-clear-foreclosure-backlog

Mitch McConnell revs ad machine

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Don’t believe for a bluegrass minute that Senate Minority Leader Mitch McConnell, R-Ky., is taking his challenge from Democrat Alison Lundergan Grimes lightly.

During the week following Labor Day, McConnell’s campaign aired, on average, one TV ad every five minutes — about 2,200 ads in all, according to a Center for Public Integrity review of data provided by Kantar Media/CMAG, an advertising tracking service.

That’s roughly twice as many ads as Grimes’ campaign aired during the same period and more than any U.S. Senate candidate nationwide.

But for Republicans, Kentucky’s big-money Senate contest is an anomaly during a week that saw Democrats and their allies produce more TV spots in most battleground states.

It’s the latest indication that Democrats, who have long feared being outgunned this cycle, are willing to spend whatever’s necessary to prevent the GOP from seizing the six Senate seats it needs in November to win a Senate majority.

During the week following Labor Day, Democrats and their allies aired significantly more TV ads in Alaska, Georgia, Michigan and North Carolina, according to estimates from Kantar Media/CMAG.

In Arkansas, Colorado, Iowa and Louisiana, Democrats and their allies also edged out their rivals by narrower margins, airing less than 10 percent more TV ads than conservatives in each state during the week following Labor Day.

Much of this air cover came from the Democratic Senatorial Campaign Committee, Senate Majority PAC and Vote Vets Action Fund.

These three groups that exemplify the range of political players behind the advertising barrages in battleground states this year.

The DSCC is an official arm of the Democratic Party. It discloses its funders and can only accept contributions no larger than $32,400 per donor per year.

Senate Majority PAC and Vote Vets Action Fund, however, don’t have a limit on the size of donations they may receive. As a super PAC, Senate Majority PAC discloses its donors’ name, while Vote Vets Action Fund, as a “social welfare” nonprofit organized under Sec. 501(c)(4) of the U.S. tax code, does not. Both types of groups have flourished in the wake of the U.S. Supreme Court’s Citizens United v. Federal Election Commission ruling that loosened campaign spending rules for companies.

Generally, candidates themselves may only accept $2,600 per donor per election, with a primary and general election counting as separate elections.

Super PACs are making their marks in other Senate races, too.

In Virginia, for instance, incumbent Democratic Sen. Mark Warner is favored to win re-election but is being challenged by former Republican National Committee Chairman Ed Gillespie.

But Warner’s allies aren’t taking chances, as a pro-Democratic super PAC called Virginia Progress PAC has roared to life, airing roughly 630 TV ads during the week following Labor Day — about 40 percent of all ads in the state during this period.

Virginia Progress PAC has raised about $1.7 million this year, according to Federal Election Commission filings. Its largest donor? A limited liability company called Alcantara LLC, which, as the Huffington Post first reported, is owned by tech entrepreneur Michael Saylor, who is also Warner’s close friend.

Meanwhile in New Hampshire, a quixotic super PAC that advocates for campaign finance reform failed to propel favored candidate Jim Rubens to victory in a Republican primary that former U.S. Sen. Scott Brown of Massachusetts easily won. He now faces incumbent Democratic Sen. Jeanne Shaheen in what’s likely to be a close race.

Mayday PAC argued it helped Rubens finish second and thrust campaign finance reform into the race’s spotlight. But Mayday PAC leader Lawrence Lessig acknowledged afterward, “We lost. Badly.”

According to FEC records, the super PAC spent $1.6 million overall on various messaging to do so — or about $59 per vote Rubens received. That includes 70 TV ads — about one-fifth the number of ads Brown’s campaign aired — during the week after Labor Day, according to Kantar Media/CMAG. Rubens himself did not air TV ads.

In the past week, Kansas also emerged as potential battleground state in the fight for control of the Senate.

Democrat Chad Taylor dropped out of the race on Sept. 3, a move that some observers say could boost independent Greg Orman’s chances of defeating incumbent Republican Sen. Pat Roberts.

In the week following Labor Day, Orman’s campaign aired about 450 ads, while Roberts’ campaign aired zero, according to Kantar Media/CMAG.

To date, the better-funded Roberts has aired more than 3,800 ads, while Orman has aired about 2,700, including ads during Roberts’ heated GOP primary in August.

Dave Levinthal contributed to this report.

Senate Minority Leader Mitch McConnell speaking at the 2013 Conservative Political Action Conference (CPAC) in National Harbor, Maryland. Michael Beckelhttp://www.publicintegrity.org/authors/michael-beckelhttp://www.publicintegrity.org/2014/09/11/15499/mitch-mcconnell-revs-ad-machine

Contractor, Hispanic worker deaths up in 2013, BLS says

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The number of contractors and Hispanic workers who died on the job increased in 2013 even as the overall tally of worker deaths declined, according to preliminary data released Thursday by the U.S. Bureau of Labor Statistics.

In all, 4,405 workers died from injuries sustained on the job last year — 223 fewer than the BLS reported in 2012. That equates to a rate of roughly 3.2 deaths for every 100,000 full-time equivalent workers, down slightly from 2012.

The new tranche of data came on the same day that the Occupational Safety and Health Administration released a final revised rule requiring employers to notify OSHA within eight hours if an employee dies and within 24 hours when an employee is hospitalized, suffers an amputation or loses an eye. Previously, employers were only required to report deaths and the hospitalization of three or more employees.

“Forty-four hundred five on-the-job deaths is 4,405 too many,” David Michaels, assistant secretary of labor for occupational safety and health, said on a conference call with reporters. “We can and must do better.”

According to the BLS data, the majority of workers killed on the job in 2013 — 1,740 — died in transportation accidents; 717 died via contact with objects and equipment; 699 died from falls, slips or trips; and 330 died from exposure to harmful substances or environments. Violence — either homicides or suicides — accounted for 753 deaths, or roughly one out of every six.

The data were released on the 13th anniversary of the terrorist attacks on Sept. 11, 2001, which killed 2,886 workers. The BLS will release the final 2013 fatality numbers in the spring; historically, the revised totals are higher than those reflected in the preliminary data.

While overall workplace fatalities decreased, two groups — contract workers and Hispanic workers — saw increases.

For workers classified as “Hispanic or Latino” by the BLS, the fatal injury rate in 2013 topped 3.8 per 100,000 full-time equivalent employees, 0.6 deaths higher than the national average. Seven hundred ninety-seven Hispanic workers died from job-related injuries, the highest total since 2008; 708 died in 2012.

Of the Hispanic workers who died in 2013, 527 were foreign-born, according to the BLS. Mexican-born workers accounted for 352 — or 42 percent — of the 845 fatal injuries among all foreign-born workers.

“It’s no surprise that the number remains high,” said Rebecca Smith, deputy director of the National Employment Law Project, a worker advocacy and research group. “In part, that’s a function of many Latino workers moving to more dangerous forms of employment, including construction. But also, there’s a huge overlay between the high incidents of Latinos who do [contract] work…It’s a mix of being in more dangerous work and contract work moving into more dangerous sectors. These statistics point to exactly the challenge for our country as workers move more and more into subcontracted jobs.”

The BLS data show that contract, or temporary, workers — those employed by one firm but working under the guidance of another — are dying at a faster clip since the agency began tracking the category in 2011. In 2013, 734 contractors died as a result of work-related injuries, up from 715 in 2012 and 542 in 2011. The Center for Public Integrity highlighted the plight of temporary workers in a December 2012 article about temp worker Carlos Centeno, who was fatally scalded in a Chicago factory.

“It’s a growing problem that temporary workers have injuries and fatalities higher than the rest of the population,” said Mary Vogel, executive director of the National Council on Occupational Safety and Health, a coalition of local and state worker safety groups. “That’s one reason we have to be really concerned about contract workers: they’re continually changing jobs, so they’re more apt to be exposed to hazards that they’re not trained for. That’s a big piece of the problem: they don’t get the training.”

Vogel also called for the BLS to release more detailed data on workplace fatalities, including the names of employers and the manner of death for the deceased workers. Having access to more comprehensive fatality information would help employers develop strategies to prevent workplace fatalities, she said. 

The data released Thursday show that most contractors died of injuries from falls (31 percent), being struck by an object or equipment (18 percent), as pedestrians hit by vehicles (11 percent), or through exposure to electricity (7 percent). Those four types of injuries accounted for a larger share of contractor fatalities than they did for all workers. Half of the contractors were working in construction and in oil and gas extraction when they were injured, most often as laborers, supervisors, roofers, carpenters or electricians. Others were most often employed as truck drivers, security guards or groundskeepers.

Several states, including Massachusetts and Illinois, have passed laws in recent years strengthening employer liability for temporary workers. In August, California’s legislature passed AB 1897, which would require host companies as well as staffing agencies to share responsibility for wage and safety violations. Employee advocates herald the bill, which is awaiting Gov. Jerry Brown’s signature, as a blueprint for worker protection laws around the country.

OSHA has also taken note of the increased vulnerability of contract or temporary workers. Last year, the agency launched an initiative to better protect temporary workers from injuries and sicknesses. In August OSHA released a series of recommended practices for employers, urging them to properly train temporary workers and provide them with the same protective measures and safety gear that permanent employees receive.

