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Corporate Criminals
They Don't Go to Jail, They Just Rob You
january 2024
Truly great companies are built on ideals, not just deals.
Alan Watts
articles
*THE GREAT MEDICARE ADVANTAGE MARKETING SCAM
(ARTICLE BELOW)
*BOFA HIT WITH $250 MILLION IN FINES, PENALTIES, REFUNDS FOR 'DOUBLE-DIPPING' FEES, FAKE ACCOUNTS(ARTICLE BELOW)
*AMAZON DUPED MILLIONS INTO ENROLLING IN PRIME, US REGULATOR SAYS IN LAWSUIT
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*'STRAIGHT UP FRAUD': DATA CONFIRMS PRIVATE INSURERS ARE STEALING BILLIONS
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*HOW TO DECIMATE THE CORPORATE TAX-AVOIDANCE INDUSTRY
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*‘They all knew’: textile company misled regulators about use of toxic PFAS, documents show(ARTICLE BELOW)
*HOW MEDICARE ADVANTAGE SCAMMERS GET AWAY WITH IT
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*RIGHT-WING GROUPS OPPOSED TO GOVERNMENT AID CASHED IN WHILE COLLECTING PPP LOANS
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*THE 2021 CORPORATE RAP SHEET
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*J&J is using a bankruptcy maneuver to block lawsuits over baby powder cancer claims(ARTICLE BELOW)
*McKinsey Never Told the FDA It Was Working for Opioid Makers While Also Working for the Agency(ARTICLE BELOW)
*COMPANIES LOBBYING AGAINST INFRASTRUCTURE TAX INCREASES HAVE AVOIDED PAYING BILLIONS IN TAXES(ARTICLE BELOW)
*POVERTY WAGES AND TAX DODGING FUNDED BEZOS’S RIDICULOUS SPACE TRIP
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*TRUMP'S CORRUPTION WAS SO GARISH THAT WE LOST SIGHT OF THE OTHER BRIGANDS
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*Ending Corporate Impunity
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*KUSHNER COMPANIES VIOLATED MULTIPLE LAWS IN MASSIVE TENANT DISPUTE, JUDGE RULES
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*Company awarded $1.3B by Trump to make vaccine syringes has not made even one
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*REVEALED: SEAFOOD FRAUD HAPPENING ON A VAST GLOBAL SCALE
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*BIDEN PUTS REGULATORS BACK IN BUSINESS
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*JPMORGAN CHASE BANK WRONGLY CHARGED 170,000 CUSTOMERS OVERDRAFT FEES. FEDERAL REGULATORS REFUSED TO PENALIZE IT.(ARTICLE BELOW)
*Big Pharma is the disease
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*TYSON EXPLOITS CONSUMERS JUST LIKE ITS ANIMALS AND THE WORKERS WHO RAISE THEM
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*TOP HOSPITALS CHARGING PATIENTS UP TO 1,800% MORE FOR SERVICES THAN THEY ACTUALLY COST: STUDY(ARTICLE BELOW)
*Watchdog group calls for SEC probe: Pfizer CEO dumped $5.6M in stock on day of vaccine news(ARTICLE BELOW)
*'FinCEN' reports say big banks moved dirty money
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*Trump & Co. Keeps Hiring Companies with Histories of Ripping Off Our Government
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*COVID Is Turning Out To Be Very Good For Bad Businesses
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*Bayer to pay $1.6 billion to settle US claims over birth control device
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*US HEALTH INSURERS DOUBLED PROFITS IN SECOND QUARTER AMID PANDEMIC
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*‘TAKING TAXPAYERS FOR A RIDE’: MODERNA TO CHARGE $32-$37/DOSE FOR COVID-19 VACCINE DEVELOPED ENTIRELY WITH PUBLIC FUNDS(ARTICLE BELOW)
*HOUSE DEMOCRATS FIND ADMINISTRATION OVERSPENT FOR VENTILATORS BY AS MUCH AS $500 MILLION(ARTICLE BELOW)
*They Sued Thousands of Borrowers During the Pandemic — Until We Started Asking Questions(ARTICLE BELOW)
*THE FOOD INDUSTRY PUTS PROFITS OVER PUBLIC HEALTH USING BIG TOBACCO’S PLAYBOOK
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*Watchdog questions why Wells Fargo reported giving only one large PPP loan to a Black-owned business(ARTICLE BELOW)
*NY equity management firm under investigation for alleged Ponzi scheme received $1.6 million in stimulus aid: WSJ(ARTICLE BELOW)
*DOUBLE-DIPPING SPOTTED AMONG PPP HEALTHCARE LOAN RECIPIENTS
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*BANKS STAND TO MAKE $18 BILLION IN PPP PROCESSING FEES FROM CARES ACT
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*Different Names, Same Address: How Big Businesses Got Government Loans Meant for Small Businesses(ARTICLE BELOW)
*‘Absolute robbery’: Gilead announces $3,120 price tag for COVID-19 drug developed with $70 million in taxpayer funds(ARTICLE BELOW)
*EPA Gives Farmers Another Month To Use Widely Banned Poison
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funnies(below)
...The more the warning signs are palpable—rising temperatures, global financial meltdowns, mass human migrations, endless wars, poisoned ecosystems, rampant corruption among the ruling class—the more we turn to those who chant, either through idiocy or cynicism, the mantra that what worked in the past will work in the future, that progress is inevitable. Factual evidence, since it is an impediment to what we desire, is banished. The taxes of corporations and the rich, who have deindustrialized the country and turned many of our cities into wastelands, are cut, and regulations are slashed to bring back the supposed golden era of the 1950s for white American workers. Public lands are opened up to the oil and gas industry as rising carbon emissions doom our species. Declining crop yields stemming from heat waves and droughts are ignored. War is the principal business of the kleptocratic state...
"reign of idiots" by chris hedges
The Great Medicare Advantage Marketing Scam
How for-profit health insurers convince seniors to enroll in private Medicare plans
BY MATTHEW CUNNINGHAM-COOK - the american prospect
JANUARY 12, 2024
Jayne Kleinman is bombarded with Medicare Advantage promotions every open enrollment period—even though she has no interest in leaving traditional Medicare, which allows seniors to choose their doctors and get the care they want without interference from multi-billion-dollar insurance companies.
“My biggest problem with being barraged is that so many of the ads were inaccurate,” Kleinman, a retired social services professional in New Haven County, Connecticut, told HEALTH CARE un-covered. “They neglect to say that the amount of coverage you get is limited. They don’t talk about what you are losing by leaving traditional Medicare. It feels like insurance companies are manipulating us to get Medicare Advantage plans sold so that they can control the system, as opposed to treating us like human beings.”
Seniors face a torrent of Medicare Advantage advertising: an analysis by KFF found 9,500 daily TV ads during open enrollment in 2022. A recent survey by the Commonwealth Fund found that 30% of seniors received seven or more phone calls weekly from Medicare Advantage marketers during the most recent open enrollment (Oct. 15 to Dec. 7) for 2024 coverage.
In 2023, a critical milestone was passed: over half of seniors are now enrolled in privatized Medicare Advantage plans. The marketing for these plans nearly always fails to mention how hard it is to return to traditional Medicare once you are in Medicare Advantage, and that the MA plans have closed provider networks and require prior authorization for medical procedures. Instead, the marketing emphasizes the fringe benefits offered by Medicare Advantage plans like gym memberships.
U.S. Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, criticized the widespread and predatory marketing of Medicare Advantage in a report in November 2022 and has continued to pressure the Biden administration to do more to address the problem.
The report said that consumer complaints about Medicare Advantage marketing more than doubled from 2020 to 2021 to 41,000. It cites cases such as that of an Oregon man whose switch to Medicare Advantage meant he could no longer afford his prescription drugs, as well as a 94-year-old woman with dementia in a rural area who bought a Medicare Advantage plan that required her to obtain care miles further from her residence than she had to travel before.
When open enrollment began last fall, it was “the start of a marketing barrage as marketing middlemen look to collect seniors’ information in order to bombard them with direct mail, emails, and phone calls to get them to enroll,” Wyden stated in a letter to the Centers for Medicare and Medicaid Services (CMS), which was signed by the other Democrats on the Senate Finance Committee.
Just three weeks after Wyden sent the letter, CMS released a proposed rule reforming Medicare Advantage practices that the main lobby group for Medicare Advantage plans, the Better Medicare Alliance, endorsed.
But key recommendations by Wyden were missing, including a ban on list acquisition by Medicare Advantage third-party marketing organizations, which includes brokers, and banning brokers that call beneficiaries multiple times a day for days in a row.
Among the prominent third-party marketing organizations is TogetherHealth, a subsidiary of Benefytt Technologies, which runs ads featuring former football star Joe Namath. In August 2022, the Federal Trade Commission forced Benefytt to repay $100 million for fraudulent activities. The month before, the Securities and Exchange Commission levied more than $12 million in fines against Benefytt. But CMS continues to allow Benefytt to work as a broker. Benefytt is owned by Madison Dearborn Partners, a Chicago-based private equity firm with ties to former Chicago mayor and current Ambassador to Japan Rahm Emanuel. Benefytt collects leads on potential customers, which they then sell to brokers and insurers to aggressively target seniors. CMS did not provide comment as to why they had not blocked Benefytt’s continuing work as a third-party marketing organization for Medicare.
Two different rounds of rule-making on Medicare Advantage marketing in 2023 instead focused on such reforms as reining in exaggerated claims and excessive broker compensation.
The enormous profits generated by Medicare Advantage plans—costing the federal government as much as $140 billion annually in overpayments to private companies—explains what drives the aggressive and often unethical marketing practices, said David Lipschutz, an associate director at the Center for Medicare Advocacy.
“The fact is, there is an increasingly imbalanced playing field between Medicare Advantage and traditional Medicare,” he said. “Medicare Advantage is being favored in many ways. Medicare Advantage plans are paid more than what traditional Medicare spends on a given beneficiary. Those factors combined with the fact that they generate such profits for insurance companies, leads to those companies doing everything they can to maximize enrollment.”
Adding to the problem, Lipschutz argued, was the enormous influence of the health insurance industry in Washington. Health insurers spent more than $33 million lobbying Washington in just the first three quarters of 2023 alone.
“There is no real organized lobby for traditional Medicare, or organized advertising efforts,” he said. “During open enrollment, 80% of Medicare-related ads have to do with Medicare Advantage. We regularly encounter very well-educated and savvy folks who are tripped up by advertising and lured in by the bells and whistles. The deck is stacked against the consumer.”
Private equity firms have made a large investment in the Medicare Advantage brokerage and marketing sector, in addition to Madison Dearborn’s acquisition of Benefytt. Bain Capital, which Sen. Mitt Romney (R-Utah) co-founded, invested $150 million in Enhance Health, a Medicare Advantage broker, in 2021. The CEO of EasyHealth, another private equity-backed brokerage, told Modern Healthcare in 2021 that “Insurance distribution is our Trojan horse into healthcare services.”
As federal law requires truth in advertising, a group of advocacy organizations—led by the Center for Medicare Advocacy, Disability Rights Connecticut, and the National Health Law Project—cited what they considered blatantly deceptive marketing by UnitedHealthcare to people who are eligible for both Medicare and Medicaid, in a complaint to CMS.
UnitedHealthcare had purchased ads in the Hartford Courant asking seniors in large bold-faced type: “Eligible for Medicare and Medicaid? You could get more with UnitedHealthcare.”
People who are eligible for both Medicare and Medicaid due to their income level are better off in traditional Medicare than Medicare Advantage given that Medicaid covers their out-of-pocket costs, meaning that they have wide latitude to choose their doctors, hospitals and medical procedures.
Sheldon Toubman, an attorney with Disability Rights Connecticut who worked to draft the complaint, framed the ad in the broader context of poor marketing practices by the Medicare Advantage industry.
“I have been aware for a long time of basically fraudulent advertising in the MA insurance industry,” Toubman told HEALTH CARE un-covered. “There’s an overriding misrepresentation—they tell you how great Medicare Advantage is, and never the downsides.[...]
“My biggest problem with being barraged is that so many of the ads were inaccurate,” Kleinman, a retired social services professional in New Haven County, Connecticut, told HEALTH CARE un-covered. “They neglect to say that the amount of coverage you get is limited. They don’t talk about what you are losing by leaving traditional Medicare. It feels like insurance companies are manipulating us to get Medicare Advantage plans sold so that they can control the system, as opposed to treating us like human beings.”
Seniors face a torrent of Medicare Advantage advertising: an analysis by KFF found 9,500 daily TV ads during open enrollment in 2022. A recent survey by the Commonwealth Fund found that 30% of seniors received seven or more phone calls weekly from Medicare Advantage marketers during the most recent open enrollment (Oct. 15 to Dec. 7) for 2024 coverage.
In 2023, a critical milestone was passed: over half of seniors are now enrolled in privatized Medicare Advantage plans. The marketing for these plans nearly always fails to mention how hard it is to return to traditional Medicare once you are in Medicare Advantage, and that the MA plans have closed provider networks and require prior authorization for medical procedures. Instead, the marketing emphasizes the fringe benefits offered by Medicare Advantage plans like gym memberships.
U.S. Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, criticized the widespread and predatory marketing of Medicare Advantage in a report in November 2022 and has continued to pressure the Biden administration to do more to address the problem.
The report said that consumer complaints about Medicare Advantage marketing more than doubled from 2020 to 2021 to 41,000. It cites cases such as that of an Oregon man whose switch to Medicare Advantage meant he could no longer afford his prescription drugs, as well as a 94-year-old woman with dementia in a rural area who bought a Medicare Advantage plan that required her to obtain care miles further from her residence than she had to travel before.
When open enrollment began last fall, it was “the start of a marketing barrage as marketing middlemen look to collect seniors’ information in order to bombard them with direct mail, emails, and phone calls to get them to enroll,” Wyden stated in a letter to the Centers for Medicare and Medicaid Services (CMS), which was signed by the other Democrats on the Senate Finance Committee.
Just three weeks after Wyden sent the letter, CMS released a proposed rule reforming Medicare Advantage practices that the main lobby group for Medicare Advantage plans, the Better Medicare Alliance, endorsed.
But key recommendations by Wyden were missing, including a ban on list acquisition by Medicare Advantage third-party marketing organizations, which includes brokers, and banning brokers that call beneficiaries multiple times a day for days in a row.
Among the prominent third-party marketing organizations is TogetherHealth, a subsidiary of Benefytt Technologies, which runs ads featuring former football star Joe Namath. In August 2022, the Federal Trade Commission forced Benefytt to repay $100 million for fraudulent activities. The month before, the Securities and Exchange Commission levied more than $12 million in fines against Benefytt. But CMS continues to allow Benefytt to work as a broker. Benefytt is owned by Madison Dearborn Partners, a Chicago-based private equity firm with ties to former Chicago mayor and current Ambassador to Japan Rahm Emanuel. Benefytt collects leads on potential customers, which they then sell to brokers and insurers to aggressively target seniors. CMS did not provide comment as to why they had not blocked Benefytt’s continuing work as a third-party marketing organization for Medicare.
Two different rounds of rule-making on Medicare Advantage marketing in 2023 instead focused on such reforms as reining in exaggerated claims and excessive broker compensation.
The enormous profits generated by Medicare Advantage plans—costing the federal government as much as $140 billion annually in overpayments to private companies—explains what drives the aggressive and often unethical marketing practices, said David Lipschutz, an associate director at the Center for Medicare Advocacy.
“The fact is, there is an increasingly imbalanced playing field between Medicare Advantage and traditional Medicare,” he said. “Medicare Advantage is being favored in many ways. Medicare Advantage plans are paid more than what traditional Medicare spends on a given beneficiary. Those factors combined with the fact that they generate such profits for insurance companies, leads to those companies doing everything they can to maximize enrollment.”
Adding to the problem, Lipschutz argued, was the enormous influence of the health insurance industry in Washington. Health insurers spent more than $33 million lobbying Washington in just the first three quarters of 2023 alone.
“There is no real organized lobby for traditional Medicare, or organized advertising efforts,” he said. “During open enrollment, 80% of Medicare-related ads have to do with Medicare Advantage. We regularly encounter very well-educated and savvy folks who are tripped up by advertising and lured in by the bells and whistles. The deck is stacked against the consumer.”
Private equity firms have made a large investment in the Medicare Advantage brokerage and marketing sector, in addition to Madison Dearborn’s acquisition of Benefytt. Bain Capital, which Sen. Mitt Romney (R-Utah) co-founded, invested $150 million in Enhance Health, a Medicare Advantage broker, in 2021. The CEO of EasyHealth, another private equity-backed brokerage, told Modern Healthcare in 2021 that “Insurance distribution is our Trojan horse into healthcare services.”
As federal law requires truth in advertising, a group of advocacy organizations—led by the Center for Medicare Advocacy, Disability Rights Connecticut, and the National Health Law Project—cited what they considered blatantly deceptive marketing by UnitedHealthcare to people who are eligible for both Medicare and Medicaid, in a complaint to CMS.
UnitedHealthcare had purchased ads in the Hartford Courant asking seniors in large bold-faced type: “Eligible for Medicare and Medicaid? You could get more with UnitedHealthcare.”
People who are eligible for both Medicare and Medicaid due to their income level are better off in traditional Medicare than Medicare Advantage given that Medicaid covers their out-of-pocket costs, meaning that they have wide latitude to choose their doctors, hospitals and medical procedures.
Sheldon Toubman, an attorney with Disability Rights Connecticut who worked to draft the complaint, framed the ad in the broader context of poor marketing practices by the Medicare Advantage industry.