The final rule unveiled Thursday will help OSHA capture data for both contractors and Hispanic workers, Michaels said.

“OSHA already recognizes that non-English speaking workers, immigrant workers, are vulnerable workers and they often have the worst jobs, often are not well-trained and they don’t often know what their rights are,” he said.

By tracking serious injuries such as amputations, Michaels said, OSHA will be alerted to potentially dangerous situations before a death occurs. He said that “too often when a worker is killed or injured, we learn that one or more workers had already suffered a serious injury at the establishment.”

Workers who immigrated to the Washington, DC, region from El Salvador and Honduras install gutters and repair a roof at a house in Fairfax County, Va., in June, 2014.  Talia Bufordhttp://www.publicintegrity.org/authors/talia-bufordhttp://www.publicintegrity.org/2014/09/11/15503/contractor-hispanic-worker-deaths-2013-bls-says

Koch foundation proposal to college: Teach our curriculum, get millions

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In 2007, when the Charles Koch Foundation considered giving millions of dollars to Florida State University’s economics department, the offer came with strings attached.

First, the curriculum it funded must align with the libertarian, deregulatory economic philosophy of Charles Koch, the billionaire industrialist and Republican political bankroller.

Second, the Charles Koch Foundation would at least partially control which faculty members Florida State University hired.

And third, Bruce Benson, a prominent libertarian economic theorist and Florida State University economics department chairman, must stay on another three years as department chairman — even though he told his wife he’d step down in 2009 after one three-year term.

The Charles Koch Foundation expressed a willingness to give Florida State an extra $105,000 to keep Benson — a self-described“libertarian anarchist” who asserts that every government function he’s studied “can be, has been, or is being produced better by the private sector” — in place.

“As we all know, there are no free lunches. Everything comes with costs,” Benson at the time wrote to economics department colleagues in an internal memorandum. “They want to expose students to what they believe are vital concepts about the benefits of the market and the dangers of government failure, and they want to support and mentor students who share their views. Therefore, they are trying to convince us to hire faculty who will provide that exposure and mentoring.”

Benson concluded, “If we are not willing to hire such faculty, they are not willing to fund us.”

Such details are contained in 16 pages of previouslyunpublishedemails and memos obtained by the Center for Public Integrity.

While the documents are seven years old — and don’t reflect the Charles Koch Foundation’s current relationship with Florida State University, university officials contend — they offer rare insight into how Koch’s philanthropic operation prods academics to preach a free market gospel in exchange for cash.

In 2012 alone, private foundations controlled by Charles Koch and his brother, David Koch, combined to spread more than $12.7 million among 163 colleges and universities, with grants sometimes coming with strings attached, the Center for Public Integrity reported in March.

Florida State University ranked a distant second behind George Mason University of Virginia as a recipient of Charles Koch Foundation money. In a tax document filed with the Internal Revenue Service, the foundation described its Florida State University funding for 2012 as "general support." 

Some schools’ professors and students were aghast at the funding, arguing that such financial support wasn't widely known on their campuses and could threaten schools’ academic freedoms and independence. Others argued that colleges and universities — long bastions of liberal academics — would be well served by more libertarian courses of study.

Separately, Charles Koch is the financial force behind a “curriculum hub” for high school teachers and college professors that criticizes government and promotes free-market economic principles. He’s also funded programs for public school students, and this year, his foundation donated $25 million to the United Negro College Fund.

At Florida State University, Benson noted in a November 2007 memorandum that the Charles Koch Foundation would not just “give us money to hire anyone we want and fund any graduate student that we choose. There are constraints.”

Benson later added in the memo: “Koch cannot tell a university who to hire, but they are going to try to make sure, through contractual terms and monitoring, that people hired are [to] be consistent with ‘donor Intent.’”

A separate email from November 2007 indicates that Benson asked Charles Koch Foundation officials to review his correspondence with Florida State associates about potential Koch funding.

Trice Jacobson, a Charles Koch Foundation representative, did not respond to questions, although Benson and Florida State University spokesman Dennis Schnittker each confirmed that the emails and documents are authentic.

But Benson noted that the documents were meant for internal use and reflect the “early stages of discussion” well ahead of a 2008 funding agreement signed by the university and the foundation.

That agreement, initiated in 2009, has earned Florida State $1 million through April, according to the university. Until it was revised in 2013, an advisory board would consult with the Charles Koch Foundation to select faculty members funded by the foundation's money.

Benson also said that while he continued serving as Florida State’s economics department chairman until 2012, Charles Koch Foundation money wasn’t a factor.

While foundation initially discussed providing money to help fund Benson’s salary, “that idea was taken off the table very early in negotiations,” he said. “I continued as chair because I felt I could still make a valuable contribution to the department.”

The 2008 agreement between the school and the foundation nevertheless faced harsh criticism from some professors and students who argued it indeed gave the foundation too much power over university hiring decisions.

The school and foundation revised their agreement in 2013 “for clarity” and to emphasize the “fact that faculty hires would be consistent with departmental bylaws and university guidelines,” Schnittker said. “Our work with CKF [Charles Koch Foundation] has always upheld university standards.”

Those guidelines, spelled out in a Florida State University statement about the foundation from May, say the money will not compromise “academic integrity” or infringe on the “academic freedom of our faculty.”  

Ralph Wilson, a mathematics doctoral student and member of FSU Progress Coalition, doesn’t buy it.

Florida State University “willfully and knowingly violated the integrity of FSU by accepting funding meant only to further Koch’s free-market agenda,” said Wilson, whose student group works to “combat the corporatization of higher education.”

The Charles Koch Foundation, meanwhile, “is using our universities solely to further their own agenda and plunder the very foundations of academic freedom,” Wilson said.

At the end of 2012, the foundation reported having almost $265.7 million in assets, according to its most recent tax return filed with the Internal Revenue Service. 

In his 2007 memo to colleagues, Benson acknowledged the school’s relationship with the foundation would invite blowback.

“I guess I am trying to say that this is not an effort to transform the whole department or our curriculum,” Benson wrote. “It is an effort to add to the department in order to offer some students some options that they may not feel they have now, and to create (or more accurately, expand) a cluster of faculty with overlapping interests.”

Benson also predicted entering into an agreement with the foundation carried some risk.

“There clearly is a danger in this, of course. For instance, we might be tempted to lower our standards in order to hire people they like,” Benson wrote, in advocating that the university not do so. “We cannot expect them to be willing to give us free reign to hire anyone we might want, however, so the question becomes, can we find faculty who meet our own standards but who are also acceptable to the funding sources?”

The Koch brothers are best known not for their educational efforts but for controlling a constellation of conservative, politically active nonprofit corporations.

For example, this election cycle alone, six nonprofits connected to the Kochs have combined to air about 44,000 television ads in U.S. Senate races through late August, with the ads typically promoting Republicans or criticizing Democrats.

Dave Levinthalhttp://www.publicintegrity.org/authors/dave-levinthalhttp://www.publicintegrity.org/2014/09/12/15495/koch-foundation-proposal-college-teach-our-curriculum-get-millions

Investigating Florida's parallel legal system for foreclosures

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Defense motions that disappear after 60 days, unelected judges meant to rule on a quarter of a million cases a year, original documents gone missing — these are the realities facing families caught in a year-old initiative intended to accelerate Florida's foreclosure process. As Florida tries to clear its courts of hundreds of thousands of pending foreclosure cases, a lingering reminder of the 2008 financial meltdown, homeowners trying to save their houses feel their rights come second in a state-sponsored, breathless rush to foreclose. 

Senior Finance Reporter Alison Fitzgerald spent months investigating the underlying causes of Florida's foreclosure frenzy, and we wanted to know more about the story behind that effort.

Your investigation found a foreclosure system riddled with red flags — what in your mind is the most egregious outcome of Florida’s foreclosure initiative?

What I saw is that the initiative tilts the legal system in favor of banks. For that small fraction of homeowners who are defending their homes, they are now fighting not only banks, but also the state. When a court or judge tries to move a case forward, they are by default working on behalf of the bank which brought the case. And they are giving the banks leeway in terms of evidence they would never give to a homeowner.

I reviewed dozens of trial transcripts, talked to more lawyers than I can count and at least a half dozen homeowners fighting foreclosure and then I went down there to see for myself. It all pointed to this conclusion.

I was actually a bit skeptical about what I was hearing from the defense lawyers about how judges were pushing cases through the system. However, after spending two days sitting in different foreclosure courtrooms in two different counties, I was convinced. I saw judge after judge ruling on case after case with little more than a glance at the docket. What stunned me was how often the judges — each one I watched — would say no when a lender and homeowner would together ask for a delay of a foreclosure trial or home sale because they wanted to work out a deal. I still don't understand why a judge would rule against such a request, but it happened in every courtroom I visited.

As part of your reporting, you interviewed some of the defense lawyers working on behalf of homeowners. What lawyer willingly signs up for this kind of gig?

I wonder that myself, especially because I'm pretty sure there's not much money in foreclosure defense. These lawyers were very angry about what was happening, however.