“I have been aware for a long time of basically fraudulent advertising in the MA insurance industry,” Toubman told HEALTH CARE un-covered. “There’s an overriding misrepresentation—they tell you how great Medicare Advantage is, and never the downsides.[...]
Amazon
Amazon duped millions into enrolling in Prime, US regulator says in lawsuit
Federal Trade Commission alleges Bezos firm used ‘manipulative and deceptive user-interface designs to trick consumers’
Guardian staff and agencies
Wed 21 Jun 2023 12.19 EDT
The US Federal Trade Commission has sued Amazon for what it called a years-long effort to enroll consumers without consent into its paid subscription program, Amazon Prime, and making it hard for them to cancel.
The FTC, the US agency charged with consumer protection, filed a federal lawsuit in Seattle, where Amazon is headquartered, alleging that the tech behemoth “ knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime”.
The FTC said Amazon used “manipulative, coercive or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically renewing Prime subscriptions”.
It said the option to purchase items on Amazon without subscribing to Prime was more difficult in many cases. It also said that consumers were sometimes presented with a button to complete their transactions – which didn’t clearly state it would also enroll them into Prime.
Internally, Amazon called the process “Iliad”, a reference to the ancient Greek poem about lengthy siege of Troy during the Trojan war.
Company leaders slowed or rejected changes that made canceling the subscription easier, the complaint said. It argued those patterns were in violation of the FTC Act and another law called the Restore Online Shoppers’ Confidence Act.
The FTC said that “one of Amazon’s primary business goals – and the primary business goal of Prime – is increasing subscriber numbers”.
Launched in 2005, Prime has more than 200 million members worldwide who pay $139 a year, or $14.99 a month, for faster shipping and other perks, such as free delivery, returns and the streaming service Prime Video. In the first three months of this year, Amazon reported it made $9.6bn from subscription, a 17% jump from the same period last year.
In a news release announcing the lawsuit, the FTC said though its complaint is significantly redacted, it contains “a number of allegations” that back up its accusations against Amazon. It also accused the company of attempting to hinder the agency’s investigation into Prime, which began in 2021, in several instances.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” said Lina Khan, chair of the FTC, in a prepared statement. “These manipulative tactics harm consumers and law-abiding businesses alike.”
The tech giant has faced other lawsuits accusing its Prime cancelation process of being too complicated. Under scrutiny from the agency, the company in March provided consumers with instructions on how to cancel their Prime memberships in a blog post. Amazon did not immediately issue a statement on Wednesday.
Amazon has faced heightened regulatory scrutiny in recent years as it moved to expand its e-commerce dominance and dip its toes into other markets, including groceries and healthcare.
The lawsuit follows another Amazon-related win by the FTC just a few weeks ago. Earlier this month, Amazon agreed to pay a $25m civil penalty to settle allegations it violated a child privacy law for storing kids’ voice and location data recorded by its popular Alexa voice assistant. It also agreed to pay $5.8m in customer refunds for alleged privacy violations involving its doorbell camera Ring.
The FTC, the US agency charged with consumer protection, filed a federal lawsuit in Seattle, where Amazon is headquartered, alleging that the tech behemoth “ knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime”.
The FTC said Amazon used “manipulative, coercive or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically renewing Prime subscriptions”.
It said the option to purchase items on Amazon without subscribing to Prime was more difficult in many cases. It also said that consumers were sometimes presented with a button to complete their transactions – which didn’t clearly state it would also enroll them into Prime.
Internally, Amazon called the process “Iliad”, a reference to the ancient Greek poem about lengthy siege of Troy during the Trojan war.
Company leaders slowed or rejected changes that made canceling the subscription easier, the complaint said. It argued those patterns were in violation of the FTC Act and another law called the Restore Online Shoppers’ Confidence Act.
The FTC said that “one of Amazon’s primary business goals – and the primary business goal of Prime – is increasing subscriber numbers”.
Launched in 2005, Prime has more than 200 million members worldwide who pay $139 a year, or $14.99 a month, for faster shipping and other perks, such as free delivery, returns and the streaming service Prime Video. In the first three months of this year, Amazon reported it made $9.6bn from subscription, a 17% jump from the same period last year.
In a news release announcing the lawsuit, the FTC said though its complaint is significantly redacted, it contains “a number of allegations” that back up its accusations against Amazon. It also accused the company of attempting to hinder the agency’s investigation into Prime, which began in 2021, in several instances.
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” said Lina Khan, chair of the FTC, in a prepared statement. “These manipulative tactics harm consumers and law-abiding businesses alike.”
The tech giant has faced other lawsuits accusing its Prime cancelation process of being too complicated. Under scrutiny from the agency, the company in March provided consumers with instructions on how to cancel their Prime memberships in a blog post. Amazon did not immediately issue a statement on Wednesday.
Amazon has faced heightened regulatory scrutiny in recent years as it moved to expand its e-commerce dominance and dip its toes into other markets, including groceries and healthcare.
The lawsuit follows another Amazon-related win by the FTC just a few weeks ago. Earlier this month, Amazon agreed to pay a $25m civil penalty to settle allegations it violated a child privacy law for storing kids’ voice and location data recorded by its popular Alexa voice assistant. It also agreed to pay $5.8m in customer refunds for alleged privacy violations involving its doorbell camera Ring.
'Straight up fraud': Data confirms private insurers are stealing billions
Kenny Stancil, Common Dreams - raw story
October 10, 2022
Insurance giants are exploiting Medicare Advantage—a corporate-managed program that threatens to result in the complete privatization of traditional Medicare—to capture billions of dollars in extra profits, Saturday reporting by The New York Times confirmed.
"Medicare Advantage shouldn't exist."
The newspaper's analysis of dozens of lawsuits, inspector general reports, and watchdog investigations found that overbilling by Medicare Advantage (MA) providers is so pervasive it exceeds the budgets of entire federal agencies, prompting journalist Ryan Cooper to call the program "a straight up fraud scheme."
Nearly half of Medicare's 60 million beneficiaries are now enrolled in MA plans managed by for-profit insurance companies, and it is expected that most of the nation's seniors will be ensnared in the private-sector alternative to traditional Medicare by next year. Six weeks ago, Sen. Ron Wyden (D-Ore.) launched an inquiry into "potentially deceptive" marketing tactics used by MA providers to "take advantage" of vulnerable individuals.
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Larry Levitt, executive vice president for health policy at Kaiser Family Foundation (KFF), which has has no connection with Kaiser Permanente, wrote on social media that "the move to privatize Medicare" has "been very profitable, in part because insurers are good at making their patients seem sicker."
Journalist Natalie Shure concurred, tweeting: "Privatized Medicare plans cherry pick healthier enrollees, fudge medical records to make them look as sick as possible, coax doctors into tacking on extra sham diagnoses to bill for, and pay themselves a profit on top of it. Medicare Advantage shouldn't exist."
"For all its faults, Medicare is a (nearly) universal program for 65+, with overhead hovering around 2%—far lower than its private counterparts," Shure added. "What inefficiencies did anyone think MA would be solving exactly[?]" she asked.
According to the Times, MA was created by congressional Republicans "two decades ago to encourage health insurers to find innovative ways to provide better care at lower cost."
Matt Bruenig, founder of the People's Policy Project, a left-wing think tank, argued that the notion that private insurers would "provide more benefit for less money" than traditional Medicare "while taking a profit" is insane on its face.
"They innovate on other margins, namely by bending and breaking rules that determine how much money Medicare gives them, as such things are hard to detect," said Bruenig, "and we are now stuck in an endless cat and mouse enforcement game with them."
As the Times reported:
The government pays Medicare Advantage insurers a set amount for each person who enrolls, with higher rates for sicker patients. And the insurers, among the largest and most prosperous American companies, have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment, according to the lawsuits.
As a result, a program devised to help lower health care spending has instead become substantially more costly than the traditional government program it was meant to improve.
[...]
The government now spends nearly as much on Medicare Advantage's 29 million beneficiaries as on the Army and Navy combined. It's enough money that even a small increase in the average patient's bill adds up: The additional diagnoses led to $12 billion in overpayments in 2020, according to an estimate from the group that advises Medicare on payment policies—enough to cover hearing and vision care for every American over 65.
Another estimate, from a former top government health official, suggested the overpayments in 2020 were double that, more than $25 billion.
Citing a KFF study which found that companies typically rake in twice as much gross profit from MA plans as from other types of insurance, the Times pointed out that the growing privatization of Medicare is "strikingly lucrative."
MA plans "can limit patients' choice of doctors, and sometimes require jumping through more hoops before getting certain types of expensive care," the newspaper noted. "But they often have lower premiums or perks like dental benefits—extras that draw beneficiaries to the programs. The more the plans are overpaid by Medicare, the more generous to customers they can afford to be."
"By exploiting and overbilling Medicare, these companies profit off the public. Think of how this money could have been better spent."
The MA program has grown in popularity, including in Democratic strongholds, over the course of four presidential administrations. Meanwhile, regulatory and legislative efforts to rein in abuses have failed to gain traction.
Officials at the Centers for Medicare and Medicaid Services (CMS), some of whom move between the agency and industry, have not been aggressive "even as the overpayments have been described in inspector general investigations, academic research, Government Accountability Office studies, MedPAC reports, and numerous news articles," the Times reported. "Congress gave the agency the power to reduce the insurers' rates in response to evidence of systematic overbilling, but CMS has never chosen to do so."
Ted Doolittle, who served as a senior official for CMS' Center for Program Integrity from 2011 to 2014, said that "it was clear that there was some resistance coming from inside" the agency. "There was foot dragging."
Almost 80% percent of U.S. House members, many of whom are bankrolled by the insurance industry, signed a letter earlier this year indicating their readiness "to protect the program from policies that would undermine" its stability.
David Moore, co-founder of Sludge, an independent news outlet focused on the corrupting influence of corporate cash on politics, observed on social media that "members of the health subcommittee of the House Ways and Means Committee could publicly on whether they think oversight of the insurance industry has been adequate."
However, Moore pointed out, committee Chair Richard Neal (D-Mass.) "has received $3.1 million from the insurance industry, the most in the House."
As the Times noted, "Some critics say the lack of oversight has encouraged the industry to compete over who can most effectively game the system rather than who can provide the best care."
"Medicare Advantage overpayments are a political third rail," Richard Gilfillan, a former hospital and insurance executive and a former top regulator at Medicare, told the newspaper. "The big healthcare plans know it's wrong, and they know how to fix it, but they're making too much money to stop."
"There's a risk" that the increased scrutiny of MA providers "blows over because the program's beneficiaries continue to have access to doctors and hospitals," Joseph Ross, a primary care physician and health policy researcher at the Yale School of Medicine, wrote on Twitter. "But by exploiting and overbilling Medicare, these companies profit off the public."
"Think of how this money could have been better spent," said Ross. "The overbilling alone could have provided hearing and vision care to ALL Medicare beneficiaries, or been used to fund any of these agency's budgets."
"The overbilling alone could have provided hearing and vision care to ALL Medicare beneficiaries."
Despite mounting evidence of widespread fraud in MA plans, the Biden administration announced in April that MA insurers will receive one of the largest payment increases in the program's history in 2023, eliciting pushback from several congressional Democrats led by Rep. Katie Porter of California.
Progressives argue that MA is part of a broader effort to privatize Medicare and must be resisted.
Another major culprit is ACO REACH, a pilot program that critics have described as "Medicare Advantage on steroids."
The pilot—an updated version of Direct Contracting launched by the Trump administration and continued by the Biden administration—invites MA insurers and Wall Street firms to "manage" care for Medicare beneficiaries and allows the profit-maximizing middlemen to pocket as much as 40% of what they don't spend on patients, all but ensuring deadly cost-cutting.
Physicians and healthcare advocates have warned that failing to stop ACO REACH could result in the total privatization of traditional Medicare in a matter of years.
"Even though Medicare is relied on by millions of seniors across the country, and precisely because it is so necessary and cost-effective, it is under threat today from the constant efforts of private insurance companies and for-profit investors who want to privatize it and turn it into yet another shameful opportunity to make money off of peoples' health problems," Rep. Pramila Jayapal (D-Wash.) said in May.
Jayapal, chair of the Congressional Progressive Caucus, has called on the Biden administration to "fully end" ACO REACH and other privatization schemes and urged lawmakers to enact the Medicare for All Act, of which she is lead sponsor in the House.
Numerous studies have found that implementing a single-payer health insurance program would guarantee the provision of lifesaving care for every person in the country while reducing overall spending by as much as $650 billion per year.
"Medicare Advantage shouldn't exist."
The newspaper's analysis of dozens of lawsuits, inspector general reports, and watchdog investigations found that overbilling by Medicare Advantage (MA) providers is so pervasive it exceeds the budgets of entire federal agencies, prompting journalist Ryan Cooper to call the program "a straight up fraud scheme."
Nearly half of Medicare's 60 million beneficiaries are now enrolled in MA plans managed by for-profit insurance companies, and it is expected that most of the nation's seniors will be ensnared in the private-sector alternative to traditional Medicare by next year. Six weeks ago, Sen. Ron Wyden (D-Ore.) launched an inquiry into "potentially deceptive" marketing tactics used by MA providers to "take advantage" of vulnerable individuals.
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Larry Levitt, executive vice president for health policy at Kaiser Family Foundation (KFF), which has has no connection with Kaiser Permanente, wrote on social media that "the move to privatize Medicare" has "been very profitable, in part because insurers are good at making their patients seem sicker."
Journalist Natalie Shure concurred, tweeting: "Privatized Medicare plans cherry pick healthier enrollees, fudge medical records to make them look as sick as possible, coax doctors into tacking on extra sham diagnoses to bill for, and pay themselves a profit on top of it. Medicare Advantage shouldn't exist."
"For all its faults, Medicare is a (nearly) universal program for 65+, with overhead hovering around 2%—far lower than its private counterparts," Shure added. "What inefficiencies did anyone think MA would be solving exactly[?]" she asked.
According to the Times, MA was created by congressional Republicans "two decades ago to encourage health insurers to find innovative ways to provide better care at lower cost."
Matt Bruenig, founder of the People's Policy Project, a left-wing think tank, argued that the notion that private insurers would "provide more benefit for less money" than traditional Medicare "while taking a profit" is insane on its face.
"They innovate on other margins, namely by bending and breaking rules that determine how much money Medicare gives them, as such things are hard to detect," said Bruenig, "and we are now stuck in an endless cat and mouse enforcement game with them."
As the Times reported:
The government pays Medicare Advantage insurers a set amount for each person who enrolls, with higher rates for sicker patients. And the insurers, among the largest and most prosperous American companies, have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment, according to the lawsuits.
As a result, a program devised to help lower health care spending has instead become substantially more costly than the traditional government program it was meant to improve.
[...]
The government now spends nearly as much on Medicare Advantage's 29 million beneficiaries as on the Army and Navy combined. It's enough money that even a small increase in the average patient's bill adds up: The additional diagnoses led to $12 billion in overpayments in 2020, according to an estimate from the group that advises Medicare on payment policies—enough to cover hearing and vision care for every American over 65.
Another estimate, from a former top government health official, suggested the overpayments in 2020 were double that, more than $25 billion.
Citing a KFF study which found that companies typically rake in twice as much gross profit from MA plans as from other types of insurance, the Times pointed out that the growing privatization of Medicare is "strikingly lucrative."
MA plans "can limit patients' choice of doctors, and sometimes require jumping through more hoops before getting certain types of expensive care," the newspaper noted. "But they often have lower premiums or perks like dental benefits—extras that draw beneficiaries to the programs. The more the plans are overpaid by Medicare, the more generous to customers they can afford to be."
"By exploiting and overbilling Medicare, these companies profit off the public. Think of how this money could have been better spent."
The MA program has grown in popularity, including in Democratic strongholds, over the course of four presidential administrations. Meanwhile, regulatory and legislative efforts to rein in abuses have failed to gain traction.
Officials at the Centers for Medicare and Medicaid Services (CMS), some of whom move between the agency and industry, have not been aggressive "even as the overpayments have been described in inspector general investigations, academic research, Government Accountability Office studies, MedPAC reports, and numerous news articles," the Times reported. "Congress gave the agency the power to reduce the insurers' rates in response to evidence of systematic overbilling, but CMS has never chosen to do so."
Ted Doolittle, who served as a senior official for CMS' Center for Program Integrity from 2011 to 2014, said that "it was clear that there was some resistance coming from inside" the agency. "There was foot dragging."
Almost 80% percent of U.S. House members, many of whom are bankrolled by the insurance industry, signed a letter earlier this year indicating their readiness "to protect the program from policies that would undermine" its stability.
David Moore, co-founder of Sludge, an independent news outlet focused on the corrupting influence of corporate cash on politics, observed on social media that "members of the health subcommittee of the House Ways and Means Committee could publicly on whether they think oversight of the insurance industry has been adequate."
However, Moore pointed out, committee Chair Richard Neal (D-Mass.) "has received $3.1 million from the insurance industry, the most in the House."
As the Times noted, "Some critics say the lack of oversight has encouraged the industry to compete over who can most effectively game the system rather than who can provide the best care."
"Medicare Advantage overpayments are a political third rail," Richard Gilfillan, a former hospital and insurance executive and a former top regulator at Medicare, told the newspaper. "The big healthcare plans know it's wrong, and they know how to fix it, but they're making too much money to stop."
"There's a risk" that the increased scrutiny of MA providers "blows over because the program's beneficiaries continue to have access to doctors and hospitals," Joseph Ross, a primary care physician and health policy researcher at the Yale School of Medicine, wrote on Twitter. "But by exploiting and overbilling Medicare, these companies profit off the public."