This photo is of the lawyer who is featured at the top of the story, Matt Weidner, sitting in a courtroom waiting for a hearing. The photo shows that he’s in that courthouse, and that specific courtroom, so much that it’s a bit like his living room. What’s interesting is that he’s kicking back in the photo, but when it came time to argue for Ricardo Lopez, he was so serious, and so angry that he wasn’t being heard. 

When I was first reporting the story, [Weidner] was so passionate about the issue, and what it meant not just for his clients, but broadly about how the state was governing itself and caring for its citizens that I considered focusing the story on him. 

Are any other foreclosure court systems in the U.S. similar to Florida’s?

There are 21 states that have judicial foreclosure systems, meaning the case goes through the courts instead of through an administrative process which is much quicker. The advantage of judicial foreclosure is that there is a higher burden on a financial institution that wants to take away a person’s home. During the recent financial crisis, it became clear how many things can go wrong if it’s too easy for a bank to foreclose.

What has Florida done to speed up the foreclosure system in its courts?

There are a number of things that have happened over the years as the state has struggled to keep up. The biggest problem for the state has been that its rules of evidence require that when a lender forecloses, they must prove they have the right to the money and the home. That means they have to have an original promissory note, signed by the borrower. They must also, traditionally, document exactly what they are claiming the homeowner owes, which includes all the payments, taxes, insurance and fees over the life of the loan.

That became problematic because the banks kept buying and selling the loans, and they didn’t keep the paperwork in order. So now the courts are giving the banks a series of shortcuts to allow them to go ahead and foreclose without that paper trail.

What is the role of a “robo-testifier”?

Robo-testifiers are a key to establishing the paper trail. They attest in court that the documents the bank is offering to prove a borrower owes a certain amount of money are accurate. These could be records from previous banks showing how many payments the borrower made or missed. The issue some lawyers have is that many of these people don’t actually know firsthand how the banks work — they are on the witness stand telling a judge what their bosses told them to say. In other areas of law, evidence rules are more strict.

Can you tell us more about this photo you took in a Florida courtroom? Because at first glance, it looks like a script.

It is, honestly. This has become so routine, almost like parking court, that there are sample procedures and systems for everything. In one courtroom that I observed in Pinellas county there was a sign taped to the front of the bench that said “Foreclosure Sale: 45 days, Sept. 16, 2014.” It was like those signs in a liquor store that read: “You have to have been born before this date … to buy alcohol.” I realized they must replace that sign every morning. 

What surprised you the most?

Like many people, I was under the impression that most people in foreclosure bought expensive houses they couldn’t afford and that the problems were largely behind us.

What I learned was how many people were driven into foreclosure by their lenders, people like the Abdos who were unjustly charged thousands of dollars for insurance they didn’t need. I heard stories of people who hit hard times and asked their banks for modified payment plans, and were told they had to go into default to get help. When they followed those instructions, the banks foreclosed. There were so many crazy and sad stories.

You have another story on “zombie” foreclosures in Florida — can you give us a taste of what that piece will cover?

That story is almost the flip side of what we’ve been discussing. It looks at the problem of homes that no one wants, homes that were in foreclosure and abandoned. When foreclosures never go through, these zombies continue to haunt their owners who can’t afford to fix them and become a blight on their cities. It’s a huge problem in low-income areas of Florida and across the country.

Do you have any questions for Alison about her investigation? Please leave them in the comments below.  

Check back Monday to read Alison's piece on "zombie" foreclosures, or follow her on Twitter to get updates on her ongoing foreclosure reporting.

A sign lies on the ground in front of a foreclosed home in Homestead, Fla.Alison Fitzgeraldhttp://www.publicintegrity.org/authors/alison-fitzgeraldSarah Whitmirehttp://www.publicintegrity.org/authors/sarah-whitmirehttp://www.publicintegrity.org/2014/09/12/15505/investigating-floridas-parallel-legal-system-foreclosures

'Ready for Warren' to change name

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Under pressure from federal regulators, an upstart super PAC attempting to convince Sen. Elizabeth Warren, D-Mass., to seek the presidency has agreed to change its name.

"Ready for Warren PAC" will amend its registration paperwork and officially become the "Ready for Warren Presidential Draft Campaign," super PAC treasurer Erica Sagrans today told the Center for Public Integrity.

The switch comes after the Federal Election Committee demanded the group ditch its original name because, per federal election regulations, only committees authorized by a federal political candidate may use the candidate's name.

There's an exception, however: Draft committees may refer to an active candidate in its organization's own name "provided the committee's name clearly indicates that it is a draft committee."

Sagrans noted that "we'll still call ourselves Ready for Warren in most of our communications, but we want to comply with what [the FEC] is asking, and we should be clear on what our intentions are." She also praised FEC officials for being "incredibly helpful" in helping her super PAC navigate federal election rules.

But does the Ready for Warren Presidential Draft Campaign agree with the rules in the first place?

After all, several other political committees that seemingly encorporate candidates' names have effectively told the FEC to takea hike, citing free speech considerations.

And Ready for Hillary, a hybrid PAC that's raised millions of dollars to promote a Hillary Clinton presidential bid may keep its name because Clinton isn't a declared political candidate.

"The law ... it is what it is," Sagrans said, offering no additional comment one way or another.

As for Warren, she's disassociated herself from any presidential draft effort and said she won't run for the White House in 2016.

 

 

Sen. Elizabeth Warren, D-Mass., speaks at a news conference on Capitol Hill in Washington, D.C., July 2013.Dave Levinthalhttp://www.publicintegrity.org/authors/dave-levinthalhttp://www.publicintegrity.org/2014/09/12/15521/ready-warren-change-name

'Zombie' homes haunt Florida neighborhoods

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Kelly Young was stunned when she got a letter in January informing her that her disability payments, those of her daughter, and their Medicare benefits were being cut off. The Social Security Administration said she lied on her application when she failed to disclose she owned a house.

As far as Young knew, she didn’t own anything. Four years earlier, Bank of America informed her it was foreclosing on her tiny yellow ranch-style house in Jacksonville, Florida, after the 45-year-old mother of three fell behind on her payments. When Young got the bank’s letter, she didn’t fight.

“They said foreclosure, so we just up and left,” said Young, sitting in the darkened living room of her rental house in a nightdress that reveals the bandages from recent heart surgery and the tubing from a dialysis port. “I’m not going to sit here and let someone put me out. I’ve never been evicted.”

The problem is, Bank of America never followed through. Now, four years later, Young struggles to pay her bills while across town her house sits empty, strewn with trash and rotting under a leaky roof, collecting fines for code violations and unpaid taxes and fees related to the delinquent mortgage.

Young went five months without any disability payments and was living off the kindness of her landlord. In May, her benefits were restored, but she’s still fighting to get her 16-year-old daughter’s disability payments restarted. The developmentally disabled teen needs medication every day and has been getting by on samples provided by public health clinics.

Young’s case is particularly harsh, but not unique.

Jacksonville’s poor neighborhoods are dotted with abandoned houses stuck in foreclosure limbo. The so-called zombie properties are often uninhabitable because they’ve fallen into disrepair, and owners are unwilling to invest in fixing them up because, with the mortgage unpaid, the bank can always come back and foreclose again.

By cherry-picking which foreclosures they complete and which they ignore, banks are saddling individual borrowers with a permanent, inescapable debt while helping to create slums in already struggling communities. The vacant homes often attract drug dealers and squatters and bring down the value of surrounding properties.

‘These houses are unsafe’

When you call the city of Jacksonville’s main phone number, the first option offered by an automated system is how to report blighted properties.

City Councilwoman Denise Lee last year established a blight subcommittee which meets every other week trying to deal with the properties and associated crime.

“These houses are unsafe. A lot of druggies come, they use the houses, they bring the property values down, [and the houses] get infested with rodents,” Lee said.

Driving around north Jacksonville, Allison Albert, a lawyer at Jacksonville Area Legal Aid who is representing Young, guides a tour of foreclosure despair. One neighborhood, ironically named Sherwood Forest after the place where the legendary Robin Hood hid out, features street after street of tiny ranch houses. On each block there are a handful of homes that are boarded up or clearly abandoned.

In front of one house is a sign spray-painted in red on a large sheet of plywood: “For Sale: $18,500 or best offer.” A storefront sign offers rent-to-own homes.

Young’s house is a tiny yellow box on a dead-end street. Old mattresses and furniture are scattered throughout the interior and the garage is strewn with trash, old shoes and Kilz paint cans.

She bought it to give her three kids some stability. She was so ill she feared she’d die while they were still young.

“I thought I was doing a good thing for my children, for my family,” Young says emphatically, punctuating the words with hand gestures. “I wanted to leave them something.”

The mortgage was $702 a month, which she could pay when times were good. But when her van died, the vehicle she uses to get to her dialysis treatments three days a week, she had to pay to fix it and couldn’t afford the mortgage.

Young doesn’t want the house back. She wants the bank to take it, and write off her debt, exactly what she thought they’d done four years ago.

Bank says no thanks

Young says she offered the bank a so-called deed in lieu — transferring the deed to the bank in exchange for writing off the debt —but the bank wouldn’t take it.