"Think of how this money could have been better spent," said Ross. "The overbilling alone could have provided hearing and vision care to ALL Medicare beneficiaries, or been used to fund any of these agency's budgets."
"The overbilling alone could have provided hearing and vision care to ALL Medicare beneficiaries."
Despite mounting evidence of widespread fraud in MA plans, the Biden administration announced in April that MA insurers will receive one of the largest payment increases in the program's history in 2023, eliciting pushback from several congressional Democrats led by Rep. Katie Porter of California.
Progressives argue that MA is part of a broader effort to privatize Medicare and must be resisted.
Another major culprit is ACO REACH, a pilot program that critics have described as "Medicare Advantage on steroids."
The pilot—an updated version of Direct Contracting launched by the Trump administration and continued by the Biden administration—invites MA insurers and Wall Street firms to "manage" care for Medicare beneficiaries and allows the profit-maximizing middlemen to pocket as much as 40% of what they don't spend on patients, all but ensuring deadly cost-cutting.
Physicians and healthcare advocates have warned that failing to stop ACO REACH could result in the total privatization of traditional Medicare in a matter of years.
"Even though Medicare is relied on by millions of seniors across the country, and precisely because it is so necessary and cost-effective, it is under threat today from the constant efforts of private insurance companies and for-profit investors who want to privatize it and turn it into yet another shameful opportunity to make money off of peoples' health problems," Rep. Pramila Jayapal (D-Wash.) said in May.
Jayapal, chair of the Congressional Progressive Caucus, has called on the Biden administration to "fully end" ACO REACH and other privatization schemes and urged lawmakers to enact the Medicare for All Act, of which she is lead sponsor in the House.
Numerous studies have found that implementing a single-payer health insurance program would guarantee the provision of lifesaving care for every person in the country while reducing overall spending by as much as $650 billion per year.
How to Decimate the Corporate Tax-Avoidance Industry
DEAN BAKER - dc report
August 22, 2022
A Simple Shift in What’s Taxed Would Raise More Money
The Inflation Reduction Act includes a remarkable innovation. Share buybacks will be taxed at a 1% rate. This is a huge deal, not only because it taxes money that was often escaping taxation at the individual level, but it is a move away from basing the corporate income tax on profits, which can be easily manipulated, to taxing returns to shareholders.
It is time for a major and simple overhaul of the corporate income tax system. The main problem with the current system is that it is focused on the wrong target. Instead of taxing corporate profits, we should be taxing stock returns to investors.
The big issue here is that corporate profits are not a well-defined concept. A thousand issues arise in determining profit, all of which depend to a substantial extent on judgment calls by accountants. Depreciation of capital is the most obvious problem, but there are many others.
What’s Visible, What’s Not
While profits are something that we cannot see, returns to shareholders can be easily seen. This is simply the increase in market capitalization, plus whatever money is paid out in dividends. This information is readily available on dozens of financial websites.
Before explaining how this alternative would work, it is worth going through some recent history.
Democrats in Congress were unanimous in opposing the Tax Cut and Jobs Act (TCJA) the Republicans pushed through Congress in 2017. However, there is one aspect of that tax cut law that nearly all Democratic economists would favor: lowering the corporate tax rate in exchange for limiting tax deductions.
Prior to the 2017 tax cut, the corporate income tax rate was 35%. However, few companies paid anything close to this rate. Actual tax collections were typically around 20%-22% of corporate profits.
While the 35% nominal tax rate put the U.S. at the top of OECD countries, our effective tax rate was slightly below the median.
Trump’s Failed Tax Promise
It makes little sense to have a high tax rate that is easily avoided or evaded. This simply encourages companies to spend large amounts of money gaming the system. This gaming is a complete waste from an economic perspective. We have many highly skilled people spending their time finding ways to play tax tricks rather than doing something that is economically productive. This is why almost all economists would prefer to have a lower tax rate that is actually collected.
Unfortunately, the TCJA that Trump signed into law did not deliver on this promise. While it did sharply lower the nominal tax rate—from 35% to 21%—companies still find it easy to avoid paying taxes. In 2019, the overall effective tax rate was just 13.3%, not even close to the posted rate.
Although the Trump administration probably had little interest in actually cutting down on tax avoidance and evasion, the taxation of stock returns gives us a surefire way to accomplish this reform. We simply apply whatever tax rate we are targeting to the returns that shareholders receive in a given year.
Tax Shelter Industry
There is also nothing that corporations can do to hide the returns on their stock unless they want to rip off their shareholders in addition to ripping off the government. If we want to have a 25% corporate income tax, for example, we can simply tax the returns to shareholders at a 25% rate, and we know exactly what we will get. (We could allow averaging, say over five-year periods, to smooth out tax payments.)
In addition to making the corporate income tax more easily collectible, shifting the basis of the tax from reported profits to returns to shareholders will radically reduce the size of the tax shelter industry. As it stands now, companies spend tens of billions of dollars each year hiring lawyers and accountants to minimize their tax burden.
Fostering Inequality
These expenditures on tax dodges are a complete waste of resources and undermine the purpose of the corporate income tax. As the Modern Monetary Theory crew reminds us, the purpose of taxes at the national level is to reduce demand in the economy. Insofar as companies spend large amounts of money trying to avoid paying taxes, the goal of the corporate income tax is undermined.
The tax avoidance industry is also a major source of inequality. Creative tax lawyers and accountants can make huge salaries by developing innovative tax dodges. We can put many of these people out of business by basing the corporate income tax on stock returns, which are completely transparent.
Conjuring Numbers
The taxation of share buybacks in the Inflation Reduction Act is a small but important step in this direction.
It shows that we do not have to use profit as the basis for the corporate income tax. After it has been in place for a few years, and we have the opportunity to see how effective it is in raising revenue, perhaps we can shift the basis for the rest of the corporate income tax to the stock returns we can all see, rather than the profit statements that are conjured up by accountants.
The Inflation Reduction Act includes a remarkable innovation. Share buybacks will be taxed at a 1% rate. This is a huge deal, not only because it taxes money that was often escaping taxation at the individual level, but it is a move away from basing the corporate income tax on profits, which can be easily manipulated, to taxing returns to shareholders.
It is time for a major and simple overhaul of the corporate income tax system. The main problem with the current system is that it is focused on the wrong target. Instead of taxing corporate profits, we should be taxing stock returns to investors.
The big issue here is that corporate profits are not a well-defined concept. A thousand issues arise in determining profit, all of which depend to a substantial extent on judgment calls by accountants. Depreciation of capital is the most obvious problem, but there are many others.
What’s Visible, What’s Not
While profits are something that we cannot see, returns to shareholders can be easily seen. This is simply the increase in market capitalization, plus whatever money is paid out in dividends. This information is readily available on dozens of financial websites.
Before explaining how this alternative would work, it is worth going through some recent history.
Democrats in Congress were unanimous in opposing the Tax Cut and Jobs Act (TCJA) the Republicans pushed through Congress in 2017. However, there is one aspect of that tax cut law that nearly all Democratic economists would favor: lowering the corporate tax rate in exchange for limiting tax deductions.
Prior to the 2017 tax cut, the corporate income tax rate was 35%. However, few companies paid anything close to this rate. Actual tax collections were typically around 20%-22% of corporate profits.
While the 35% nominal tax rate put the U.S. at the top of OECD countries, our effective tax rate was slightly below the median.
Trump’s Failed Tax Promise
It makes little sense to have a high tax rate that is easily avoided or evaded. This simply encourages companies to spend large amounts of money gaming the system. This gaming is a complete waste from an economic perspective. We have many highly skilled people spending their time finding ways to play tax tricks rather than doing something that is economically productive. This is why almost all economists would prefer to have a lower tax rate that is actually collected.
Unfortunately, the TCJA that Trump signed into law did not deliver on this promise. While it did sharply lower the nominal tax rate—from 35% to 21%—companies still find it easy to avoid paying taxes. In 2019, the overall effective tax rate was just 13.3%, not even close to the posted rate.
Although the Trump administration probably had little interest in actually cutting down on tax avoidance and evasion, the taxation of stock returns gives us a surefire way to accomplish this reform. We simply apply whatever tax rate we are targeting to the returns that shareholders receive in a given year.
Tax Shelter Industry
There is also nothing that corporations can do to hide the returns on their stock unless they want to rip off their shareholders in addition to ripping off the government. If we want to have a 25% corporate income tax, for example, we can simply tax the returns to shareholders at a 25% rate, and we know exactly what we will get. (We could allow averaging, say over five-year periods, to smooth out tax payments.)
In addition to making the corporate income tax more easily collectible, shifting the basis of the tax from reported profits to returns to shareholders will radically reduce the size of the tax shelter industry. As it stands now, companies spend tens of billions of dollars each year hiring lawyers and accountants to minimize their tax burden.
Fostering Inequality
These expenditures on tax dodges are a complete waste of resources and undermine the purpose of the corporate income tax. As the Modern Monetary Theory crew reminds us, the purpose of taxes at the national level is to reduce demand in the economy. Insofar as companies spend large amounts of money trying to avoid paying taxes, the goal of the corporate income tax is undermined.
The tax avoidance industry is also a major source of inequality. Creative tax lawyers and accountants can make huge salaries by developing innovative tax dodges. We can put many of these people out of business by basing the corporate income tax on stock returns, which are completely transparent.
Conjuring Numbers
The taxation of share buybacks in the Inflation Reduction Act is a small but important step in this direction.
It shows that we do not have to use profit as the basis for the corporate income tax. After it has been in place for a few years, and we have the opportunity to see how effective it is in raising revenue, perhaps we can shift the basis for the rest of the corporate income tax to the stock returns we can all see, rather than the profit statements that are conjured up by accountants.
PFAS
‘They all knew’: textile company misled regulators about use of toxic PFAS, documents show
Thousands more residents outside the original contamination zone may be drinking tainted water
Tom Perkins - the guardians
Fri 5 Aug 2022 05.00 EDT
A French industrial fabric producer that poisoned drinking water supplies with PFAS “forever chemicals” across 65 sq miles (168 sq km) of southern New Hampshire misled regulators about the amount of toxic substance it used, a group of state lawmakers and public health advocates charge.
The company, Saint Gobain, now admits it used far more PFAS than regulators previously knew, and officials fear thousands more residents outside the contamination zone’s boundaries may be drinking tainted water in a region plagued by cancer clusters and other health problems thought to stem from PFAS pollution.
Saint Gobain in 2018 agreed to provide clean drinking water in the 65-sq-mile area as part of a consent agreement with New Hampshire regulators, and damning evidence suggesting it used more PFAS than previously admitted surfaced in a trove of documents released in a separate class-action lawsuit.
“People are sick, there are really high cancer rates and people literally have died, so when you see what’s happening and the company acts like this – it’s really upsetting,” said Mindi Messmer, a former state representative who analyzed the documents and sent them to the New Hampshire attorney general and state regulators.
Saint Gobain has denied wrongdoing. PFAS, or per- and polyfluoroalkyl substances, are a class of about 12,000 chemicals used across dozens of industries to make products resist water, stains and heat. The highly toxic compounds don’t naturally break down, and are linked to cancer, thyroid disease, kidney problems, decreased immunity, birth defects and other serious health problems. They have been called “forever chemicals” due to their longevity in the environment.
Saint Gobain Performance Plastics’ Merrimack, New Hampshire, plant had for decades treated its products with PFOA, one type of PFAS, to make them stronger. The company released PFOA from its smokestacks and the chemicals, once on the ground, moved through the soil and into aquifers. Hundreds of residential and municipal wells pull from the groundwater.
As the company and New Hampshire department of environmental services (DES) negotiated the 2018 consent agreement, company officials repeatedly said they didn’t use pure PFOA, or didn’t have a record of using it, but instead used a diluted PFOA mixture of which the toxic chemical only comprised about 2%.
In a 2016 letter to state regulators, Saint Gobain wrote that it “never used [pure PFOA] as a raw material at any point in time” in Merrimack, and in 2014 told the EPA it “is not and never has been a … user of PFOA per se anywhere in the United States.”
The diluted PFOA wouldn’t spread as widely as pure PFOA, and the modeling that determined the boundaries within which Saint Gobain would be responsible for providing clean drinking water supplies and remediating contamination was developed with the diluted solution as an input.
But the documents released as part of the lawsuit show Saint Gobain knew it used pure PFOA years before the consent decree.
Among the evidence are 2003 emails between company employees explicitly stating the Merrimack facility treated its fabric with pure PFOA. Meanwhile, a former Saint Gobain attorney who is now whistleblowing testified that sales records from 3M, which sold PFOA to Saint Gobain, show the company bought “hundreds if not thousands” of pounds of pure PFOA. The 3M sales records are under seal in the class-action suit.
And a salesman for DuPont, which also sold PFAS products to Saint Gobain, last year testified that he had “learned that they were using [pure PFOA] … and adding it to our products”.
The modeling used to develop the original contamination zone’s boundaries is “fundamentally flawed” because it did not account for the pure PFOA, an engineer hired by Saint Gobain testified in February.
Saint Gobain no longer denies that it used pure PFOA; however, in a statement to the Guardian, the company wrote it “vehemently denies any allegation it withheld data, or misled, the New Hampshire Department of Environmental Services”. The information was “not new” because it was in 90,000 documents it gave the DES since 2016, the company wrote.
Messmer said she’s skeptical of that explanation: “If you throw 90,000 papers at someone, is that really notifying them?”
In response to a follow-up question about why it developed the consent decree modeling assuming diluted PFOA instead of pure PFOA, the company said the type of PFOA was only “one factor considered in setting the boundaries”.
In their July letter to the attorney general’s office and DES, Messmer and other lawmakers asked for an investigation and to expand the boundaries of the contamination zone. The state has “sound legal basis to hold Saint Gobain fully accountable for their pollution, including beyond the current [boundary]”, the letter reads. The attorney general’s office told the Guardian it is reviewing the documents while the DES did not immediately respond to a request for comment.
Some are also frustrated with the DES. Documents show it knew it didn’t have Saint Gobain’s complete PFAS purchase records from before 2004, but still entered into the consent agreement.
“The regulatory agency is broken, and I’m really angry with the state departments that are supposed to be there to protect the environment and residents,” said Laurene Allen, a Merrimack resident and clean water activist. “Think of the harm that could have been prevented.”
The documents reveal a company executive stating in 2006 that Saint Gobain “ought to downplay the potential health risks” of PFOA relative to other PFAS, and argue there are “no proven” health risks. But a 1995 company memo shows management had issued a decree to stop using PFOA “because of its toxicity and long half-life”.
The company had also in 2006 conducted blood tests for PFOA on its employees but the results remain under seal, and the plant’s previous owner in 1980 investigated why its male employees were experiencing impotence and “polymer fever”.
“They all knew,” Messmer said.
The company, Saint Gobain, now admits it used far more PFAS than regulators previously knew, and officials fear thousands more residents outside the contamination zone’s boundaries may be drinking tainted water in a region plagued by cancer clusters and other health problems thought to stem from PFAS pollution.
Saint Gobain in 2018 agreed to provide clean drinking water in the 65-sq-mile area as part of a consent agreement with New Hampshire regulators, and damning evidence suggesting it used more PFAS than previously admitted surfaced in a trove of documents released in a separate class-action lawsuit.
“People are sick, there are really high cancer rates and people literally have died, so when you see what’s happening and the company acts like this – it’s really upsetting,” said Mindi Messmer, a former state representative who analyzed the documents and sent them to the New Hampshire attorney general and state regulators.
Saint Gobain has denied wrongdoing. PFAS, or per- and polyfluoroalkyl substances, are a class of about 12,000 chemicals used across dozens of industries to make products resist water, stains and heat. The highly toxic compounds don’t naturally break down, and are linked to cancer, thyroid disease, kidney problems, decreased immunity, birth defects and other serious health problems. They have been called “forever chemicals” due to their longevity in the environment.
Saint Gobain Performance Plastics’ Merrimack, New Hampshire, plant had for decades treated its products with PFOA, one type of PFAS, to make them stronger. The company released PFOA from its smokestacks and the chemicals, once on the ground, moved through the soil and into aquifers. Hundreds of residential and municipal wells pull from the groundwater.
As the company and New Hampshire department of environmental services (DES) negotiated the 2018 consent agreement, company officials repeatedly said they didn’t use pure PFOA, or didn’t have a record of using it, but instead used a diluted PFOA mixture of which the toxic chemical only comprised about 2%.
In a 2016 letter to state regulators, Saint Gobain wrote that it “never used [pure PFOA] as a raw material at any point in time” in Merrimack, and in 2014 told the EPA it “is not and never has been a … user of PFOA per se anywhere in the United States.”
The diluted PFOA wouldn’t spread as widely as pure PFOA, and the modeling that determined the boundaries within which Saint Gobain would be responsible for providing clean drinking water supplies and remediating contamination was developed with the diluted solution as an input.
But the documents released as part of the lawsuit show Saint Gobain knew it used pure PFOA years before the consent decree.
Among the evidence are 2003 emails between company employees explicitly stating the Merrimack facility treated its fabric with pure PFOA. Meanwhile, a former Saint Gobain attorney who is now whistleblowing testified that sales records from 3M, which sold PFOA to Saint Gobain, show the company bought “hundreds if not thousands” of pounds of pure PFOA. The 3M sales records are under seal in the class-action suit.
And a salesman for DuPont, which also sold PFAS products to Saint Gobain, last year testified that he had “learned that they were using [pure PFOA] … and adding it to our products”.