The court set the case for trial in April 2013 but sent notice to an attorney who no longer represented Bank of America. Because no one showed up in court, the judge dismissed the case. A year later, the bank successfully had the case reinstated. On August 1, it transferred the loan to another servicer, according to spokesman Richard Simon.

He attributed the long delays in Young’s case to the slow judicial foreclosure process in Florida and complications related to Young’s original lender which went out of business while under federal investigation.

He said the company took proper care of the house.

“Bank of America is committed to mitigating the potential for neighborhood blight created by abandoned properties,” he said in an email. “Our policy dictates completion of foreclosures and no charge-offs of loans on vacant properties.”

Still, Young’s little yellow house has joined the ranks of “zombies,” homes that sit abandoned for years and saddled with a pending foreclosure.

During the financial crisis, many homeowners walked away from their properties when they got their initial foreclosure notices, seeking to avoid being evicted, not realizing that the process could take years. Others would stay for a time but then move for a new job or to be closer to family.

Zombie foreclosures have become more widespread in recent years throughout the country, but are especially prevalent in Florida, where as of June 2, 48,630 homes in some stage of foreclosure sat vacant, according to RealtyTrac, a company that tracks foreclosure filings nationwide. That accounts for a third of the 141,406 vacant foreclosed properties nationwide. 

Daren Blomquist, vice President of RealtyTrac says zombie foreclosures come in two forms. The first is the unintentional byproduct of Florida’s judicial foreclosure process, which can take months and result in “properties sitting in limbo,” according to Blomquist.

The second involves an intentional delay by lenders, who file a foreclosure case so they don’t lose the option when the statute of limitations runs out, but don’t move it forward because completing the foreclosure would not be financially viable.

“This type of foreclosure is more common in Cleveland and the rust belt cities, for example, banks not wanting to foreclose because of low values and little demand for buyers,” said Blomquist.

But it's not just rust belt cities that suffer.

About a mile from Young’s house is the brown rancher owned by Phyllis Mainor.

In 2005 and 2006, Mainor took custody of her two grandchildren from her daughter, who was a drug addict. She was living on a low income and the additional children, both of whom had severe asthma, made it impossible for her to keep up the home, which contained mold. She moved out and rented the house to another couple for a year. When they moved out, she was unable to find another tenant. CitiMortgage filed a foreclosure action in July 2009.

In February, 2010, Mainor sent a three-page handwritten “hardship letter” to CitiMortgage asking for a deed in lieu of foreclosure as she was unable to fix up the property or pay the loan.

“I want to be able to continue to provide a safe and comfortable environment for my grandchildren,” she wrote to CitiMortgage. “Being able to qualify for a deed in lieu will alleviate some of the distress I have experienced during these unfortunate occurrences.”

Mainor also filed bankruptcy, and a judge discharged the debt so she is no longer liable for the payments.

Citi, in 2012, dropped the foreclosure, stating in court filings: “Plaintiff has completed review of the loan and determined that there is not enough equity to proceed with the foreclosure process.”

With that action, the bank put the home back in Mainor’s hands. She can’t afford to fix it up. And she can’t sell it or even give it away to a community development group, because the mortgage is still tied to the property.

Citi spokesman Mark Rodgers said in an emailed statement that the bank had maintained the property “pursuant to investor standards” while it was in foreclosure, including mowing the lawn and winterizing the house. He said the investor who bought the mortgage and likely packaged it into a mortgage bond directed the bank to drop the foreclosure.

“In 2012, the investor directed Citi to cancel the foreclosure and release the loan so they could pursue other collection remedies,” he said. He declined to name the investor, but records provided by Mainor show that Citi transferred the mortgage to Freddie Mac, the government-sponsored mortgage giant, in October 2013.

“If they want to take the position that there’s not enough equity in the home to proceed, they should decide that before they file a foreclosure,” said Albert, the legal services lawyer who has several clients living in rentals while the houses they once called home sit empty and deteriorating.

Unfortunately for her clients, that’s not required by law. A lender has no obligation to take the house and forgive the loan if a borrower defaults, said Andrew Pizor, a lawyer at the National Consumer Law Center in Washington. “They can say, ‘We want the money. We don’t want the collateral.’”

Poor neighborhoods suffer

Zombie homes can haunt homeowners for years and have a negative impact on neighborhoods and cities.

The Jacksonville metropolitan area is listed as having 12,011 properties in some stage of foreclosure as of June and 29 percent — 3,532 — are vacant, according to RealtyTrac.

The Tampa-St. Petersburg-Clearwater area fares even worse, with 30 percent of 31,759 homes in foreclosure sitting empty.

“It’s heavily concentrated in the poorer, African-American neighborhoods,” said Mike Dove, neighborhood affairs administrator for St. Petersburg, who has created a database of every vacant home in the city, including lender information.

“Someone who doesn’t have the wherewithal to hire an attorney and fight a foreclosure walks away, because they think the bank has taken it,” Dove said. “What else would you do?”

When homeowners and banks walk away from a property, the city is left with the responsibility for the home. Sometimes it wants to fix it up and sell, sometimes it wants to tear it down. But St. Petersburg doesn’t have the resources to deal with all the vacant homes.

“From my perspective if you’re foreclosing on a property you ought to take some responsibility for those properties,” Dove said. 

He’s working on mapping all the vacant properties by lender and detailing their condition. He hopes to bring the information to the banks and ask them to “step up and take responsibility.”

He said Wells Fargo is the lender with the most abandoned homes in his city, with about 600 properties in foreclosure and about 84 are empty, according to data from the city and from RealtyTrac. The company made $5.7 billion in profit in the second quarter of this year.  

Wells Fargo spokesman Tom Goyda said the company is the largest mortgage servicer in the country so it has more homes in foreclosure than its competitors in many cities. Wells maintains vacant properties that are in foreclosure proceedings even before it takes title. He said the company mows lawns, removes debris, winterizes the home and ensures they are secure. 

"We work hard to maintain foreclosure properties in a manner that is a benefit to the community until the home is sold," he said. 

Dove says he wants the banks to do a better job caring for abandoned homes that are damaging neighborhoods across St. Petersburg. “I want to hold these financial institutions accountable."

He’s got a tough road, according to legal experts.

Many hard-hit cities have already tried to find ways to hold banks accountable for abandoned properties for which they hold a mortgage.

Baltimore and Memphis, Tennessee, succeeded in obtaining settlements from Wells Fargo for alleged predatory lending that led to abandoned homes, but Birmingham, Alabama’s lawsuit failed, according to Kathleen Engel, a law professor at Suffolk University in Boston who has written about cities’ legal efforts.

Cleveland sued several banks, alleging they caused a public nuisance in one case and accusing them of racketeering in another. The cases were dismissed.

“Cities have suffered unique injuries as a result of exploitative and illegal lending,” Engel wrote in the Fordham Urban Law Journal City Square. “Thus far the financial institutions have not had to internalize the harm they caused in Cleveland, Birmingham and other municipalities.”

The Justice Department has recognized the problem to some degree. In record-breaking agreements to settle claims of mortgage bond fraud, Bank of America and JPMorgan Chase & Co. each agreed to contribute to efforts to fight blight, including forgiving loans when they decide not to pursue foreclosure, and helping cities pay to demolish homes. The agreements, however, contain no specific monetary obligation and instead fall under broad consumer relief payments.

“The Justice Department recognized this was an issue arising out of the financial crisis and a substantial way for banks to redress the harm caused to communities,” said spokeswoman Nicole Navas.

Jacksonville, St. Petersburg and many other cities nationwide instead have borne the burden.

Jacksonville in fiscal 2013 demolished 113 homes that were vacant and unsafe. In fiscal 2014, the city has bulldozed another 60. St. Petersburg will probably demolish 100 houses this year.

So the legacy of the housing collapse in Florida has come to this: A bank forecloses on a home, the residents pack up and leave and the city is left to clean up the mess.

Alison Fitzgeraldhttp://www.publicintegrity.org/authors/alison-fitzgeraldJared Bennetthttp://www.publicintegrity.org/authors/jared-bennetthttp://www.publicintegrity.org/2014/09/15/15519/zombie-homes-haunt-florida-neighborhoods

Taking insurance companies out of health care

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There are many Americans who are beginning to question the contributions big insurance companies make to our health care system. And I’m not just talking about lefty advocates of a single-payer system. Corporate executives are also wondering why we need the big insurers and whether higher-quality and more cost-effective care could be provided to employees if they didn’t have to deal with health insurers at all.

I wrote a few months back that my former CEO at Cigna once said that what kept him up at night was the possibility that Americans — business leaders in particular — would ultimately conclude that insurers were an unnecessary expense. He used the term “disintermediation,” a fancy word that means “cutting out the middle man.”

News out of Seattle this summer undoubtedly has caused the big insurance CEOs to lose more than a bit of sleep. Boeing, the world’s largest aerospace company and one of the Seattle area’s largest employers, announced that it has decided to forego the services of an insurance company and to contract directly with two of the Northwest’s largest hospital systems to provide care to its 27,000 employees and 3,000 retirees in the region.

Boeing is actually teaming up with a couple of recently formed accountable care organizations, which represent a new way of financing and paying for medical care. Encouraged by the Affordable Care Act, ACOs typically comprise a set of physicians — specialists and primary care doctors — and hospitals that work collaboratively and accept some of the financial risk of providing care to a particular population of patients. Some ACOs also include insurance companies. But many do not.

The idea behind the more than 600 ACOs that have been created nationwide is that when doctors and hospitals work together in such arrangements, they get rewarded financially for keeping and making patients healthy — rather than getting paid based solely on the number of tests and procedures they do.

What distinguishes the Boeing ACOs, aside from the fact that no insurers are involved, is that they are among the first ACOs that are employer-driven. You can be certain that big employers all over America will be paying close attention. If the Boeing ACO experiment demonstrates savings, expect to see many more in the near future.

“The advantage for Boeing will be that they can take the middle man out of the equation between the patients and the health system,” Dr. Elliott Fisher, director of the Dartmouth Institute for Health Policy and Clinical Practice, was quoted as telling The Seattle Times. “It may be able to reduce cost, in part because of the simplification of not having the insurance mechanism in the middle.”

While Boeing will continue to offer traditional insurance, the company believes many employees will be attracted to the ACOs because of what is expected to be an improved “patient experience.” The Times quoted officials as saying that the ACOs can coordinate appointments and treatment across their network of doctors, clinics and hospitals, relieving patients of that responsibility or the need to get prior approvals from an insurance company.

In anticipation that this will become a national trend, and as a result of Affordable Care Act provisions that are squeezing profit margins, the big for-profit health insurers are quickly diversifying.

Just two weeks ago, Modern Healthcare noted that because health insurers are now required to spend at least 80 percent of premium revenue on actual patient care, they are looking for higher investment returns elsewhere. The magazine reported that insurers are increasingly putting money into technology ventures from which they expect to realize higher returns.

The magazine cited as an example UnitedHealth Group’s Optum division, which works in technology and population health management, among other specialties. In 2013, Optum reported 26 percent growth in revenue and 61 percent growth in operating earnings. Meanwhile, in its core insurance business, UnitedHealth saw its 2013 operating margin decline to 6.4 percent, down from 7.6 percent in 2012.

Mark Bertolini, the CEO of one of the other big insurers, Aetna, was quoted in the article as saying that his company has gotten “very active in the M&A (mergers and acquisitions) market,” particularly in the international and technology areas. Bertolini has been candid in saying that Aetna no longer sees itself as a traditional insurer.

I predict that the big for-profits will eventually cede the health insurance marketplace to nonprofit insurers and provider-led organizations like ACOs—and even to hospitals that are looking to operate their own health plans.

Health insurance in this country was initially provider-based and community-rated. The first plan, which was the forerunner of Blue Cross, was one developed by an executive of Baylor Hospital in Texas in the late 1920s. In the not too distant future, I believe we will be going back to the future, with today’s big health insurers being largely out of the picture. If the Boeing experiment flies. 

Wendell Potter is the author of Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans and Obamacare: What’s in It for Me? What Everyone Needs to Know About the Affordable Care Act.

Boeing Field in Seattle, Washington. Boeing announced this summer it will forego health insurance company services and instead contract directly with hospital systems to provide care for its employees.Wendell Potterhttp://www.publicintegrity.org/authors/wendell-potterhttp://www.publicintegrity.org/2014/09/15/15524/taking-insurance-companies-out-health-care

Treasury extends controversial bank-card deal with Comerica

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The Treasury Department has extended a deal with Comerica Bank to distribute benefits to the elderly and disabled on payment cards despite vowing last year to seek a new vendor for the program, which exposed poor and elderly Americans to fraud.

Treasury’s inspector general plans to review the selection process that led to another contract with Comerica, his counsel said in an email Monday.

Treasury’s announcement that it had signed a new, five-year deal with Dallas-based Comerica to distribute Social Security and disability on bank-issued, taxpayer subsidized cards came in the second-to-last paragraph of a blog entry posted on Friday afternoon. Treasury agreed last year to seek another bank partner after a report by The Center exposed fraud in the program and poor oversight of the contract to provide the cards, known as “Direct Express.”

Under the previous contract, Treasury also paid Comerica an extra $32.5 million for work the bank had promised to do for free. The payments turned a potential loss for the bank of $24.2 million into $8.4 million of profit, according a March report by Inspector General Eric Thorson.

The extra payments might “provide Comerica with a future competitive advantage in the rebid” of the contract, Thorson warned in the report.

Treasury hired Comerica to distribute benefits payments as part of a plan to push people into using electronic payments. The goal was to cut the cost to the government of printing and mailing paper checks.

The cards were supposed to help people without bank accounts access their benefits while avoiding high fees charged by check cashers. Aggressive marketing by Treasury and Comerica eventually netted the bank more than a million customers who did not need the cards because they already had bank accounts. The card fees are far higher than direct deposit into a bank account.

Thousands of poor people who never requested the cards received them anyway, likely causing them to pay more fees than necessary, The Center reported. Thousands more allegedly had their Social Security and other benefits illegally rerouted to criminals’ accounts because of weak fraud controls.

A spokesman for Comerica did not respond to a request for comment. Treasury declined to elaborate on the blog post and did not disclose details of the new Comerica contract.

Thorson’s audit criticized Treasury officials for making multi-million dollar decisions based only on unverified information provided by Comerica. The Treasury bureau that runs the program “was often lacking” documentation and “ongoing monitoring of a program involving tens of millions of taxpayer dollars,” Thorson wrote.

A senior Treasury official announced the decision to seek another bank partner after senators pummeled him during a hearing. Sen Elizabeth Warren asked incredulously if “we agreed to give Comerica — we, the U.S. government, through Treasury — an additional $30 million without knowing if they were already making substantial profits on this contract?”

Treasury’s process for seeking a new partner was less transparent and competitive than standard government contracting. Using an obscure, Civil War-era authority, Treasury can pick bankers to work on some projects without publicly soliciting bids or choosing the least expensive option.

“Treasury has very specific requirements that all actions and decisions be documented” in the course of selecting a bank under this authority, Rich Delmar, counsel to the inspector general, said in an email Monday. He said those are the standards by which his office had evaluated Comerica’s earlier deal and would evaluate such contracts in the future.

In this case, Treasury publicly posted an invitation for first-round bidders. After that, it reverted to a process without public oversight that excludes many potential bidders — the same process used to select Comerica for the first time seven years earlier.

Treasury officials declined to say if any other banks sought the assignment or to elaborate on the extension of Comerica’s deal. The blog entry Friday referred to “several new innovative benefits and features, including an expanded ATM network and reduced fees.”

The United States Treasury SealDaniel Wagnerhttp://www.publicintegrity.org/authors/daniel-wagnerhttp://www.publicintegrity.org/2014/09/15/15536/treasury-extends-controversial-bank-card-deal-comerica

Black lung disease surges to highs not seen since the '70s, research shows

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Black lung, the dreaded coal miners’ disease that had been on the decline, has roared back. The worst form of the illness now afflicts a higher proportion of miners than at any time since the 1970s, new research from U.S. government scientists shows.

The likely culprit, researchers say, is a failure by coal mining companies to use readily available tools to control the dust that lodges in miners’ lungs and causes the disease.

Each case of advanced black lung “is a tragedy, and represents a failure among all those responsible for preventing this severe disease,” the researchers from the National Institute for Occupational Safety and Health, part of the Centers for Disease Control and Prevention, wrote in a letter published Monday in the American Journal of Respiratory and Critical Care Medicine.

A spokesman for the National Mining Association said the trade group had not yet had the opportunity to review the findings in detail, but told BuzzFeed News that “our industry continues its efforts to control coal dust to improve miners’ health.”

Back in 1969, the Federal Coal Mine Health and Safety Act limited the amount of dust allowed in mines with the expectation that the disease would be virtually eradicated. This appeared to be happening: Prevalence declined until the late 1990s, when only 0.33% of working miners had the severe form of the disease, known as complicated coal workers’ pneumoconiosis.

Then, to researchers’ dismay, this trend reversed. The numbers released Monday place the rate in 2012 at 3.23%, almost a ten-fold increase. But even this number is almost certainly an undercount, as researchers previously have noted when describing data derived from the government’s surveillance program. Participation is voluntary and does not include miners who have retired or had to quit because of disability — workers likely to bear the largest disease burden.

While mining companies can curb black lung using widely available equipment and long-known practices to limit dust levels, researchers say, there may be other contributing factors. Miners are working longer hours, and the mixture of dust they’re breathing may be particularly dangerous.

The uptick in severe disease has hit especially hard in a triangular region encompassing southern West Virginia, eastern Kentucky, and southwestern Virginia. In these areas, thick deposits of coal largely have been mined out, and companies increasingly are cutting into rock containing minerals that are toxic to the lungs, researchers and industry experts say.

Miners and their advocates also point to gaming of the dust sampling system required by law. Miners often describe being directed to falsify the dust samples, and federal rules left loopholes that could be exploited to misrepresent how much dust workers actually were breathing.