The modeling used to develop the original contamination zone’s boundaries is “fundamentally flawed” because it did not account for the pure PFOA, an engineer hired by Saint Gobain testified in February.
Saint Gobain no longer denies that it used pure PFOA; however, in a statement to the Guardian, the company wrote it “vehemently denies any allegation it withheld data, or misled, the New Hampshire Department of Environmental Services”. The information was “not new” because it was in 90,000 documents it gave the DES since 2016, the company wrote.
Messmer said she’s skeptical of that explanation: “If you throw 90,000 papers at someone, is that really notifying them?”
In response to a follow-up question about why it developed the consent decree modeling assuming diluted PFOA instead of pure PFOA, the company said the type of PFOA was only “one factor considered in setting the boundaries”.
In their July letter to the attorney general’s office and DES, Messmer and other lawmakers asked for an investigation and to expand the boundaries of the contamination zone. The state has “sound legal basis to hold Saint Gobain fully accountable for their pollution, including beyond the current [boundary]”, the letter reads. The attorney general’s office told the Guardian it is reviewing the documents while the DES did not immediately respond to a request for comment.
Some are also frustrated with the DES. Documents show it knew it didn’t have Saint Gobain’s complete PFAS purchase records from before 2004, but still entered into the consent agreement.
“The regulatory agency is broken, and I’m really angry with the state departments that are supposed to be there to protect the environment and residents,” said Laurene Allen, a Merrimack resident and clean water activist. “Think of the harm that could have been prevented.”
The documents reveal a company executive stating in 2006 that Saint Gobain “ought to downplay the potential health risks” of PFOA relative to other PFAS, and argue there are “no proven” health risks. But a 1995 company memo shows management had issued a decree to stop using PFOA “because of its toxicity and long half-life”.
The company had also in 2006 conducted blood tests for PFOA on its employees but the results remain under seal, and the plant’s previous owner in 1980 investigated why its male employees were experiencing impotence and “polymer fever”.
“They all knew,” Messmer said.
How Medicare Advantage Scammers Get Away With It
Buying a Medicare Advantage policy is a leap in the dark, and the federal government generally is not there to catch you: forewarned is forearmed
Thom Hartmann
6/14/2022
In my multiple writings on the Medicare Advantage scam, the most common two responses I get (besides, “Thanks, you may have saved my life!”) are, “I’ve never had a problem with my Advantage plan,” and “If it’s so bad, how come so few people are saying so?”
Both are honest, good-faith questions and highlight how easy it is for insurance companies to get away with their Medicare Advantage scams. The answer to both boils down to the unique nature of insurance being the only “product” we buy where we have no idea if it’s any good until something bad happens — which can take years.
Every state in the union has an insurance commissioner. But why?
Why would any state go to the trouble and expense of creating a new layer of bureaucracy?
We don’t have “auto dealership commissioners” or “big-box retailer commissioners”: only insurance has an elected or appointed overseer.
Why would a state want to elect or appoint a very well-paid person to a new position in state government? Why would they appropriate money for a staff, for offices, in some cases even for buildings for a state insurance commissioner?
It turns out the answer is quite simple. One of the easiest scams in the history of scams, going all the way back centuries before Alfred Ponzi set up shop in Pie Alley, is done with insurance.
Here’s how it works.
If you have insurance, you send them a check every month. You think you’re covered and they’ll be there for you when you need them.
But you have no way of knowing if they’ll really be there for you when you need them because you’ve never used the service in a real health crisis.
It’s completely different from going to the store and buying a toaster. When you get home, you plug it in, and you know right away if it works or not.
Insurance, on the other hand, is the only “product” in existence where you buy it but have no idea if it really works and will be there for you until years later when you need it — and then it’s too late to do anything about it.
Because of this, thousands of insurance schemes and scams were run across the United States, particularly during the late 19th and early 20th century.
In almost every case they sold policies but after a year or two simply closed up shop and moved to some other town taking all the money with them.
If it was life insurance, nobody had died during that time. If it was home fire insurance, nobody’s house caught on fire. If it was theft insurance, nobody who was insured got robbed.
And even if somebody did have a claim in one of those categories, paying it would’ve been a relatively small expense relative to all the money that had been collected before they fled the state.
Insurance was such an easy and lucrative way to commit fraud that state after state decided that anybody selling it would have to be licensed and there would have to be an entire level of state bureaucracy to make sure that the insurance companies weren’t ripping people off.
Medicare advantage or Medicare part C has now become a variation on that kind of 19th century scam, as I document in detail in The Hidden History of American Healthcare: Why Sickness Bankrupts You and Makes Others Insanely Rich.
This privatized insurance deceptively sold under the Medicare name (thanks, George W. Bush) allows the corporations that sell it to challenge every single doctor’s recommendation, drug, procedure, or surgery, and also refuse to pay for doctors or hospitalizations that are “out of network.”
They get away with it because when people choose to sign up for Medicare Advantage at 65 they’re typically not sick. They have no idea all the hassles, hoops, and troubles they might have to jump through when they do get sick, have an accident, or otherwise need medical assistance.
And since the last three years of life are typically the most expensive years for healthcare, the insurance denials are more likely to happen then — long after the person’s signed up with the Advantage company.
So it takes a few years for people to figure out how badly they got screwed by not going with regular Medicare but instead putting themselves in the hands of private insurance companies.
The New York Times did an exposé of the problem earlier this year, in an article titled “Medicare Advantage Plans Often Deny Needed Care, Federal Report Finds.” It tells the story of “Kurt Pauker, an 87-year-old Holocaust survivor in Indianapolis” who’d bought an Advantage policy from Humana:
“In spite of recommendations from Mr. Pauker’s doctors, his family said, Humana has repeatedly denied authorization for inpatient rehabilitation after hospitalization, saying at times he was too healthy and at times too ill to benefit.”
This is not at all uncommon, the Times notes:
“Tens of millions of denials are issued each year for both authorization and reimbursements, and audits of the private insurers show evidence of ‘widespread and persistent problems related to inappropriate denials of services and payment,’ the investigators found.”
If you have “real” Medicare with a heavily regulated Medigap policy to cover the 20% Medicare doesn’t, you never have to worry.
Your bills get paid, you can use any doctor or hospital in the country who takes Medicare, and neither Medicare nor your Medigap provider will ever try to collect from you or force you to pay for what you thought was covered.
Neither you or your doctor will ever have to do the “pre-authorization” dance with real Medicare: those terrible experiences are part of the past.
But if you have Medicare Advantage — which is not Medicare, but privatized insurance that came about because of George W. Bush’s 2003 law to privatize Medicare — you’re on your own.
As the Times laid out:
“About 18 percent of [Advantage] payments were denied despite meeting Medicare coverage rules, an estimated 1.5 million payments for all of 2019. In some cases, plans ignored prior authorizations or other documentation necessary to support the payment. These denials may delay or even prevent a Medicare Advantage beneficiary from getting needed care…”
Buying a Medicare Advantage policy is a leap in the dark, and the federal government generally is not there to catch you. And it’s all perfectly legal, thanks to Bush’s 2003 law, so your state insurance commissioner usually can’t or won’t help.
And don’t even bother fantasizing that Joe Namath or another of the well-paid hustlers will be there for you: they don’t even disclose in their TV ads that if you sign up for Advantage and hold the policy for more than a year it can be extraordinarily difficult to get back on “real” Medicare or buy a Medigap policy.
Forewarned is forearmed.
Both are honest, good-faith questions and highlight how easy it is for insurance companies to get away with their Medicare Advantage scams. The answer to both boils down to the unique nature of insurance being the only “product” we buy where we have no idea if it’s any good until something bad happens — which can take years.
Every state in the union has an insurance commissioner. But why?
Why would any state go to the trouble and expense of creating a new layer of bureaucracy?
We don’t have “auto dealership commissioners” or “big-box retailer commissioners”: only insurance has an elected or appointed overseer.
Why would a state want to elect or appoint a very well-paid person to a new position in state government? Why would they appropriate money for a staff, for offices, in some cases even for buildings for a state insurance commissioner?
It turns out the answer is quite simple. One of the easiest scams in the history of scams, going all the way back centuries before Alfred Ponzi set up shop in Pie Alley, is done with insurance.
Here’s how it works.
If you have insurance, you send them a check every month. You think you’re covered and they’ll be there for you when you need them.
But you have no way of knowing if they’ll really be there for you when you need them because you’ve never used the service in a real health crisis.
It’s completely different from going to the store and buying a toaster. When you get home, you plug it in, and you know right away if it works or not.
Insurance, on the other hand, is the only “product” in existence where you buy it but have no idea if it really works and will be there for you until years later when you need it — and then it’s too late to do anything about it.
Because of this, thousands of insurance schemes and scams were run across the United States, particularly during the late 19th and early 20th century.
In almost every case they sold policies but after a year or two simply closed up shop and moved to some other town taking all the money with them.
If it was life insurance, nobody had died during that time. If it was home fire insurance, nobody’s house caught on fire. If it was theft insurance, nobody who was insured got robbed.
And even if somebody did have a claim in one of those categories, paying it would’ve been a relatively small expense relative to all the money that had been collected before they fled the state.
Insurance was such an easy and lucrative way to commit fraud that state after state decided that anybody selling it would have to be licensed and there would have to be an entire level of state bureaucracy to make sure that the insurance companies weren’t ripping people off.
Medicare advantage or Medicare part C has now become a variation on that kind of 19th century scam, as I document in detail in The Hidden History of American Healthcare: Why Sickness Bankrupts You and Makes Others Insanely Rich.
This privatized insurance deceptively sold under the Medicare name (thanks, George W. Bush) allows the corporations that sell it to challenge every single doctor’s recommendation, drug, procedure, or surgery, and also refuse to pay for doctors or hospitalizations that are “out of network.”
They get away with it because when people choose to sign up for Medicare Advantage at 65 they’re typically not sick. They have no idea all the hassles, hoops, and troubles they might have to jump through when they do get sick, have an accident, or otherwise need medical assistance.
And since the last three years of life are typically the most expensive years for healthcare, the insurance denials are more likely to happen then — long after the person’s signed up with the Advantage company.
So it takes a few years for people to figure out how badly they got screwed by not going with regular Medicare but instead putting themselves in the hands of private insurance companies.
The New York Times did an exposé of the problem earlier this year, in an article titled “Medicare Advantage Plans Often Deny Needed Care, Federal Report Finds.” It tells the story of “Kurt Pauker, an 87-year-old Holocaust survivor in Indianapolis” who’d bought an Advantage policy from Humana:
“In spite of recommendations from Mr. Pauker’s doctors, his family said, Humana has repeatedly denied authorization for inpatient rehabilitation after hospitalization, saying at times he was too healthy and at times too ill to benefit.”
This is not at all uncommon, the Times notes:
“Tens of millions of denials are issued each year for both authorization and reimbursements, and audits of the private insurers show evidence of ‘widespread and persistent problems related to inappropriate denials of services and payment,’ the investigators found.”
If you have “real” Medicare with a heavily regulated Medigap policy to cover the 20% Medicare doesn’t, you never have to worry.
Your bills get paid, you can use any doctor or hospital in the country who takes Medicare, and neither Medicare nor your Medigap provider will ever try to collect from you or force you to pay for what you thought was covered.
Neither you or your doctor will ever have to do the “pre-authorization” dance with real Medicare: those terrible experiences are part of the past.
But if you have Medicare Advantage — which is not Medicare, but privatized insurance that came about because of George W. Bush’s 2003 law to privatize Medicare — you’re on your own.
As the Times laid out:
“About 18 percent of [Advantage] payments were denied despite meeting Medicare coverage rules, an estimated 1.5 million payments for all of 2019. In some cases, plans ignored prior authorizations or other documentation necessary to support the payment. These denials may delay or even prevent a Medicare Advantage beneficiary from getting needed care…”
Buying a Medicare Advantage policy is a leap in the dark, and the federal government generally is not there to catch you. And it’s all perfectly legal, thanks to Bush’s 2003 law, so your state insurance commissioner usually can’t or won’t help.
And don’t even bother fantasizing that Joe Namath or another of the well-paid hustlers will be there for you: they don’t even disclose in their TV ads that if you sign up for Advantage and hold the policy for more than a year it can be extraordinarily difficult to get back on “real” Medicare or buy a Medigap policy.
Forewarned is forearmed.
RIGHT-WING GROUPS OPPOSED TO GOVERNMENT AID CASHED IN WHILE COLLECTING PPP LOANS
Prager University Foundation, the Ayn Rand Institute, and Americans for Tax Reform saw gains while on government aid in 2020, according to new research.
Akela Lacy - the intercept
December 21 2021
“GOVERNMENT SPENDING IS a HUGE problem,” the conservative video site PragerU tweeted in September 2019. “We must reinvest in Americans by giving them a hand up, not handouts,” the group wrote in another tweet that November with a video of then-Secretary of Housing and Urban Development Ben Carson discussing rehabilitation for incarcerated people titled, “Americans Need A Hand Up, Not Handouts.”
But last year, right-wing groups that have long opposed the concept of increased government spending on “handouts” were the recipients of more than $1.7 million in Paycheck Protection Program loans while seeing significant increases in contributions or net assets, according to new research from the government watchdog group Accountable.US. Last April, the Small Business Administration launched the $349 billion emergency loan program to help small businesses struggling at the onset of the Covid-19 pandemic.
PPP loans to Prager University Foundation, the Ayn Rand Institute, and Americans for Tax Reform Foundation were all made public last summer. But recently released 990 forms for 2020 show that each groups saw significant increases in contributions or net revenue at the same time they received hundreds of thousands of dollars in government subsidies.
“Right-wing groups that wave their finger at federal relief spending for local governments and working families never seem to mind when it benefits them,” Kyle Herrig, president of Accountable.US, said in a statement. “The same people who’ve made careers out of bashing government programs were among the first in line for taxpayer-funded assistance during the COVID-19 crisis — aid intended for struggling mom-and-pop businesses. Their hypocrisy is trumped only by their shamelessness. If these groups were serious about their own purported principles, they’d return that money to the taxpayers.”
AT THE ONSET of the Covid-19 pandemic last year, not long before Prager University Foundation received a PPP loan, Dennis Prager was already at work downplaying the severity of the virus. Videos posted throughout the pandemic by the conservative video site PragerU, which Prager co-founded in 2011, alleged that there was an “orchestrated attack” against the experimental use of hydroxychloroquine, and that the death toll from Covid-19 has been inflated. The group’s YouTube page has 2.9 million subscribers, and it said its videos were viewed more than 1 billion times in 2019.
Prager University Foundation, which hosts PragerU, received more than $704,000 in PPP loans the same year that it saw a 55 percent, $12.3 million increase in contributions from 2019, and a $15 million increase in net worth over the same period. The nonprofit group, founded in 2009, has long criticized the concept of government spending and “handouts.” In October, PragerU published a video titled “The Bankrupting of America,” which criticized former President Donald Trump’s approval of “a massive increase in government spending” during the pandemic, as well as additional spending by President Joe Biden.
The Ayn Rand Institute received more than $713,000 in PPP loans last spring. The group’s mission is “to create a culture whose guiding principles are reason, rational self-interest, individualism and laissez-faire capitalism—a culture in which individuals are free to pursue their own happiness.”
Last May, ARI posted a blog explaining why it was OK to accept government aid despite Rand’s well-known position against such programs. “The CARES Act has created a moral dilemma for those Americans who value freedom,” they wrote. “The pandemic has cost them their jobs, their savings, their businesses. And they blame a significant part of this loss on the government. But because they oppose government handouts, they worry that accepting CARES money would be a breach of integrity. At the Ayn Rand Institute, we are dedicated to philosophic principle. And because we are, we will take any relief money offered us. We will take it unapologetically, because the principle here is: justice.”
ARI reported $7.6 million in contributions last year, a 19 percent increase from 2019. The group reported $1.2 million in gains last year, up from losses of $790,000 in 2019.
Americans for Tax Reform Foundation, the nonprofit wing of Americans for Tax Reform, received more than $290,000 in PPP relief last spring. The group said the loan helped the company avoid layoffs, writing that it is “a legally and financially separate research and educational 501(c)3” that “was badly hurt by the government shutdown.” ATRF’s net assets increased last year by 36 percent or $4.6 million, cutting its 2019 deficit of $17.5 million to $12.9 million. Americans for Tax Reform and its foundation were founded in 1985 by Republican Grover Norquist at former President Ronald Reagan’s request, to oppose all tax increases.
Despite its stated aims, billions of dollars in Paycheck Protection Program loans went to wealthy business owners and not the mom and pop shops they were designed to support. Several such small businesses were denied outright or received less money than they asked for. The PPP program was also accused of shutting out Black small business owners.
But last year, right-wing groups that have long opposed the concept of increased government spending on “handouts” were the recipients of more than $1.7 million in Paycheck Protection Program loans while seeing significant increases in contributions or net assets, according to new research from the government watchdog group Accountable.US. Last April, the Small Business Administration launched the $349 billion emergency loan program to help small businesses struggling at the onset of the Covid-19 pandemic.
PPP loans to Prager University Foundation, the Ayn Rand Institute, and Americans for Tax Reform Foundation were all made public last summer. But recently released 990 forms for 2020 show that each groups saw significant increases in contributions or net revenue at the same time they received hundreds of thousands of dollars in government subsidies.
“Right-wing groups that wave their finger at federal relief spending for local governments and working families never seem to mind when it benefits them,” Kyle Herrig, president of Accountable.US, said in a statement. “The same people who’ve made careers out of bashing government programs were among the first in line for taxpayer-funded assistance during the COVID-19 crisis — aid intended for struggling mom-and-pop businesses. Their hypocrisy is trumped only by their shamelessness. If these groups were serious about their own purported principles, they’d return that money to the taxpayers.”
AT THE ONSET of the Covid-19 pandemic last year, not long before Prager University Foundation received a PPP loan, Dennis Prager was already at work downplaying the severity of the virus. Videos posted throughout the pandemic by the conservative video site PragerU, which Prager co-founded in 2011, alleged that there was an “orchestrated attack” against the experimental use of hydroxychloroquine, and that the death toll from Covid-19 has been inflated. The group’s YouTube page has 2.9 million subscribers, and it said its videos were viewed more than 1 billion times in 2019.
Prager University Foundation, which hosts PragerU, received more than $704,000 in PPP loans the same year that it saw a 55 percent, $12.3 million increase in contributions from 2019, and a $15 million increase in net worth over the same period. The nonprofit group, founded in 2009, has long criticized the concept of government spending and “handouts.” In October, PragerU published a video titled “The Bankrupting of America,” which criticized former President Donald Trump’s approval of “a massive increase in government spending” during the pandemic, as well as additional spending by President Joe Biden.
The Ayn Rand Institute received more than $713,000 in PPP loans last spring. The group’s mission is “to create a culture whose guiding principles are reason, rational self-interest, individualism and laissez-faire capitalism—a culture in which individuals are free to pursue their own happiness.”
Last May, ARI posted a blog explaining why it was OK to accept government aid despite Rand’s well-known position against such programs. “The CARES Act has created a moral dilemma for those Americans who value freedom,” they wrote. “The pandemic has cost them their jobs, their savings, their businesses. And they blame a significant part of this loss on the government. But because they oppose government handouts, they worry that accepting CARES money would be a breach of integrity. At the Ayn Rand Institute, we are dedicated to philosophic principle. And because we are, we will take any relief money offered us. We will take it unapologetically, because the principle here is: justice.”
ARI reported $7.6 million in contributions last year, a 19 percent increase from 2019. The group reported $1.2 million in gains last year, up from losses of $790,000 in 2019.
Americans for Tax Reform Foundation, the nonprofit wing of Americans for Tax Reform, received more than $290,000 in PPP relief last spring. The group said the loan helped the company avoid layoffs, writing that it is “a legally and financially separate research and educational 501(c)3” that “was badly hurt by the government shutdown.” ATRF’s net assets increased last year by 36 percent or $4.6 million, cutting its 2019 deficit of $17.5 million to $12.9 million. Americans for Tax Reform and its foundation were founded in 1985 by Republican Grover Norquist at former President Ronald Reagan’s request, to oppose all tax increases.
Despite its stated aims, billions of dollars in Paycheck Protection Program loans went to wealthy business owners and not the mom and pop shops they were designed to support. Several such small businesses were denied outright or received less money than they asked for. The PPP program was also accused of shutting out Black small business owners.
The 2021 Corporate Rap Sheet
Dirt Diggers Digest
December 16, 2021
After four years of Trump’s regulation bashing, the expectation was that the Biden Administration would adopt a much more aggressive posture toward corporate misconduct.
There have been some encouraging signals, such as those given by Deputy Attorney General Lisa Monaco in an October speech, but few blockbuster federal case resolutions have been announced during the past eleven months.
According to data my colleagues and I have collected for Violation Tracker, no individual company has paid a settlement or fine of $250 million or more to the Biden DOJ. In fact, there have been only two case resolutions of that size announced by any federal agency during this period.
In September, the Securities and Exchange Commission announced a $539 million settlement with entities linked to Chinese businessman Guo Wengui relating to illegal sale of stock and digital assets. That same month, the Office of the Comptroller of the Currency fined Wells Fargo $250 million for ongoing risk management deficiencies.
By contrast, numerous mega-cases have been resolved by state attorneys general. Since last January, they have announced nine settlements of more than $250 million, including five worth $1 billion or more. Those are the giant cases against pharmaceutical manufacturers and distributors for their role in the opioid crisis.
The largest case was the settlement worth an estimated $10 billion with the biggest opiate villain of all, Purdue Pharma, which is now in bankruptcy and will effectively go out of business. Many argue that the Sackler family got off too easy in the case, but the company is paying a substantial price for its misdeeds. The other ten-figure settlements of the year involved McKesson ($8 billion), AmeriSourceBergen ($6.5 billion), Cardinal Health (also $6.5 billion) and Johnson & Johnson ($5 billion). Also substantial was the $573 million settlement McKinsey reached with states over its role in advising opioid producers in improper marketing practices.
There were also significant state settlements on issues other than opioids. Duke Energy signed an $855 settlement with the North Carolina AG relating to coal ash pollution. Boston Scientific Corporation reached a $188 million settlement with a group of states to resolve allegations it engaged in deceptive marketing of a transvaginal surgical mesh device.
While the Biden DOJ has yet to roll out blockbuster cases, it did announce some substanial resolutions during the year. For example, the U.S. Attorney’s Office in Cincinnati announced a $230 million settlement of criminal charges against utility company FirstEnergy for making improper payments to public officials to get them to pursue nuclear power legislation benefiting the company. Taro Pharmaceuticals agreed to pay $213 million to settle price-fixing charges. In a case that also involved UK and Swiss regulators, Credit Suisse paid $175 million to the DOJ to resolve criminal charges relating to a fraudulent project in Mozambique.
The year also saw the resolution of some major class action and multi-district lawsuits against large corporations. After the U.S. Supreme Court declined to hear its appeal of a court verdict, Johnson & Johnson paid more than $2 billion in damages to a group of women who claimed they developed ovarian cancer from using the company’s talcum powder.
Hyundai Motor agreed to pay up to $1.3 billion to settle a consolidated class of claims that it and its subsidiary Kia sold vehicles with defective engines that could catch fire. Facebook paid $650 million to settle a class action over its harvesting of facial data.
Facebook was also at the center of a controversy that not yet been fully resolved by regulatory or court action. A former manager leaked a large collection of internal documents indicating that the company, which now calls itself Meta Platforms, was aware of the harmful effect its services were having on some users, especially younger ones, but did little about it. The revelations prompted widespread criticism among members of Congress but no significant legislation or litigation so far.
Another widely criticized corporation that has yet to face full consequences for its conduct is Amazon.com. The e-commerce behemoth has been reproached for the way it treats employees, the small merchants who make use of its platform, and the communities in which it operates. Yet it continues to expand at a rapid pace and has seen an enormous growth of profits during the pandemic.
During the Facebook disclosures, there was growing speculation as to whether the big tech firms were now facing a situation similar to that of the tobacco companies, which were the subject of their own scandalous revelations and eventually had to pay out many billions of dollars in settlements and sharply curtail their marketing activities.
The key word there is “eventually.” The dangers of smoking were known for decades, yet the big cigarette companies adamantly denied the reality—the same way the fossil fuel companies have denied their role in climate change. We should not expect Meta, Amazon and the other tech giants to give in without a long and bitter fight.
There have been some encouraging signals, such as those given by Deputy Attorney General Lisa Monaco in an October speech, but few blockbuster federal case resolutions have been announced during the past eleven months.
According to data my colleagues and I have collected for Violation Tracker, no individual company has paid a settlement or fine of $250 million or more to the Biden DOJ. In fact, there have been only two case resolutions of that size announced by any federal agency during this period.
In September, the Securities and Exchange Commission announced a $539 million settlement with entities linked to Chinese businessman Guo Wengui relating to illegal sale of stock and digital assets. That same month, the Office of the Comptroller of the Currency fined Wells Fargo $250 million for ongoing risk management deficiencies.
By contrast, numerous mega-cases have been resolved by state attorneys general. Since last January, they have announced nine settlements of more than $250 million, including five worth $1 billion or more. Those are the giant cases against pharmaceutical manufacturers and distributors for their role in the opioid crisis.
The largest case was the settlement worth an estimated $10 billion with the biggest opiate villain of all, Purdue Pharma, which is now in bankruptcy and will effectively go out of business. Many argue that the Sackler family got off too easy in the case, but the company is paying a substantial price for its misdeeds. The other ten-figure settlements of the year involved McKesson ($8 billion), AmeriSourceBergen ($6.5 billion), Cardinal Health (also $6.5 billion) and Johnson & Johnson ($5 billion). Also substantial was the $573 million settlement McKinsey reached with states over its role in advising opioid producers in improper marketing practices.
There were also significant state settlements on issues other than opioids. Duke Energy signed an $855 settlement with the North Carolina AG relating to coal ash pollution. Boston Scientific Corporation reached a $188 million settlement with a group of states to resolve allegations it engaged in deceptive marketing of a transvaginal surgical mesh device.
While the Biden DOJ has yet to roll out blockbuster cases, it did announce some substanial resolutions during the year. For example, the U.S. Attorney’s Office in Cincinnati announced a $230 million settlement of criminal charges against utility company FirstEnergy for making improper payments to public officials to get them to pursue nuclear power legislation benefiting the company. Taro Pharmaceuticals agreed to pay $213 million to settle price-fixing charges. In a case that also involved UK and Swiss regulators, Credit Suisse paid $175 million to the DOJ to resolve criminal charges relating to a fraudulent project in Mozambique.
The year also saw the resolution of some major class action and multi-district lawsuits against large corporations. After the U.S. Supreme Court declined to hear its appeal of a court verdict, Johnson & Johnson paid more than $2 billion in damages to a group of women who claimed they developed ovarian cancer from using the company’s talcum powder.
Hyundai Motor agreed to pay up to $1.3 billion to settle a consolidated class of claims that it and its subsidiary Kia sold vehicles with defective engines that could catch fire. Facebook paid $650 million to settle a class action over its harvesting of facial data.
Facebook was also at the center of a controversy that not yet been fully resolved by regulatory or court action. A former manager leaked a large collection of internal documents indicating that the company, which now calls itself Meta Platforms, was aware of the harmful effect its services were having on some users, especially younger ones, but did little about it. The revelations prompted widespread criticism among members of Congress but no significant legislation or litigation so far.
Another widely criticized corporation that has yet to face full consequences for its conduct is Amazon.com. The e-commerce behemoth has been reproached for the way it treats employees, the small merchants who make use of its platform, and the communities in which it operates. Yet it continues to expand at a rapid pace and has seen an enormous growth of profits during the pandemic.
During the Facebook disclosures, there was growing speculation as to whether the big tech firms were now facing a situation similar to that of the tobacco companies, which were the subject of their own scandalous revelations and eventually had to pay out many billions of dollars in settlements and sharply curtail their marketing activities.
The key word there is “eventually.” The dangers of smoking were known for decades, yet the big cigarette companies adamantly denied the reality—the same way the fossil fuel companies have denied their role in climate change. We should not expect Meta, Amazon and the other tech giants to give in without a long and bitter fight.
J&J is using a bankruptcy maneuver to block lawsuits over baby powder cancer claims
NPR
October 21, 20212:11 PM ET
Johnson & Johnson is drawing criticism after using a controversial bankruptcy maneuver to block roughly 38,000 lawsuits linked to claims that its talc baby powder was contaminated with cancer-causing asbestos.
The health products giant used a quirk of Texas state law to spin off a new company called LTL, then dumped all its asbestos-related liabilities — including the avalanche of lawsuits — into the new firm.
LTL filed for bankruptcy last week in a federal court in Charlotte, N.C., a move designed to sharply limit efforts to recover damages for those who say they were harmed by J&J's baby powder.
"Johnson & Johnson doesn't have this liability anymore. They pushed all of it into the company they created just to file for bankruptcy," said Lindsey Simon, a bankruptcy expert at the University of Georgia School of Law.
As a result, Simon said, "consumers can't recover [damages] against a big solvent company. They have to recover against this smaller fictional company created [by J&J]."
The move sparked outrage from lawmakers and consumer advocates.
"J&J knew asbestos laced some bottles but kept it a secret for decades," Rep. Katie Porter, D-Calif., tweeted on Tuesday. "Tens of thousands of women with ovarian cancer are suing, and the company wants to shield its assets."
In 2018, separate investigations by Reuters and The New York Times revealed documents showing Johnson & Johnson fretted for decades that small amounts of asbestos lurked in its baby powder, without telling regulators.
J&J has repeatedly denied the claim. The company remains one of the wealthiest corporations in the world, with more than $25 billion in cash reserves, and has not filed for bankruptcy.
Johnson & Johnson says the bankruptcy move is legitimate
During a call with investors on Tuesday, J&J CFO Joseph Wolk defended the bankruptcy maneuver and again said its talc baby powder products, discontinued last year, were safe.
"There's an established process that allows companies facing abusive tort systems to resolve claims in an efficient and equitable manner," Wolk said.
"It's really the bankruptcy courts that will ultimately decide this. It's not plaintiff attorneys. It's not Johnson & Johnson," he added.
In a separate statement, LTL said J&J had agreed to provide the new firm with $2 billion, along with other funds, for future payouts linked to baby powder asbestos claims.
"We are confident all parties will be treated equitably during this process," said John Kim, chief legal officer of LTL, in the statement.
But Andrew Birchfield, an attorney with the firm Beasley Allen who represents women who have sued J&J, said this legal maneuver could make it far more difficult for his clients to recover damages.
"Women and families would be devastated, and it would just be a get-out-of-jail-free card for Johnson & Johnson," Birchfield said.
J&J has had a mixed record defending itself against these talc-asbestos lawsuits.
The company has prevailed in many cases, but last year an appeals court in Missouri ordered the firm to pay $2 billion to women who say J&J's talc product caused their ovarian cancer.
Advocates are raising alarms about "bankruptcy grifters"
Critics say this is another instance of a growing trend: corporations and wealthy individuals using bankruptcy to block lawsuits without actually filing for bankruptcy themselves.
"Another giant corporation is abusing our bankruptcy system to shield its assets and evade liability for the harm it has caused people across the country," Sen. Elizabeth Warren, D-Mass., tweeted last week.
The American Association for Justice, a coalition of trial lawyers, also blasted J&J's maneuver and called for legislation to block this kind of legal tactic.
"There are countless Americans suffering from cancer, or mourning the death of a loved one, because of the toxic baby powder that Johnson & Johnson put on the market," the group said in a statement. "Their conduct and now bankruptcy gimmick is as despicable as it is brazen."
In recent months, legal scholars, bipartisan members of Congress and consumer advocacy groups have raised alarms about the use of bankruptcy courts by wealthy and powerful entities seeking to block lawsuits.
Simon, at the University of Georgia, published a widely read paper in the Yale Law Journal in April that described wealthy companies like Johnson & Johnson as "bankruptcy grifters."
She argued such firms and organizations receive the benefits of Chapter 11 protection while "incurring only a fraction of the associated burdens."
Critics also say lax bankruptcy laws allow companies to "venue shop," choosing to file for bankruptcy in federal jurisdictions viewed as friendly to corporations.
In this case, Johnson & Johnson is headquartered in New Jersey, but these legal maneuvers have been executed in North Carolina and Texas.
Similar legal strategies have been used in bankruptcy courts by members of the Sackler family who own OxyContin-maker Purdue Pharma, as well as by the U.S. Olympic Committee and the Boy Scouts of America, which face a barrage of sex abuse-related claims.
Simon said this bankruptcy maneuver offers J&J significant advantages in negotiations that are likely to follow over a final settlement.
But she said the company may still be on the hook for sizable payouts to victims as determined by the bankruptcy court.
"[J&J is] not completely wiping their hands of the issue, and I think probably awareness of how that would be perceived is the reason why," Simon said.
Johnson & Johnson, meanwhile, has asked a federal bankruptcy judge to halt progress on talc-asbestos claims while LTL's bankruptcy filing is under review.
Judge Craig Whitley will hold a hearing on that request on Friday in Charlotte.
The health products giant used a quirk of Texas state law to spin off a new company called LTL, then dumped all its asbestos-related liabilities — including the avalanche of lawsuits — into the new firm.
LTL filed for bankruptcy last week in a federal court in Charlotte, N.C., a move designed to sharply limit efforts to recover damages for those who say they were harmed by J&J's baby powder.
"Johnson & Johnson doesn't have this liability anymore. They pushed all of it into the company they created just to file for bankruptcy," said Lindsey Simon, a bankruptcy expert at the University of Georgia School of Law.
As a result, Simon said, "consumers can't recover [damages] against a big solvent company. They have to recover against this smaller fictional company created [by J&J]."
The move sparked outrage from lawmakers and consumer advocates.
"J&J knew asbestos laced some bottles but kept it a secret for decades," Rep. Katie Porter, D-Calif., tweeted on Tuesday. "Tens of thousands of women with ovarian cancer are suing, and the company wants to shield its assets."
In 2018, separate investigations by Reuters and The New York Times revealed documents showing Johnson & Johnson fretted for decades that small amounts of asbestos lurked in its baby powder, without telling regulators.
J&J has repeatedly denied the claim. The company remains one of the wealthiest corporations in the world, with more than $25 billion in cash reserves, and has not filed for bankruptcy.
Johnson & Johnson says the bankruptcy move is legitimate
During a call with investors on Tuesday, J&J CFO Joseph Wolk defended the bankruptcy maneuver and again said its talc baby powder products, discontinued last year, were safe.
"There's an established process that allows companies facing abusive tort systems to resolve claims in an efficient and equitable manner," Wolk said.
"It's really the bankruptcy courts that will ultimately decide this. It's not plaintiff attorneys. It's not Johnson & Johnson," he added.
In a separate statement, LTL said J&J had agreed to provide the new firm with $2 billion, along with other funds, for future payouts linked to baby powder asbestos claims.