Miners are supposed to wear pumps that collect the dust in the air around them, but, when sampling was taking place, companies could cut production significantly — generating far less dust. They also could sample for only eight hours, even if a miner worked 10 or more, and average samples among multiple miners, potentially masking dangerous overexposures to individuals.

On August 1, parts of a long-awaited rule from the federal Mine Safety and Health Administration took effect, and regulators say it should close these loopholes. The rule also lowers the amount of dust allowed and expands the NIOSH surveillance program to include above-ground miners and expanded testing for all mine workers.

Chris Hamby, a former Center for Public Integrity reporter, now works for BuzzFeed.

A longwall mining machine operator watches as the massive device cuts through a coal seam in a mine near Cameron, W.Va.Chris Hambyhttp://www.publicintegrity.org/authors/chris-hambyhttp://www.publicintegrity.org/2014/09/15/15538/black-lung-disease-surges-highs-not-seen-70s-research-shows

The 47-year-old nuclear elephant in the room

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Israel has a substantial arsenal of nuclear weapons.

Former CIA director Robert Gates said so during his 2006 Senate confirmation hearings for secretary of defense, when he noted — while serving as a university president — that Iran is surrounded by “powers with nuclear weapons,” including “the Israelis to the west.” Former President Jimmy Carter said so in 2008 and again this year, in interviews and speeches in which he pegged the number of Israel’s nuclear warheads at 150 to around 300.

But due to a quirk of federal secrecy rules, such remarks generally cannot be made even now by those who work for the U.S. government and hold active security clearances. In fact, U.S. officials, even those on Capitol Hill, are routinely admonished not to mention the existence of an Israeli nuclear arsenal and occasionally punished when they do so.

The policy of never publicly confirming what a scholar once called one of the world’s “worst-kept secrets” dates from a political deal between the United States and Israel in the late 1960s. Its consequence has been to help Israel maintain a distinctive military posture in the Middle East while avoiding the scrutiny — and occasional disapprobation — directed at the world’s eight acknowledged nuclear powers.

But the U.S. policy of shielding the Israeli program has recently provoked new controversy, partly because of allegations that it played a role in the censure of a well-known national laboratory arms researcher in July, after he published an article in which he acknowledged that Israel has nuclear arms. Some scholars and experts are also complaining that the government’s lack of candor is complicating its high-profile campaign to block the development of nuclear arms in Iran, as well as U.S.-led planning for a potential treaty prohibiting nuclear arms anywhere in the region.

The U.S. silence is largely unwavering, however. “We would never say flatly that Israel has nuclear weapons,” explained a former senior State Department official who dealt with nuclear issues during the Bush administration. “We would have to couch it in other language, we would have to say ‘we assume’ or ‘we presume that Israel has nuclear weapons,’ or ‘it’s reported’ that they have them,” the former official said, requesting that his name not be used due to the political sensitivity surrounding the topic.

President Barack Obama made clear that this 4-decade-old U.S. policy would persist at his first White House press conference in 2009, when journalist Helen Thomas asked if he knew of any nations in the Middle East with nuclear arms. “With respect to nuclear weapons, you know, I don’t want to speculate,” Obama said, as though Israel’s established status as a nuclear weapons state was only a matter of rumor and conjecture.

So wary is Paul Pillar, a former U.S. national intelligence officer for the Middle East, of making any direct, public reference to Israel’s nuclear arsenal that when he wrote an article this month in The National Interest, entitled “Israel’s Widely Suspected Unmentionables,” he referred to warheads as “kumquats” throughout his manuscript.

Even Congress has been coy on the subject. When the Senate Foreign Relations Committee published a 2008 report titled “Chain Reaction: Avoiding a Nuclear Arms Race in the Middle East,” it included chapters on Saudi Arabia, Egypt and Turkey — but not Israel. The 61-page report relegated Israel’s nuclear arms to a footnote that suggested that Israel’s arsenal was a “perception.”

“This report does not take a position on the existence of Israeli nuclear weapons,” the report said. “Although Israel has not officially acknowledged it possesses nuclear weapons, a widespread consensus exists in the region and among experts in the United States that Israel possesses a number of nuclear weapons. For Israel’s neighbors, this perception is more important than reality.”

While former White House or cabinet-level officers — such as Gates — have gotten away with more candor, the bureaucracy does not take honesty by junior officials lightly. James Doyle, a veteran nuclear analyst at Los Alamos National Laboratory who was recently censured, evidently left himself open to punishment by straying minutely from U.S. policy in a February 2013 article published by the British journal Survival.

“Nuclear weapons did not deter Egypt and Syria from attacking Israel in 1973, Argentina from attacking British territory in the 1982 Falklands War or Iraq from attacking Israel during the 1991 Gulf War,” Doyle said in a bitingly critical appraisal of Western nuclear policy, which angered his superiors at the nuclear weapons lab as well as a Republican staff member of the House Armed Services committee.

Even though three secrecy specialists at the lab concluded the article contained no secrets, more senior officials overruled them and cited an unspecified breach as justification for censuring Doyle and declaring it classified, after its publication. They docked his pay, searched his home computer and, eventually, fired him this summer. The lab has said his firing — as opposed to the censure and search — was not related to the article’s content, but Doyle and his lawyer have said they are convinced it was pure punishment for his skepticism about the tenets of nuclear deterrence.

Neither Doyle nor his colleagues revealed if the sentence in his article about Israel’s arsenal was the one that provoked officials to nitpick about a security violation, but several independent experts have surmised it was.

Steven Aftergood, director of the Project on Government Secrecy at the Federation of American Scientists, said the clues lie in the Energy Department’s citation — in a document summarizing the facts behind Doyle’s unsuccessful appeal of his ill treatment — of a classification bulletin numbered “WPN-136.”

The full, correct title of that bulletin, according to an Energy Department circular, is “WNP-136, Foreign Nuclear Capabilities.” The classification bulletin itself is not public. But Aftergood said Doyle’s only reference to a sensitive foreign nuclear program was his mention of Israel’s, making it highly probable this was the cudgel the lab used against him. “I’m certain that that’s what it is,” Aftergood said in an interview.

The circumstances surrounding Doyle’s censure are among several cases now being examined by Department of Energy (DOE) Inspector General Gregory Friedman, as part of a broader examination of inconsistent classification practices within the department and the national laboratories, several officials said.

Doyle’s reference to the existence of Israel’s nuclear arsenal reflects the consensus intelligence judgment within DOE nuclear weapons-related laboratories, former officials say. But some said they find it so hard to avoid any public reference to the weapons that classification officers periodically held special briefings about skirting the issue.

“It was one of those things that was not obvious,” a former laboratory official said, asking not to be identified due to the sensitivity of the topic. “Especially when there’s so much about it in the open domain.”

Israel’s nuclear weapons program began in the 1950s, and the country is widely believed to have assembled its first three weapons during the crisis leading to the Six-Day War in 1967, according to the Nuclear Threat Initiative, a nonprofit group in Washington that tracks nuclear weapons developments.

For decades, however, Israel itself has wrapped its nuclear program in a policy it calls “amimut,” meaning opacity or ambiguity. By hinting at but not confirming that it has these weapons, Israel has sought to deter its enemies from a major attack without provoking a concerted effort by others to develop a matching arsenal.

Israeli-American historian Avner Cohen has written that U.S. adherence to this policy evidently grew out of a September 1969 meeting between President Richard Nixon and Israeli Prime Minister Golda Meir. No transcript of the meeting has surfaced, but Cohen said it is clear the two leaders struck a deal: Israel would not test its nuclear weapons or announce it possessed them, while the United States wouldn’t press Israel to give them up or to sign the Non-Proliferation Treaty, and would halt its annual inspections of Dimona, the site of Israel’s Negev Nuclear Research Center.

As an outgrowth of the deal, Washington, moreover, would adopt Israel’s secret as its own, eventually acquiescing to a public formulation of Israeli policy that was initially strenuously opposed by top U.S. officials.

“Israel will not be the first country to introduce nuclear weapons into the Middle East,” the boilerplate Israeli account has long stated. “Israel supports a Middle East free of all weapons of mass destruction following the attainment of peace.” When Nixon’s aides sought assurances this pledge meant Israel would not actually build any bombs, Israeli officials said the word “introduce” would have a different meaning: It meant the country would not publicly test bombs or admit to possessing them, leaving ample room for its unacknowledged arsenal.

“While we might ideally like to halt actual Israeli possession,” then-National Security Adviser Henry Kissinger wrote in a July 1969 memo to Nixon that summarized Washington’s enduring policy, “what we really want at a minimum may be just to keep Israeli possession from becoming an established international fact.”

Even when Mordechai Vanunu, a technician at Dimona, provided the first detasiled, public account of the program in 1986 and released photos he had snapped there of nuclear weapons components, both countries refused to shift gears. After being snatched from Italy, Vanunu was imprisoned by Israel for 18 years, mostly in solitary confinement, and subsequently forbidden to travel abroad or deal substantively with foreign journalists. In an email exchange with the Center for Public Integrity, Vanunu indicated that he still faces restrictions but did not elaborate. “You can write me again when I am free, out of Israel,” he said.