"We are confident all parties will be treated equitably during this process," said John Kim, chief legal officer of LTL, in the statement.
But Andrew Birchfield, an attorney with the firm Beasley Allen who represents women who have sued J&J, said this legal maneuver could make it far more difficult for his clients to recover damages.
"Women and families would be devastated, and it would just be a get-out-of-jail-free card for Johnson & Johnson," Birchfield said.
J&J has had a mixed record defending itself against these talc-asbestos lawsuits.
The company has prevailed in many cases, but last year an appeals court in Missouri ordered the firm to pay $2 billion to women who say J&J's talc product caused their ovarian cancer.
Advocates are raising alarms about "bankruptcy grifters"
Critics say this is another instance of a growing trend: corporations and wealthy individuals using bankruptcy to block lawsuits without actually filing for bankruptcy themselves.
"Another giant corporation is abusing our bankruptcy system to shield its assets and evade liability for the harm it has caused people across the country," Sen. Elizabeth Warren, D-Mass., tweeted last week.
The American Association for Justice, a coalition of trial lawyers, also blasted J&J's maneuver and called for legislation to block this kind of legal tactic.
"There are countless Americans suffering from cancer, or mourning the death of a loved one, because of the toxic baby powder that Johnson & Johnson put on the market," the group said in a statement. "Their conduct and now bankruptcy gimmick is as despicable as it is brazen."
In recent months, legal scholars, bipartisan members of Congress and consumer advocacy groups have raised alarms about the use of bankruptcy courts by wealthy and powerful entities seeking to block lawsuits.
Simon, at the University of Georgia, published a widely read paper in the Yale Law Journal in April that described wealthy companies like Johnson & Johnson as "bankruptcy grifters."
She argued such firms and organizations receive the benefits of Chapter 11 protection while "incurring only a fraction of the associated burdens."
Critics also say lax bankruptcy laws allow companies to "venue shop," choosing to file for bankruptcy in federal jurisdictions viewed as friendly to corporations.
In this case, Johnson & Johnson is headquartered in New Jersey, but these legal maneuvers have been executed in North Carolina and Texas.
Similar legal strategies have been used in bankruptcy courts by members of the Sackler family who own OxyContin-maker Purdue Pharma, as well as by the U.S. Olympic Committee and the Boy Scouts of America, which face a barrage of sex abuse-related claims.
Simon said this bankruptcy maneuver offers J&J significant advantages in negotiations that are likely to follow over a final settlement.
But she said the company may still be on the hook for sizable payouts to victims as determined by the bankruptcy court.
"[J&J is] not completely wiping their hands of the issue, and I think probably awareness of how that would be perceived is the reason why," Simon said.
Johnson & Johnson, meanwhile, has asked a federal bankruptcy judge to halt progress on talc-asbestos claims while LTL's bankruptcy filing is under review.
Judge Craig Whitley will hold a hearing on that request on Friday in Charlotte.
McKinsey Never Told the FDA It Was Working for Opioid Makers While Also Working for the Agency
The consulting giant was helping Purdue Pharma and Johnson & Johnson fend off FDA regulations even as it helped shape FDA drug policy.
by Ian MacDougall for ProPublica
Oct. 4, 5 a.m. EDT
Since 2008, McKinsey & Company has regularly advised the Food and Drug Administration’s drug-regulation division, according to agency records. The consulting giant has had its hand in a range of important FDA projects, from revamping drug-approval processes to implementing new tools for monitoring the pharmaceutical industry.
During that same decade-plus span, as emerged in 2019, McKinsey counted among its clients many of the country’s biggest drug companies — not least those responsible for making, distributing and selling the opioids that have ravaged communities across the United States, such as Purdue Pharma and Johnson & Johnson. At times, McKinsey consultants helped those drugmaker clients fend off costly FDA oversight — even as McKinsey colleagues assigned to the FDA were working to bolster the agency’s regulation of the pharmaceutical market. In one instance, for example, McKinsey consultants helped Purdue and other opioid producers push the FDA to water down a proposed opioid-safety program. The opioid producer ultimately succeeded in weakening the program, even as overdose deaths mounted nationwide.
Yet McKinsey, which is famously secretive about its clientele, never disclosed its pharmaceutical company clients to the FDA, according to the agency. This year ProPublica submitted a Freedom of Information Act request to the FDA seeking records showing that McKinsey had disclosed possible conflicts of interest to the agency’s drug-regulation division as part of contracts spanning more than a decade and worth tens of millions of dollars. The agency responded recently that “after a diligent search of our files, we were unable to locate any records responsive to your request.”
Federal procurement rules require U.S. government agencies to determine whether a contractor has any conflicts of interest. If serious enough, a conflict can disqualify the contractor from working on a given project. McKinsey’s contracts with the FDA, which ProPublica obtained after filing a FOIA lawsuit, contained a standard provision obligating the firm to disclose to agency officials any possible organizational conflicts. One passage reads: “the Contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality because of the appearance or existence of bias.”
Agency officials rely on disclosure to ensure that they have the information they need to consider whether a contractor’s other business relationships risk slanting its judgment. “Contractors have the obligation to disclose potential conflicts, and then the government has an obligation to figure out how to deal with it,” said Jessica Tillipman, an assistant dean and government procurement law expert at George Washington University Law School.
Asked for comment, McKinsey did not assert that it disclosed potential conflicts to the FDA. But a spokesperson for the firm, Neil Grace, nonetheless maintained that “across more than a decade of service to the FDA, we have been fully transparent that we serve pharmaceutical and medical device companies. McKinsey’s work with the FDA helped improve the agency’s effectiveness through organizational, resourcing, business process, operational, digital, and technology improvements. To achieve its mission, the government regularly seeks support from additional experts who understand both the government’s mission and the industries’ practices. We take seriously our commitment to avoid conflicts and to serve the best interests of the FDA.” (McKinsey is a sponsor of ProPublica’s local virtual events programming.)
McKinsey’s failure to disclose its industry engagements deprived the FDA of the opportunity to consider whether, for example, the overlap between McKinsey’s government and pharmaceutical industry projects and the potential financial incentives at play constituted a conflict, experts said.
“For a contractor like McKinsey not to disclose the companies it is working for has all the appeal of the Addams Family on Halloween hiding Uncle Fester in the basement so as not to scare the neighborhood,” said Charles Tiefer, a professor of government contracting at the University of Baltimore Law School.
A spokesperson for the FDA did not respond to requests for comment.
McKinsey’s extensive opioid company consulting eventually began coming to light, starting with a 2019 ProPublica report. The firm’s opioid work has provoked widespread criticism, spawned a welter of lawsuits and led the firm to pay nearly $600 million this year to settle legal claims made by all 50 states, as well as five U.S. territories and the District of Columbia. It also prompted McKinsey to issue a statement in which the firm acknowledged that it “fell short” of its standards in advising opioid makers while also denying that it “sought to increase overdoses or misuse and worsen a public health crisis.” The firm pledged not to work on opioid-related projects going forward.
The lawsuits and public outrage have focused on the consulting firm’s efforts to help increase (or “turbocharge,” in McKinsey’s parlance) sales of Purdue Pharma’s highly addictive flagship opioid, OxyContin. But lately, concerns have begun to emerge about McKinsey’s parallel assignments, which were worth upward of $50 million over about 12 years, for the nation’s primary drug regulator. In a letter to the FDA in August, a bipartisan group of senators led by Sen. Maggie Hassan, D-N.H., asked the regulator to address “potential conflicts of interest that may have arisen” from McKinsey’s work for both the agency and “a wide range of actors in the opioid industry, including many of the companies that played a pivotal role in fueling the opioid epidemic that our country now faces.”
McKinsey, which has focused on counseling the CEOs of leading corporations for much of its nearly 100-year history, began expanding its public-sector practice in the United States around the time of its earliest FDA projects. McKinsey prides itself on its ability to act quickly and with discretion, and in its largely unregulated engagements for corporate clients, there are few impediments to the firm doing so.
In government consulting, however, the rules are far more stringent, and on several recent occasions, the firm has been caught refusing to abide by such strictures, including disclosure rules. Over the past couple of years, for example, McKinsey’s bankruptcy-advisory practice has paid more than $30 million to the Justice Department and one client’s creditors to settle allegations that it failed to disclose potential conflicts, as required by the federal bankruptcy rules. Those allegations also prompted a federal criminal investigation of the firm. McKinsey has denied wrongdoing, and the investigation, which came to light in 2019, has not led to charges.
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The news of McKinsey’s opioid work apparently did little to dampen the FDA’s enthusiasm for the consultancy. In March 2019, just after the news broke, the agency signed a new contract with McKinsey — extending the firm’s multiyear effort to help the FDA “modernize” the process by which it regulates new drugs.
During that same decade-plus span, as emerged in 2019, McKinsey counted among its clients many of the country’s biggest drug companies — not least those responsible for making, distributing and selling the opioids that have ravaged communities across the United States, such as Purdue Pharma and Johnson & Johnson. At times, McKinsey consultants helped those drugmaker clients fend off costly FDA oversight — even as McKinsey colleagues assigned to the FDA were working to bolster the agency’s regulation of the pharmaceutical market. In one instance, for example, McKinsey consultants helped Purdue and other opioid producers push the FDA to water down a proposed opioid-safety program. The opioid producer ultimately succeeded in weakening the program, even as overdose deaths mounted nationwide.
Yet McKinsey, which is famously secretive about its clientele, never disclosed its pharmaceutical company clients to the FDA, according to the agency. This year ProPublica submitted a Freedom of Information Act request to the FDA seeking records showing that McKinsey had disclosed possible conflicts of interest to the agency’s drug-regulation division as part of contracts spanning more than a decade and worth tens of millions of dollars. The agency responded recently that “after a diligent search of our files, we were unable to locate any records responsive to your request.”
Federal procurement rules require U.S. government agencies to determine whether a contractor has any conflicts of interest. If serious enough, a conflict can disqualify the contractor from working on a given project. McKinsey’s contracts with the FDA, which ProPublica obtained after filing a FOIA lawsuit, contained a standard provision obligating the firm to disclose to agency officials any possible organizational conflicts. One passage reads: “the Contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality because of the appearance or existence of bias.”
Agency officials rely on disclosure to ensure that they have the information they need to consider whether a contractor’s other business relationships risk slanting its judgment. “Contractors have the obligation to disclose potential conflicts, and then the government has an obligation to figure out how to deal with it,” said Jessica Tillipman, an assistant dean and government procurement law expert at George Washington University Law School.
Asked for comment, McKinsey did not assert that it disclosed potential conflicts to the FDA. But a spokesperson for the firm, Neil Grace, nonetheless maintained that “across more than a decade of service to the FDA, we have been fully transparent that we serve pharmaceutical and medical device companies. McKinsey’s work with the FDA helped improve the agency’s effectiveness through organizational, resourcing, business process, operational, digital, and technology improvements. To achieve its mission, the government regularly seeks support from additional experts who understand both the government’s mission and the industries’ practices. We take seriously our commitment to avoid conflicts and to serve the best interests of the FDA.” (McKinsey is a sponsor of ProPublica’s local virtual events programming.)
McKinsey’s failure to disclose its industry engagements deprived the FDA of the opportunity to consider whether, for example, the overlap between McKinsey’s government and pharmaceutical industry projects and the potential financial incentives at play constituted a conflict, experts said.
“For a contractor like McKinsey not to disclose the companies it is working for has all the appeal of the Addams Family on Halloween hiding Uncle Fester in the basement so as not to scare the neighborhood,” said Charles Tiefer, a professor of government contracting at the University of Baltimore Law School.
A spokesperson for the FDA did not respond to requests for comment.
McKinsey’s extensive opioid company consulting eventually began coming to light, starting with a 2019 ProPublica report. The firm’s opioid work has provoked widespread criticism, spawned a welter of lawsuits and led the firm to pay nearly $600 million this year to settle legal claims made by all 50 states, as well as five U.S. territories and the District of Columbia. It also prompted McKinsey to issue a statement in which the firm acknowledged that it “fell short” of its standards in advising opioid makers while also denying that it “sought to increase overdoses or misuse and worsen a public health crisis.” The firm pledged not to work on opioid-related projects going forward.
The lawsuits and public outrage have focused on the consulting firm’s efforts to help increase (or “turbocharge,” in McKinsey’s parlance) sales of Purdue Pharma’s highly addictive flagship opioid, OxyContin. But lately, concerns have begun to emerge about McKinsey’s parallel assignments, which were worth upward of $50 million over about 12 years, for the nation’s primary drug regulator. In a letter to the FDA in August, a bipartisan group of senators led by Sen. Maggie Hassan, D-N.H., asked the regulator to address “potential conflicts of interest that may have arisen” from McKinsey’s work for both the agency and “a wide range of actors in the opioid industry, including many of the companies that played a pivotal role in fueling the opioid epidemic that our country now faces.”
McKinsey, which has focused on counseling the CEOs of leading corporations for much of its nearly 100-year history, began expanding its public-sector practice in the United States around the time of its earliest FDA projects. McKinsey prides itself on its ability to act quickly and with discretion, and in its largely unregulated engagements for corporate clients, there are few impediments to the firm doing so.
In government consulting, however, the rules are far more stringent, and on several recent occasions, the firm has been caught refusing to abide by such strictures, including disclosure rules. Over the past couple of years, for example, McKinsey’s bankruptcy-advisory practice has paid more than $30 million to the Justice Department and one client’s creditors to settle allegations that it failed to disclose potential conflicts, as required by the federal bankruptcy rules. Those allegations also prompted a federal criminal investigation of the firm. McKinsey has denied wrongdoing, and the investigation, which came to light in 2019, has not led to charges.
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The news of McKinsey’s opioid work apparently did little to dampen the FDA’s enthusiasm for the consultancy. In March 2019, just after the news broke, the agency signed a new contract with McKinsey — extending the firm’s multiyear effort to help the FDA “modernize” the process by which it regulates new drugs.
CORPORATE CRIMINALS!!!
COMPANIES LOBBYING AGAINST INFRASTRUCTURE TAX INCREASES HAVE AVOIDED PAYING BILLIONS IN TAXES
Executives at JPMorgan Chase, FedEx, and others have spoken out publicly against Biden’s proposed tax increases.
Akela Lacy - THE INTERCEPT
September 6 2021,
AN INFRASTRUCTURE PROPOSAL that would raise the corporate tax rate is facing opposition in Congress from companies that have dodged tens of billions of dollars in taxes over the last decade. Several such companies are lobbying against corporate tax increases and measures designed to crack down on tax havens in President Joe Biden’s economic proposal.
Biden’s American Jobs Plan would raise the corporate tax rate to 28 percent to help fund projects to rebuild highways and roads, expand high-speed broadband, build and renovate schools, and expand and upgrade power lines. Meanwhile, his American Families Plan would allocate $1.8 trillion over 10 years for education, child care, and national paid leave. To help fund those programs, he proposed a 39.6 percent capital gains tax for millionaires — almost double the current rate of 23.8 percent — and an increase in the marginal income tax rate for the top 1 percent, from 37 percent to 39.6 percent.
Companies that use such practices to avoid taxes and lobbied earlier this year on issues related to tax rates in Biden’s American Jobs Plan include Walmart, Oracle, Accenture, Bristol Myers Squibb, Shell, and Walgreens, according to an analysis by Accountable.US, a nonpartisan watchdog group focused on public corruption. Executives at companies that have historically avoided paying taxes, like Johnson & Johnson, JPMorgan Chase, FedEx, and DuPont, have spoken out publicly against Biden’s proposed tax increases.
Shell and Walgreens lobbied earlier this year on corporate tax issues in the American Jobs Plan. Walmart hired a lobbying firm tasked with “monitoring of tax proposals related to infrastructure” in the plan and proposed legislative efforts related to Donald Trump’s 2017 tax cuts. Accenture hired another firm to “monitor the American Jobs Plan as it relates to corporate taxes.” Oracle and Bristol Myers Squibb, a multinational pharmaceutical company, used the same firm hired by Accenture to monitor and lobby on similar issues in the proposal. Oracle also used that firm to monitor the American Rescue Plan, Biden’s first Covid-19 relief package, for provisions related to corporate taxes. Oracle spokesperson Jessica Moore said the company “has not lobbied on Corporate Tax issues since the new Administration.”
Nonprofit and media reports in recent years have found that those companies are among dozens of multinational corporations that have avoided tens of billions of dollars in taxes in recent years, and have used a variety of tax evasion mechanisms both in the U.S. and overseas, leading some to face fines and even criminal charges.
A Reuters report last year found that from 2018 to 2019, Shell reported $2.7 billion through offshore tax havens and avoided paying hundreds of millions of dollars in taxes. In 2019, Australia charged Shell $755 million for six years’ worth of taxes the company did not pay. The company reported that after getting tax refunds related to the closure of oil platforms, it paid no corporate income tax in the U.K. in 2018 on $731 million in profits. In 2013, India alleged that Shell had evaded taxes by underpricing a transfer of shares in 2009 by $2.8 billion.
A 2016 report from the U.S. Public Interest Research Group, Citizens for Tax Justice, and the Institute on Taxation and Economic Policy found that Bristol Myers Squibb held $25 billion across 23 tax haven subsidiaries. In 2012 the company set up a tax haven subsidiary in Ireland, which the IRS later described as an “abusive” tax shelter that could allow the company to avoid paying $1.4 billion in taxes.
Between 2008 and 2014, Walmart held more than $23.3 billion in offshore accounts and avoided paying more than $4.59 billion in U.S. taxes, according to a 2016 Oxfam report. In an arrangement internally known as “Project Flex,” the company routed money through an allegedly fictitious Chinese subsidiary, Quartz reported, which allowed it to avoid paying $2.6 billion in U.S. taxes between 2014 and 2017. The 2016 report from the U.S. PIRG, CTJ, and ITEP also found that Walmart reported zero tax haven subsidiaries despite having as many as 75. A 2013 report from CTJ found that the company held $19.2 billion in profits in offshore tax havens and did not disclose the U.S. tax rate it would pay if that money were repatriated.
A 2015 report from Americans for Tax Fairness found that Walmart put $76 billion of assets in 78 subsidiaries across 15 tax havens where the company did not have stores. The report found that in 25 of 27 countries where Walmart has stores, the company operates through shell companies held in tax havens. In Luxembourg, where Walmart does not have stores, the company has 22 shell companies to which it transferred ownership of more than $45 billion in assets since 2011. The report claimed that in 2014, Walmart took $2.4 billion in low-interest loans from its tax haven subsidiaries, allowing U.S. affiliates to access foreign earnings without paying U.S. taxes, which the report said “may transgress the intent of U.S. law.” A 2014 analysis by the same group found that Walmart avoids paying $1 billion a year in taxes by exploiting U.S. tax loopholes, and that the company used various methods to dodge paying taxes on $21.4 billion in offshore profits in 2013 — more than double the profits it dodged taxes on in 2008. A 2011 report from Good Jobs First found that Walmart used tax avoidance schemes, including deducting rent payments to itself, to avoid $400 million in local and state taxes each year.
Walgreens is among several major retailers that have been accused of using a legal tactic to reduce their property taxes by pursuing reductions in the assessed value of their properties. After public outcry, the company backed off a decision in 2014 to move its U.S. headquarters overseas, a change that would have allowed the company to avoid some $4 billion in taxes. The 2016 report from U.S. PIRG, CTJ, and ITEP found that Walgreens had 71 subsidiaries in tax havens, including 23 in Luxembourg alone.
A 2016 Oxfam report found that Oracle held more than $38 billion in offshore accounts between 2008 and 2014 on which the company avoided paying $8.3 billion in U.S. taxes. The 2016 U.S. PIRG, CTJ, and ITEP report found that the company held $42.6 billion in five subsidiaries in offshore tax havens on which the company paid a 3.8 percent tax rate. The 2013 report from CTJ showed that in that fiscal year, Oracle held $20.9 billion in offshore tax havens on which if paid a 30 percent tax rate while the U.S. tax rate was 35 percent.
In 2019, Oracle Corporation Australia was charged more than $300 million for avoided, withheld, and backed taxes. Oracle Korea was fined $275 million in 2017 for alleged tax evasion that allowed the firm to dodge taxes for seven years by using tax havens abroad. A 2012 study commissioned by a member of the British Parliament found that Oracle had paid nothing in corporate taxes in the U.K. that year on a projected 446 million pounds in profits. Oracle declined to comment on these findings.
In 2019, Accenture paid $200 million in a settlement following reporting from the International Consortium of Investigative Journalists on leaked documents — the 2014 “Lux Leaks” scandal — revealing that major multinational companies avoided global taxes by entering into secret tax agreements with the government of Luxembourg. In 2010, acting through PriceWaterhouseCoopers, Accenture processed a transfer of intellectual property rights from Switzerland to Ireland through Luxembourg. Documents obtained as part of Lux Leaks showed that the value of the assets rose almost 600 percent in 48 hours from $1.2 billion to $7 billion, zero of which was taxed in Luxembourg. The company successfully lobbied the U.S. government in the early 2000s to move its place of incorporation to Bermuda to avoid taxes. When the government planned to change tax policies that would jeopardize Bermuda’s tax haven status, the company — which says it has no headquarters — moved its place of incorporation to Ireland. Accenture did not provide comment by the time of publication.
A 2012 report by the Sunday Times found that Accenture was able to lower its tax rate in the U.K. to less than 3.5 percent, while the nation’s standard rate was 24 percent.
CONGRESS HAS BEEN struggling to pass the much-awaited bipartisan bill, and negotiations are ongoing (the Taliban’s takeover of Afghanistan and the withdrawal of U.S. troops last month put talks somewhat on hold). It’s unclear whether the measure will have enough support to pass. Democrats control the White House and both chambers of Congress but have had little luck moving forward on a number of Biden’s administrative goals even as calls to abolish the filibuster gain support.
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Between 2013 and 2015, Johnson & Johnson reportedly dodged more than $1.7 billion in global taxes, including more than $1 billion in the U.S. alone, according to a 2018 Oxfam report. A 2016 report from the same group found that the company had avoided paying more than $16 billion in taxes between 2008 and 2014 by housing some $53 billion in offshore accounts. Johnson & Johnson did not respond to requests for comment.
JPMorgan Chase avoided $12 billion in U.S. taxes between 2008 and 2014 by holding more than $31 billion in offshore accounts, according to a 2016 Oxfam report. Another Oxfam report that year found that 96.8 percent of the bank’s foreign subsidiaries were housed in tax havens and that it only reported 0.9 percent of those on its 2014 10-K report to the Securities and Exchange Commission. The report also noted that the bank estimated its deferred tax bill from offshore accounts at $7 billion. A 2013 report from CTJ found that in that fiscal year, the bank disclosed that it held more than $25 billion in offshore tax havens on which it paid a 23 percent tax, 12 points below the 35 percent corporate tax rate that year.
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FedEx used tax avoidance strategies that allowed the company to pay a negative 4.6 percent tax rate in 2018, according to a 2019 ITEP report. The same report showed that DuPont used government subsidies and tax avoidance strategies to pay a negative 54.8 percent tax rate in 2018 and avoided paying $119 million in taxes that year.
DuPont paid no net state income tax from 2008 to 2010, a net negative of $12 million, according to a 2011 report from ITEP and CTJ. A 2013 report from the same group found that the company held more than $13 billion in offshore tax havens. Before Dow Chemical and DuPont split in 2019, the merged companies agreed to pay a $1.75 million fine to the SEC after failing to disclose $3 million in perks given to Dow’s former chief executive.
The net effect of these tax dodges is catastrophic. According to a 2016 report by Kimberly Clausing, the Eric M. Zolt Chair in Tax Law and Policy at the UCLA School of Law who was appointed in February as deputy assistant secretary for tax analysis at the Treasury’s office of tax policy, the U.S. loses more than $111 billion each year due to tax dodging by multinational corporations.
“Lobbyists have already created so many loopholes in our tax code that help the rich and powerful and big corporations,” Sen. Elizabeth Warren, D-Mass., a member of the Senate Committee on Banking, Housing, and Urban Affairs, said in a statement to The Intercept. “The American people understand what’s going on here and this is our opportunity to put a stop to it. [Maine Sen.] Angus King and I are pushing for a corporate profits tax that is essentially a minimum tax for the richest companies — no loopholes — that will allow us to increase tax revenue and help pay for these infrastructure investments we badly need.”
Biden’s American Jobs Plan would raise the corporate tax rate to 28 percent to help fund projects to rebuild highways and roads, expand high-speed broadband, build and renovate schools, and expand and upgrade power lines. Meanwhile, his American Families Plan would allocate $1.8 trillion over 10 years for education, child care, and national paid leave. To help fund those programs, he proposed a 39.6 percent capital gains tax for millionaires — almost double the current rate of 23.8 percent — and an increase in the marginal income tax rate for the top 1 percent, from 37 percent to 39.6 percent.
Companies that use such practices to avoid taxes and lobbied earlier this year on issues related to tax rates in Biden’s American Jobs Plan include Walmart, Oracle, Accenture, Bristol Myers Squibb, Shell, and Walgreens, according to an analysis by Accountable.US, a nonpartisan watchdog group focused on public corruption. Executives at companies that have historically avoided paying taxes, like Johnson & Johnson, JPMorgan Chase, FedEx, and DuPont, have spoken out publicly against Biden’s proposed tax increases.
Shell and Walgreens lobbied earlier this year on corporate tax issues in the American Jobs Plan. Walmart hired a lobbying firm tasked with “monitoring of tax proposals related to infrastructure” in the plan and proposed legislative efforts related to Donald Trump’s 2017 tax cuts. Accenture hired another firm to “monitor the American Jobs Plan as it relates to corporate taxes.” Oracle and Bristol Myers Squibb, a multinational pharmaceutical company, used the same firm hired by Accenture to monitor and lobby on similar issues in the proposal. Oracle also used that firm to monitor the American Rescue Plan, Biden’s first Covid-19 relief package, for provisions related to corporate taxes. Oracle spokesperson Jessica Moore said the company “has not lobbied on Corporate Tax issues since the new Administration.”
Nonprofit and media reports in recent years have found that those companies are among dozens of multinational corporations that have avoided tens of billions of dollars in taxes in recent years, and have used a variety of tax evasion mechanisms both in the U.S. and overseas, leading some to face fines and even criminal charges.
A Reuters report last year found that from 2018 to 2019, Shell reported $2.7 billion through offshore tax havens and avoided paying hundreds of millions of dollars in taxes. In 2019, Australia charged Shell $755 million for six years’ worth of taxes the company did not pay. The company reported that after getting tax refunds related to the closure of oil platforms, it paid no corporate income tax in the U.K. in 2018 on $731 million in profits. In 2013, India alleged that Shell had evaded taxes by underpricing a transfer of shares in 2009 by $2.8 billion.
A 2016 report from the U.S. Public Interest Research Group, Citizens for Tax Justice, and the Institute on Taxation and Economic Policy found that Bristol Myers Squibb held $25 billion across 23 tax haven subsidiaries. In 2012 the company set up a tax haven subsidiary in Ireland, which the IRS later described as an “abusive” tax shelter that could allow the company to avoid paying $1.4 billion in taxes.
Between 2008 and 2014, Walmart held more than $23.3 billion in offshore accounts and avoided paying more than $4.59 billion in U.S. taxes, according to a 2016 Oxfam report. In an arrangement internally known as “Project Flex,” the company routed money through an allegedly fictitious Chinese subsidiary, Quartz reported, which allowed it to avoid paying $2.6 billion in U.S. taxes between 2014 and 2017. The 2016 report from the U.S. PIRG, CTJ, and ITEP also found that Walmart reported zero tax haven subsidiaries despite having as many as 75. A 2013 report from CTJ found that the company held $19.2 billion in profits in offshore tax havens and did not disclose the U.S. tax rate it would pay if that money were repatriated.
A 2015 report from Americans for Tax Fairness found that Walmart put $76 billion of assets in 78 subsidiaries across 15 tax havens where the company did not have stores. The report found that in 25 of 27 countries where Walmart has stores, the company operates through shell companies held in tax havens. In Luxembourg, where Walmart does not have stores, the company has 22 shell companies to which it transferred ownership of more than $45 billion in assets since 2011. The report claimed that in 2014, Walmart took $2.4 billion in low-interest loans from its tax haven subsidiaries, allowing U.S. affiliates to access foreign earnings without paying U.S. taxes, which the report said “may transgress the intent of U.S. law.” A 2014 analysis by the same group found that Walmart avoids paying $1 billion a year in taxes by exploiting U.S. tax loopholes, and that the company used various methods to dodge paying taxes on $21.4 billion in offshore profits in 2013 — more than double the profits it dodged taxes on in 2008. A 2011 report from Good Jobs First found that Walmart used tax avoidance schemes, including deducting rent payments to itself, to avoid $400 million in local and state taxes each year.
Walgreens is among several major retailers that have been accused of using a legal tactic to reduce their property taxes by pursuing reductions in the assessed value of their properties. After public outcry, the company backed off a decision in 2014 to move its U.S. headquarters overseas, a change that would have allowed the company to avoid some $4 billion in taxes. The 2016 report from U.S. PIRG, CTJ, and ITEP found that Walgreens had 71 subsidiaries in tax havens, including 23 in Luxembourg alone.
A 2016 Oxfam report found that Oracle held more than $38 billion in offshore accounts between 2008 and 2014 on which the company avoided paying $8.3 billion in U.S. taxes. The 2016 U.S. PIRG, CTJ, and ITEP report found that the company held $42.6 billion in five subsidiaries in offshore tax havens on which the company paid a 3.8 percent tax rate. The 2013 report from CTJ showed that in that fiscal year, Oracle held $20.9 billion in offshore tax havens on which if paid a 30 percent tax rate while the U.S. tax rate was 35 percent.
In 2019, Oracle Corporation Australia was charged more than $300 million for avoided, withheld, and backed taxes. Oracle Korea was fined $275 million in 2017 for alleged tax evasion that allowed the firm to dodge taxes for seven years by using tax havens abroad. A 2012 study commissioned by a member of the British Parliament found that Oracle had paid nothing in corporate taxes in the U.K. that year on a projected 446 million pounds in profits. Oracle declined to comment on these findings.
In 2019, Accenture paid $200 million in a settlement following reporting from the International Consortium of Investigative Journalists on leaked documents — the 2014 “Lux Leaks” scandal — revealing that major multinational companies avoided global taxes by entering into secret tax agreements with the government of Luxembourg. In 2010, acting through PriceWaterhouseCoopers, Accenture processed a transfer of intellectual property rights from Switzerland to Ireland through Luxembourg. Documents obtained as part of Lux Leaks showed that the value of the assets rose almost 600 percent in 48 hours from $1.2 billion to $7 billion, zero of which was taxed in Luxembourg. The company successfully lobbied the U.S. government in the early 2000s to move its place of incorporation to Bermuda to avoid taxes. When the government planned to change tax policies that would jeopardize Bermuda’s tax haven status, the company — which says it has no headquarters — moved its place of incorporation to Ireland. Accenture did not provide comment by the time of publication.
A 2012 report by the Sunday Times found that Accenture was able to lower its tax rate in the U.K. to less than 3.5 percent, while the nation’s standard rate was 24 percent.
CONGRESS HAS BEEN struggling to pass the much-awaited bipartisan bill, and negotiations are ongoing (the Taliban’s takeover of Afghanistan and the withdrawal of U.S. troops last month put talks somewhat on hold). It’s unclear whether the measure will have enough support to pass. Democrats control the White House and both chambers of Congress but have had little luck moving forward on a number of Biden’s administrative goals even as calls to abolish the filibuster gain support.
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Between 2013 and 2015, Johnson & Johnson reportedly dodged more than $1.7 billion in global taxes, including more than $1 billion in the U.S. alone, according to a 2018 Oxfam report. A 2016 report from the same group found that the company had avoided paying more than $16 billion in taxes between 2008 and 2014 by housing some $53 billion in offshore accounts. Johnson & Johnson did not respond to requests for comment.
JPMorgan Chase avoided $12 billion in U.S. taxes between 2008 and 2014 by holding more than $31 billion in offshore accounts, according to a 2016 Oxfam report. Another Oxfam report that year found that 96.8 percent of the bank’s foreign subsidiaries were housed in tax havens and that it only reported 0.9 percent of those on its 2014 10-K report to the Securities and Exchange Commission. The report also noted that the bank estimated its deferred tax bill from offshore accounts at $7 billion. A 2013 report from CTJ found that in that fiscal year, the bank disclosed that it held more than $25 billion in offshore tax havens on which it paid a 23 percent tax, 12 points below the 35 percent corporate tax rate that year.
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FedEx used tax avoidance strategies that allowed the company to pay a negative 4.6 percent tax rate in 2018, according to a 2019 ITEP report. The same report showed that DuPont used government subsidies and tax avoidance strategies to pay a negative 54.8 percent tax rate in 2018 and avoided paying $119 million in taxes that year.
DuPont paid no net state income tax from 2008 to 2010, a net negative of $12 million, according to a 2011 report from ITEP and CTJ. A 2013 report from the same group found that the company held more than $13 billion in offshore tax havens. Before Dow Chemical and DuPont split in 2019, the merged companies agreed to pay a $1.75 million fine to the SEC after failing to disclose $3 million in perks given to Dow’s former chief executive.
The net effect of these tax dodges is catastrophic. According to a 2016 report by Kimberly Clausing, the Eric M. Zolt Chair in Tax Law and Policy at the UCLA School of Law who was appointed in February as deputy assistant secretary for tax analysis at the Treasury’s office of tax policy, the U.S. loses more than $111 billion each year due to tax dodging by multinational corporations.
“Lobbyists have already created so many loopholes in our tax code that help the rich and powerful and big corporations,” Sen. Elizabeth Warren, D-Mass., a member of the Senate Committee on Banking, Housing, and Urban Affairs, said in a statement to The Intercept. “The American people understand what’s going on here and this is our opportunity to put a stop to it. [Maine Sen.] Angus King and I are pushing for a corporate profits tax that is essentially a minimum tax for the richest companies — no loopholes — that will allow us to increase tax revenue and help pay for these infrastructure investments we badly need.”
Poverty Wages and Tax Dodging Funded Bezos’s Ridiculous Space Trip
BY William Rivers Pitt, Truthout
PUBLISHED July 21, 2021
Jeff Bezos’s 10-minute trip to space has inspired a myriad of reactions, from boredom to anger to a surge of “space penis” memes making fun of the shape of his rocket. I am mortally certain this was not the reception Bezos — the richest person on Earth — was hoping for. And I hope that the world’s unimpressed reaction is followed by greater scrutiny of Bezos’s wealth, why he has it, and why we live under a system that makes it possible for anyone to hold over $200 billion while paying virtually no taxes.