The avoidance of candor has sometimes extended to private government channels. A former U.S. intelligence official said he recalled being flabbergasted in the 1990’s by the absence of any mention of Israel in a particular highly-classified document purporting to describe all foreign nuclear weapons programs. He said he complained to colleagues at the time that “we’ve really got a problem if we can’t acknowledge the truth even in classified documents,” and finally won a grudging but spare mention of the country’s nuclear arsenal.

Gary Samore, who was President Obama’s top advisor on nuclear nonproliferation from 2009 to 2013, said the United States has long preferred that Israel hold to its policy of amimut, out of concern that other Middle Eastern nations would feel threatened by Israel’s coming out of the nuclear closet.

“For the Israelis to acknowledge and declare it, that would be seen as provocative,” he said. “It could spur some of the Arab states and Iran to produce weapons. So we like calculated ambiguity.” But when asked point-blank if the fact that Israel has nuclear weapons is classified, Samore — who is now at Harvard University — answered: “It doesn’t sound very classified to me — that Israel has nuclear weapons?”

 The U.S. government’s official silence was broken only by accident, when in 1979, the CIA released a four-page summary of an intelligence memorandum titled “Prospects for Further Proliferation of Nuclear Weapons,” in response to a Freedom of Information Act request by the Natural Resources Defense Council, a nonprofit environmental group.

“We believe that Israel already has produced nuclear weapons,” the 1974 report said, citing Israel’s stockpiling of large quantities of uranium, its uranium enrichment program, and its investment in a costly missile system capable of delivering nuclear warheads. Release of the report triggered a spate of headlines. “CIA said in 1974 Israel had A-Bombs,” a New York Times headline declared. “Israel a Nuclear Club Member Since 1974, CIA Study Indicates,” announced The Washington Star.

But it stemmed from a goof.

John Despres, who was the CIA’s national intelligence officer for nuclear proliferation at the time, said he was in charge of censoring or “redacting” the secret material from the report prior to its release. But portions he wanted withheld were released, he said in an interview, while sections that were supposed to be released were withheld.

“This was a sort of classic case of a bureaucratic screw-up,” said Despres, now retired. “People misinterpreted my instructions.” He said that as far as he knows, no one was disciplined for the mix-up. Moreover, in 2008, when the National Security Archive obtained a copy of the document under the Freedom of Information Act, that judgment remained unexcised.

But Washington’s refusal to confirm the obvious in any other way has produced some weird trips down the rabbit hole for those seeking official data about the Israeli arsenal. Bryan Siebert, who was the most senior career executive in charge of guarding DOE’s nuclear weapons secrets from 1992 to 2002, said he recalls seeing a two-cubic-foot stack at one point of CIA, FBI, Justice and Energy department documents about Israel’s nuclear program.

But when Siebert filed a FOIA request to DOE for information about the program after his retirement in April 2004, DOE’s official reply — written by David Osias, a former CIA official who was then deputy director for intelligence and analysis at DOE — was that the department “can neither confirm nor deny the existence of information on the requested subject. Such confirmation or denial of the records at issue, would pose a threat to national security.”

John Fitzpatrick, who since 2011 has served as director of the federal Information Security Oversight Office, confirmed that “aspects” of Israel’s nuclear status are considered secret by the United States. “We know this from classifying authorities at agencies who handle that material,” said Fitzpatrick, who declined to provide more details.

Kerry Brodie, director of communications for the Israeli embassy in Washington, similarly said no one there would discuss the subject of the country’s nuclear status. “Unfortunately, we do not have any comment we can share at this point,” she wrote in an email. A former speaker of the Israeli Knesset, Avraham Burg, was less discrete during a December 2013 conference in Haifa, where he said “Israel has nuclear and chemical weapons” and called the policy of ambiguity “outdated and childish.”

Through a spokesman, Robert Gates declined to discuss the issue. But a growing number of U.S. experts agree with Burg.

Pillar, for example, wrote in his article this month that the 45-year old U.S. policy of shielding Israel’s program is seen around the world “as not just a double standard but living a lie. Whatever the United States says about nuclear weapons will always be taken with a grain of salt or with some measure of disdain as long as the United States says nothing about kumquats.”

Victor Gilinsky, a physicist and former member of the Nuclear Regulatory Commission who has written about the history of the Israeli program, complained in a recent book that “the pretense of ignorance about Israeli bombs does not wash anymore. … The evident double standard undermines efforts to control the spread of nuclear weapons worldwide.”

J. William Leonard, who ran a government-wide declassification effort as President George W. Bush’s director of the Information Security Oversight Office from 2002 to 2008, commented that “in some regards, it undermines the integrity of the classification system when you’re using classification to officially protect a known secret. It can get exceedingly awkward, obviously.”

Aftergood said the secrecy surrounding Israel’s nuclear weapons is “obsolete and fraying around the edges. … It takes an effort to preserve the fiction that this is a secret,” he said. Meanwhile, he added, it can still be abused as an instrument for punishing federal employees such as Doyle for unrelated or politically-inspired reasons. “Managers have broad discretion to overlook or forgive a particular infraction,” Aftergood said. “The problem is that discretion can be abused. And some employees get punished severely while others do not.”

Dana H. Allin, the editor of Doyle’s article in Survival magazine, said in a recent commentary published by the International Institute for Strategic Studies in London that “anyone with a passing knowledge of international affairs knows about these weapons.” He called the government’s claim that the article contained secrets “ludicrous” and said Doyle’s ordeal at the hands of the classification authorities was nothing short of Kafkaesque.

An aerial view of the Negev Nuclear Research Center near Dimona, Israel.Douglas Birchhttp://www.publicintegrity.org/authors/douglas-birchR. Jeffrey Smithhttp://www.publicintegrity.org/authors/r-jeffrey-smithhttp://www.publicintegrity.org/2014/09/16/15527/47-year-old-nuclear-elephant-room

DOE official seeks probe of dissident analyst’s dismissal by nuclear weapons laboratory

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A senior Energy Department official has requested a special probe of claims by a U.S. nuclear weapons analyst that one of the nuclear weapons laboratories canceled his security clearances and fired him as punishment for publishing a critique of longstanding U.S. weapons policy.

The request by Under Secretary for Nuclear Security Frank Klotz for an inquiry by the DOE Inspector General into the dismissal in July of James E. Doyle by Los Alamos National Laboratory was disclosed in a Sept. 15 letter from another department official to Doyle’s attorney, Mark Zaid.

In the letter, Poli Mamolejos, director of the DOE’s Office of Hearings and Appeals, wrote that DOE’s “senior leadership takes the issue you raise seriously, and will not tolerate retaliation or dismissals of employees or contractors for the views expressed in scholarly publications.”

Doyle, a political scientist, was fired in July, shortly after the Center for Public Integrity inquired about the department’s handling of an article he published in the British journal Survival that challenged the tenets of nuclear deterrence and supported President Obama’s call for movement towards a nuclear weapons-free future.

That message conflicted with the laboratory’s principal work developing nuclear weapons, but the laboratory’s security experts cleared it for publication. Then, after hearing complaints from a Republican staff member of the House Armed Services Committee, more senior laboratory officials opted to classify the article retroactively, dock Doyle’s pay, and cancel his clearances.

In the letter, Marmolejos wrote that Klotz had asked the Inspector General, Gregory H. Friedman, to examine whether Doyle’s termination “resulted, in whole or in part, from the publication in question or the views expressed in it.”

Marmolejos said Secretary of Energy Moniz had delegated the review of Doyle’s  2013 whistleblower case to Deputy Secretary Daniel Poneman. Poneman, Marmolejos said, had ruled against Doyle’s claim that Los Alamos had “improperly classified” his article in violation of the rules governing government secrecy.

Poneman essentially upheld Marmolejos’ earlier decision, which ruled that Doyle’s appeal didn’t meet the department’s standard for whistleblowers because it didn’t disclose “substantial” law-breaking by the lab.

Reached by phone while on vacation in New Mexico, Doyle said he had not yet seen Marmolejos’ letter and would study it when he had a chance. He said he was concerned that the ruling that his article was properly classified could make it more difficult for him to pursue his claim of retaliation by the lab.

None of the others involved — Friedman, Klotz, and officials at Los Alamos, or their spokesmen — returned phone calls seeking comment on Sept. 15. Last year, Los Alamos officials told Doyle that his article should never have been cleared for publication. When he was terminated in July, he was told he was being laid off as part of a program of staff reductions prompted by budget concerns.

“By handing it off to the Inspector General, they are creating the possibility of an impartial review,” said Steven Aftergood, director of the Project on Government Secrecy at the Federation of American Scientists. “I think that’s a positive step, because it takes it out of the narrow framework of regulatory compliance and addresses the core question. Was he retaliated against? And are there procedures in place to protect the independence and intellectual integrity of employees, especially at the national labs.”

Department of Energy Inspector General Gregory H. FriedmanDouglas Birchhttp://www.publicintegrity.org/authors/douglas-birchhttp://www.publicintegrity.org/2014/09/16/15540/doe-official-seeks-probe-dissident-analyst-s-dismissal-nuclear-weapons-laboratory

Children's rights groups urge Defense program to stop giving school cops military hardware

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More than 20 national education and civil rights advocates sent a letter Monday to Department of Defense officials, urging them to stop giving U.S. school police departments anti-mine vehicles, military-grade firearms like M16s, and even grenade launchers.

News reports and lists of recipients of surplus hardware reveal that assault-style rifles, armored vehicles and other military supplies have been handed over to school districts large and small, from California, Texas, Nevada and Utah to Florida, Georgia, Kansas and Michigan.  

In California, the San Diego Unified School District acquired an 18-ton Mine-Resistant Ambush Protected vehicle, called a MRAP, through the DOD’s 1033 program to transfer surplus supplies to civilian law enforcement. In June, the Los Angeles Unified School District also received a MRAP, which was designed to protect U.S. troops under attack in Iraq.

Over time, the L.A. school police also have received 61 M-16 rifles and three grenade launchers that have never been used.  

“Adding the presence of military-grade weapons to school climates that have become increasingly hostile due to their over-reliance on police to handle routine student discipline can only exacerbate existing tensions,” said the protest letter, signed by the NAACP’s Legal Defense and Education Fund and public-interest law groups Texas Appleseed of Austin, Texas, and Public Counsel, which is based in Los Angeles.

Controversy over so-called militarization of school police comes just as the L.A. district is enacting policies that limit ticketing of students for minor infractions and curb the controversial use of officers in school discipline, as the Center for Public Integrity has reported.   

Both Texas Appleseed and Public Counsel have been active in pushing for states and district to reform policies regarding how school police are deployed on campuses.

Other signatories to the letter objecting to military hardware for school police include the Children’s Law Center, the Education Law Center, the National Center for Youth Law, the Advancement Project — also active in urging school police reforms — and the L.A.-based Labor-Community Strategy Center.    

Scrutiny of transfers of military supplies from the DOD’s Defense Logistics Agency erupted following revelations that many city police departments have been accumulating military hardware designed primarily for war.  

Among the cities that obtained military equipment for free, or just for delivery costs, was Ferguson, Missouri, where local police rolled out armored vehicles and officers in combat-like gear to respond to protests in August over an officers’ fatal shooting of unarmed black teenager Michael Brown.  

President Obama in August ordered a review of the 1033 program. The Defense Logistics Agency did not respond immediately to a request for a comment on the letter regarding school police. But on Sept. 9, a Defense Department official addressed the 1033 program’ s provision of hardware to law enforcement in general during a hearing before the Senate Committee on Homeland Security and Governmental Affairs.  

Each state has a 1033 program state coordinator who is appointed by the state’s governor and who approves law enforcement agencies that apply to participate in the program. The state coordinator also screens and approves requests those agencies make for material listed in catalogues, explained Alan Estevez, principal deputy undersecretary of defense for acquisition, logistics and technology.

“It is worth noting that we are not ‘pushing’ equipment on any police force,” Estevez said. He said the Defense Logistics Agency conducts a basic review of requests based on size of a department. For example, he said, a law enforcement department of 10 officers would not receive 20 M-16 rifles.

The letter objecting to the program noted that 10 Texas school districts, the most reported in one state so far, have been receiving DOD hardware.

“Altogether, these 10 districts have been received 64 M-16 rifles, 18 M-14 rifles, 25 automatic pistols, extended magazines and 4,500 rounds of ammunition,” the letter said. “Some of these Texas districts received armored plating, tactical vests and military vehicles.”

Texas’ Edinburg Consolidated Independent School District, which has 33,500 students, has outfitted its own SWAT team with these supplies, the letter said.

Deborah Fowler, deputy director of Texas Appleseed, said militarization of police runs contrary to efforts to prevent excessive use of force against students.  

“Military grade weapons have no place on our public school campuses,” Fowler said. “We have already seen the way that much more common weapons — like Tasers and pepper spray — can be misused in school settings, and know that excessive use of force in schools is often targeted at young people of color and students with disabilities.”

In Aledo, Texas, the town’s school police — in a district of 5,000 students — have decided to return five U.S. military rifles officers obtained from the 1033 program, according to a recent report in the Fort Worth Star Telegram The department has seven full-time officers and 11 reserve officers.

In Los Angeles, Manuel Criollo, an organizer with the Labor-Community Strategy Center, called on the L.A. school district to return the military hardware. “The intersection of criminalization and militarization in our schools should be rejected,” said Criollo, who helped draft the L.A. school police policies.

L.A. school police chief Steve Zimmerman said the MRAP was obtained as a way to transport school children in the event of a large-scale attack, according to the Los Angeles Daily News.

The chief is now evaluating whether the vehicle and grenade launchers are necessary, the newspaper said. The school police have an agreement with city police and county sheriff’s deputies to provide support in the event of civil unrest, according to Zimmerman, and the grenade launchers were to be outfitted to fire rubber bullets.

The 2013 Caiman MRAP acquired by the San Diego Unified School District Police Department with decals rendered by an artist. Susan Ferrisshttp://www.publicintegrity.org/authors/susan-ferrisshttp://www.publicintegrity.org/2014/09/16/15542/childrens-rights-groups-urge-defense-program-stop-giving-school-cops-military

Iowa, Michigan bombarded with political ads

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A warning to voters in Iowa and Michigan: Exercise extreme caution when turning on your television.

During the second week of September, candidates, parties and other politically active groups sponsored about 4,500 U.S. Senate race-focused TV ads in each state, according to a Center for Public Integrity analysis of preliminary estimates from Kantar Media/CMAG, an advertising tracking service.

That’s nearly one ad every two minutes.

The Senate races in Iowa and Michigan — both are open-seat contests because Democratic incumbents are retiring — have this month emerged as two of the nation’s hottest as Republicans battle Democrats for control of Congress’ upper chamber.

Voters have been “inundated with advertising,” said Barbara Trish, a professor of political science at Grinnell College in Iowa.

“You can pretty much saturate [Iowa],” she added, “for a lot less money” than many other parts of the country.

Only one other Senate contest attracted more ads from Tuesday, Sept. 9, through Monday, Sept. 15:  North Carolina, where viewers saw about 4,800 ads, according to estimates by Kantar Media/CMAG.

There, incumbent Sen. Kay Hagan, a Democrat, is locked in an equally nasty and pricey battle with Republican challenger Thom Tillis, the state’s House majority leader.

The GOP must pick up at least six seats in November to wrest control of the Senate from Democrats.

In Michigan, Democratic Rep. Gary Peters is facing off against former Secretary of State Terri Lynn Land.

Land’s campaign aired more TV ads last week — 1,300, or about one ad every eight minutes — than any other candidate’s campaign except for Senate Minority Leader Mitch McConnell, according to estimates by Kantar Media/CMAG. McConnell is battling Democrat Alison Lundergan Grimes for another six-year term.

Nevertheless, Land’s campaign was not the top sponsor of TV ads in Michigan’s Senate race from Sept. 9 through Sept. 15.

That distinction belongs to the NextGen Climate Action Committee, a liberal super PAC backed by billionaire environmentalist and former hedge fund executive Tom Steyer.

The group aired about 1,500 TV ads — or about one ad every seven minutes — that primarily slammed Land’s candidacy.

“Michigan needs a leader like Congressman Gary Peters, who will stand up for Michigan families and take on the special interests that threaten the state’s clean energy future,” said Sam Inglot, a spokesman for NextGen Climate Action in Michigan.

Heather Swift, a spokeswoman for Land’s campaign, said the spending spree by Steyer’s super PAC and other liberal groups was coming because Land “has the momentum.”

Swift added: “Independent fact checkers have rated their nasty attack ads against Terri as false, misleading and downright wrong.”

A spokesperson for Peters — who has held a modest lead in most recent polls — did not immediately respond to a request for comment.

Meanwhile in Iowa, Republicans have rallied behind state Sen. Joni Ernst and Democrats behind Rep. Bruce Braley, who is running neck-and-neck with Ernst, according to recent polls.

Top sponsors of TV ads in Iowa’s Senate race last week were American Crossroads, the super PAC co-founded by GOP strategist Karl Rove, and the Democratic Senatorial Campaign Committee. Each aired about 1,000 TV ads.

For the DSCC, ads in Iowa alone amounted to about one out of every four ads the group aired nationwide from Sept. 9 through Sept. 15.

Overall during this period, the DSCC aired about 4,100 TV ads across eight, battleground states: Alaska, Arkansas, Colorado, Iowa, Louisiana, Michigan, North Carolina and New Hampshire.

Since the beginning of 2013, Republicans and conservative groups have aired about 15 percent more ads than Democrats and their allies in both Iowa and Michigan.

Vincent Hutchings, a professor of political science at the University of Michigan, told the Center for Public Integrity that both Democrats and Republicans are finding the extra air support from outside groups helpful.

“It’s just so expensive to get on TV,” he said.

From left: Republicans Terri Lynn Land and Joni Ernst, who are vying to become U.S. senators from Michigan and Iowa.Michael Beckelhttp://www.publicintegrity.org/authors/michael-beckelhttp://www.publicintegrity.org/2014/09/18/15546/iowa-michigan-bombarded-political-ads
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