By all reports, Bezos has been obsessed with space for 30 years, and spent a small fortune — a pittance to him, it is to be noted — almost but not quite getting there. After his billionaire rival, Richard Branson, pulled a similar stunt 10 days ago, you’d have thought from the media coverage that Branson had landed on the moon and discovered cold fusion in a crater. The coverage of the Bezos fling was about as exciting as this cat meme, and all he got for his troubles in the end were enough penis jokes to last 10 lifetimes.
You’d think the owner of The Washington Post would rate more ink from his colleagues in the biz, but alas for Bezos, he has learned a hard but unavoidable lesson: Almost nobody remembers someone who does something for the second time.
Case in point, and a pop quiz (no Googling the answer, you): It is universally known that Neil Armstrong was the first astronaut to step on the surface of the moon during the Apollo 11 mission. Who was the first astronaut out the door of Apollo 12, the second mission to land on the moon? Answer: Charles “Pete” Conrad. Extra points: What did he say after stepping out of the spacecraft? Answer: “Whoopie!”
Don’t worry, I had to look it up, too. No disrespect meant to astronaut Conrad, who did it right.
Yet as ridiculous as Bezos’s space coffee break was, I still get occasional pushback when I refer to people like him and Branson, who pay almost nothing in taxes annually, as “tax cheats.” They aren’t cheating, I am told, but are playing by the laws as they find them. Change the laws if you don’t like them!
Well, that right there is the thing. Most of us aren’t billionaires who can afford to financially adopt the kind of powerful politicians who can rewrite the tax codes in our favor. What do you call a system where rich people pay Congress members to do just that? I call it cheating, and sleep like a baby at night. If I slip a few Benjamins to the home plate umpire so he will expand the strike zone for my pitcher during the game, I am cheating, and that is this.
Such behavior has launched Bezos into an economic atmosphere no spacecraft can reach, whatever shape it may hold. In one second, Bezos makes as much or more money than the average worker pulls down in a week. In a minute, he makes more than the average worker earns in a year. “Based on the median net worth of an average US household, $97,300, an average American spending $1 is roughly equivalent to Bezos spending $1.95 million,” reports Business Insider. “The Amazon CEO’s net worth took a hit of more than $10 billion in 2019 — and he still didn’t lose his spot as the world’s richest person.”
Yes, Bezos has donated some of his money. After many years of not giving much of his fortune away, he and his then-wife have donated $2 billion to combat homelessness and improve education, gave $200 million to the Smithsonian Institution’s National Air and Space Museum, and pledged $10 billion to combat the climate crisis since 2018. This is great, but it represents an infinitesimal portion of his fortune. Thanks to the magic of compound interest, his own money will make that money back for him in the time it takes to drive to Nana’s house.
Instead of lauding Bezos’s late-blooming philanthropy, we should be asking ourselves: Why is it OK for anyone to have the amount of money that Bezos has, when so much of the world has so little?
Moreover, we should consider the manner in which that fortune was amassed. Amazon, Bezos’s massive company, came to be a $1.5 trillion economic juggernaut by using brazenly monopolistic tactics to either buy up rivals or run them off the road. The company pays almost nothing in taxes, and to pad the bottom line, Amazon has become one of the most notorious union-busting corporations on Earth.
“Recently, Amazon won a closely watched National Labor Relations Board election against the Retail Wholesale and Department Store Union at a warehouse in Bessemer, Alabama,” John Logan reported for Truthout in May. “But it did so only after spending millions of dollars on harassing and intimidating its workers for two months before the vote. Now, the company is using the same strategy to bust a new independent union drive at its Staten Island facility in New York.”
Before embarking on his little trip, Bezos made word noises that seemed to indicate he sort of, kind of gets it. When asked if these “joyrides for the wealthy” waste money that could be used to help people on Earth, he replied, “Well, I say they’re largely right. We have to do both. You know, we have lots of problems here and now on Earth and we need to work on those, and we always need to look to the future. We’ve always done that as a species, as a civilization. We have to do both.”
We have to do both… so long as I get to play with my toys first. It was a politician’s answer, the kind of pabulum senators spout to reporters before the elevator doors close. I’ll believe Bezos and his ilk mean it if I never, ever hear talk about low-orbit billboards advertising Amazon products, or about corporate logos (come to think of it, the Amazon logo also has some strange penis action going on) visible on the moon. I fear that is where we are headed, because Bezos and Branson did not do this for the sake of discovery or exploration. They were clear: This was a step toward the commercialization of space, and I want no part of that.
Again, I am not alone. “What Branson’s and Bezos’s baby jaunts into the sky represent is not progress,” writes Barry Petchesky for Defector. “They are not about exploration or knowledge. They are moneymaking ventures. They are, as initially envisioned, about the promise of spaceflight tourism. They are symbolic, but of a future (and a present!) where only the extremely wealthy can get a taste of the peak awe that humanity is capable of feeling.”
There was no peak awe in beholding the Bezos space penis, and word has it Tesla billionaire Elon Musk is lining himself up to be the next obscenely wealthy turd to bounce some expensive metal off the inside of the outer atmosphere.
Meanwhile, billionaires like Bezos made your yearly salary three times over in the minutes it took you to read this article. Launch that into space.
By all reports, Bezos has been obsessed with space for 30 years, and spent a small fortune — a pittance to him, it is to be noted — almost but not quite getting there. After his billionaire rival, Richard Branson, pulled a similar stunt 10 days ago, you’d have thought from the media coverage that Branson had landed on the moon and discovered cold fusion in a crater. The coverage of the Bezos fling was about as exciting as this cat meme, and all he got for his troubles in the end were enough penis jokes to last 10 lifetimes.
You’d think the owner of The Washington Post would rate more ink from his colleagues in the biz, but alas for Bezos, he has learned a hard but unavoidable lesson: Almost nobody remembers someone who does something for the second time.
Case in point, and a pop quiz (no Googling the answer, you): It is universally known that Neil Armstrong was the first astronaut to step on the surface of the moon during the Apollo 11 mission. Who was the first astronaut out the door of Apollo 12, the second mission to land on the moon? Answer: Charles “Pete” Conrad. Extra points: What did he say after stepping out of the spacecraft? Answer: “Whoopie!”
Don’t worry, I had to look it up, too. No disrespect meant to astronaut Conrad, who did it right.
Yet as ridiculous as Bezos’s space coffee break was, I still get occasional pushback when I refer to people like him and Branson, who pay almost nothing in taxes annually, as “tax cheats.” They aren’t cheating, I am told, but are playing by the laws as they find them. Change the laws if you don’t like them!
Well, that right there is the thing. Most of us aren’t billionaires who can afford to financially adopt the kind of powerful politicians who can rewrite the tax codes in our favor. What do you call a system where rich people pay Congress members to do just that? I call it cheating, and sleep like a baby at night. If I slip a few Benjamins to the home plate umpire so he will expand the strike zone for my pitcher during the game, I am cheating, and that is this.
Such behavior has launched Bezos into an economic atmosphere no spacecraft can reach, whatever shape it may hold. In one second, Bezos makes as much or more money than the average worker pulls down in a week. In a minute, he makes more than the average worker earns in a year. “Based on the median net worth of an average US household, $97,300, an average American spending $1 is roughly equivalent to Bezos spending $1.95 million,” reports Business Insider. “The Amazon CEO’s net worth took a hit of more than $10 billion in 2019 — and he still didn’t lose his spot as the world’s richest person.”
Yes, Bezos has donated some of his money. After many years of not giving much of his fortune away, he and his then-wife have donated $2 billion to combat homelessness and improve education, gave $200 million to the Smithsonian Institution’s National Air and Space Museum, and pledged $10 billion to combat the climate crisis since 2018. This is great, but it represents an infinitesimal portion of his fortune. Thanks to the magic of compound interest, his own money will make that money back for him in the time it takes to drive to Nana’s house.
Instead of lauding Bezos’s late-blooming philanthropy, we should be asking ourselves: Why is it OK for anyone to have the amount of money that Bezos has, when so much of the world has so little?
Moreover, we should consider the manner in which that fortune was amassed. Amazon, Bezos’s massive company, came to be a $1.5 trillion economic juggernaut by using brazenly monopolistic tactics to either buy up rivals or run them off the road. The company pays almost nothing in taxes, and to pad the bottom line, Amazon has become one of the most notorious union-busting corporations on Earth.
“Recently, Amazon won a closely watched National Labor Relations Board election against the Retail Wholesale and Department Store Union at a warehouse in Bessemer, Alabama,” John Logan reported for Truthout in May. “But it did so only after spending millions of dollars on harassing and intimidating its workers for two months before the vote. Now, the company is using the same strategy to bust a new independent union drive at its Staten Island facility in New York.”
Before embarking on his little trip, Bezos made word noises that seemed to indicate he sort of, kind of gets it. When asked if these “joyrides for the wealthy” waste money that could be used to help people on Earth, he replied, “Well, I say they’re largely right. We have to do both. You know, we have lots of problems here and now on Earth and we need to work on those, and we always need to look to the future. We’ve always done that as a species, as a civilization. We have to do both.”
We have to do both… so long as I get to play with my toys first. It was a politician’s answer, the kind of pabulum senators spout to reporters before the elevator doors close. I’ll believe Bezos and his ilk mean it if I never, ever hear talk about low-orbit billboards advertising Amazon products, or about corporate logos (come to think of it, the Amazon logo also has some strange penis action going on) visible on the moon. I fear that is where we are headed, because Bezos and Branson did not do this for the sake of discovery or exploration. They were clear: This was a step toward the commercialization of space, and I want no part of that.
Again, I am not alone. “What Branson’s and Bezos’s baby jaunts into the sky represent is not progress,” writes Barry Petchesky for Defector. “They are not about exploration or knowledge. They are moneymaking ventures. They are, as initially envisioned, about the promise of spaceflight tourism. They are symbolic, but of a future (and a present!) where only the extremely wealthy can get a taste of the peak awe that humanity is capable of feeling.”
There was no peak awe in beholding the Bezos space penis, and word has it Tesla billionaire Elon Musk is lining himself up to be the next obscenely wealthy turd to bounce some expensive metal off the inside of the outer atmosphere.
Meanwhile, billionaires like Bezos made your yearly salary three times over in the minutes it took you to read this article. Launch that into space.
Trump's Corruption Was So Garish That We Lost Sight of the Other Brigands
In which the Washington Post informs of us a very coincidental land deal for then-incoming Secretary of Agriculture Sonny Perdue.
By Charles P. Pierce - esquire
Jun 29, 2021
There simply wasn’t anybody in the last administration* who wasn’t on the arm to someone somewhere. The former president*’s corruption was so obvious and so garish that we occasionally lost sight of how enthusiastically the rest of his band of brigands took to the conventional forms of political sleaze. I doubt we’ll ever truly get to the bottom of the wealth on which Wilbur Ross slumbered during his time as Secretary of Commerce. And, on Tuesday, in a massive investigative piece, the Washington Post teed up former Agriculture Secretary Sonny Perdue.
In February 2017, weeks after President Donald Trump selected him to be agriculture secretary, Perdue’s company bought a small grain plant in South Carolina from one of the biggest agricultural corporations in America.
Had anyone noticed, it would have prompted questions ahead of his confirmation, a period when most nominees lie low and avoid potential controversy. The former governor of Georgia did not disclose the deal — there was no legal requirement to do so.
We feel it our duty to interject here. Questions similar to these were “prompted” by actions on the part of practically every Cabinet nominee in 2017. Remember Steve Mnuchin, who “forgot” to list almost $100 million in assets on his mandatory disclosure form? Ross got caught using bookkeeping chicanery to “lose” more than $2 billion in assets.
Questions were prompted by all of this, and yet, Mnuchin and Ross and the rest of them were all confirmed. So the prompted questions were just so much afternoon breeze. We continue.
An examination of public records by The Washington Post has found that the agricultural company, Archer-Daniels-Midland (ADM), sold the land at a small fraction of its estimated value just as it stood to benefit from a friendly secretary of agriculture.The Post found a former executive of Perdue’s company who admitted for the record that ADM sold the property to Perdue’s company for approximately 16 times less than its original estimated value. This is not a sweetheart deal. This is a marriage made in influence-peddling heaven.
The timing of the sale just as Perdue was about to become the most powerful man in U.S. agriculture raises legal and ethics concerns, from the narrow question of whether the secretary followed federal financial disclosure requirements to whether the transaction could have been an attempt to influence an incoming government official, in violation of bribery statutes, ethics lawyers say. “This stinks to high heaven,” said Julie O’Sullivan, a Georgetown University law professor and former federal prosecutor. “It deserves a prosecutor’s attention,” she added.As the Post points out, the grain elevator alone at the facility costs twice what Perdue’s people paid ADM for the whole place. There are many people who would find this suspicious.
The story goes on to describe how, prior to selling the facility to The Man Who Would Be Ag Secretary, ADM pretty much looted the small town of Estill, South Carolina, and its people.
Hankey recalled that the initial signed deal was for $10 million, but after a troubling assessment, ADM paid $5,525,854.70 in December 2010, according to a deed. Hankey said that the potential liability from fire or accidents with the aging facility would have given potential buyers pause — and would still.
Yet Hankey had suspicions about ADM’s motives in Estill, and he turned out to be right. ADM shut down the processing business. Some 30 people lost their jobs in a town where more than a third of the population lives below the poverty line, according to an estimate by the U.S. Census Bureau.
“It had a huge impact on the town,” Hankey said.And then:
The sale also affected the wider region. Because it processed so much soy, the plant was a regional buyer in the market. That was a lot of capacity for local growers, who could sell to Carolina Soya instead of shipping it to big traders like Cargill or ADM. When the Estill plant closed, local soy prices fell. That meant ADM, one of the biggest players in soy processing, could purchase beans at a lower cost. “They bought the market,” Hankey said.
And at the end of this historical pipeline of raw corporate sewage were, allegedly, the greedy fingers of Sonny Perdue, an official of an administration dedicated to the gospel of Anything Goes. And, generally, it did.
In February 2017, weeks after President Donald Trump selected him to be agriculture secretary, Perdue’s company bought a small grain plant in South Carolina from one of the biggest agricultural corporations in America.
Had anyone noticed, it would have prompted questions ahead of his confirmation, a period when most nominees lie low and avoid potential controversy. The former governor of Georgia did not disclose the deal — there was no legal requirement to do so.
We feel it our duty to interject here. Questions similar to these were “prompted” by actions on the part of practically every Cabinet nominee in 2017. Remember Steve Mnuchin, who “forgot” to list almost $100 million in assets on his mandatory disclosure form? Ross got caught using bookkeeping chicanery to “lose” more than $2 billion in assets.
Questions were prompted by all of this, and yet, Mnuchin and Ross and the rest of them were all confirmed. So the prompted questions were just so much afternoon breeze. We continue.
An examination of public records by The Washington Post has found that the agricultural company, Archer-Daniels-Midland (ADM), sold the land at a small fraction of its estimated value just as it stood to benefit from a friendly secretary of agriculture.The Post found a former executive of Perdue’s company who admitted for the record that ADM sold the property to Perdue’s company for approximately 16 times less than its original estimated value. This is not a sweetheart deal. This is a marriage made in influence-peddling heaven.
The timing of the sale just as Perdue was about to become the most powerful man in U.S. agriculture raises legal and ethics concerns, from the narrow question of whether the secretary followed federal financial disclosure requirements to whether the transaction could have been an attempt to influence an incoming government official, in violation of bribery statutes, ethics lawyers say. “This stinks to high heaven,” said Julie O’Sullivan, a Georgetown University law professor and former federal prosecutor. “It deserves a prosecutor’s attention,” she added.As the Post points out, the grain elevator alone at the facility costs twice what Perdue’s people paid ADM for the whole place. There are many people who would find this suspicious.
The story goes on to describe how, prior to selling the facility to The Man Who Would Be Ag Secretary, ADM pretty much looted the small town of Estill, South Carolina, and its people.
Hankey recalled that the initial signed deal was for $10 million, but after a troubling assessment, ADM paid $5,525,854.70 in December 2010, according to a deed. Hankey said that the potential liability from fire or accidents with the aging facility would have given potential buyers pause — and would still.
Yet Hankey had suspicions about ADM’s motives in Estill, and he turned out to be right. ADM shut down the processing business. Some 30 people lost their jobs in a town where more than a third of the population lives below the poverty line, according to an estimate by the U.S. Census Bureau.
“It had a huge impact on the town,” Hankey said.And then:
The sale also affected the wider region. Because it processed so much soy, the plant was a regional buyer in the market. That was a lot of capacity for local growers, who could sell to Carolina Soya instead of shipping it to big traders like Cargill or ADM. When the Estill plant closed, local soy prices fell. That meant ADM, one of the biggest players in soy processing, could purchase beans at a lower cost. “They bought the market,” Hankey said.
And at the end of this historical pipeline of raw corporate sewage were, allegedly, the greedy fingers of Sonny Perdue, an official of an administration dedicated to the gospel of Anything Goes. And, generally, it did.
Ending Corporate Impunity
Dirt Diggers Digest
5/6/2021
Corporate America’s embrace of voting rights, racial justice and other social causes is laudable, but it is also designed to make us forget how much the private sector profited from the retrograde policies of the Trump Administration. This was not just a matter of the business tax cuts.
Thanks to deregulation and weakened enforcement, big business was able to operate with a much higher level of impunity. The latest evidence of this comes in a new report from Public Citizen documenting the declining volume of prosecutions of corporate crime during the Trump years.
Using data from the U.S. Sentencing Commission, Public Citizen finds that the number of federal prosecutions of corporate criminals fell to a new low of just 94 in fiscal year 2020. This was a drop of 20 percent from the year before, a plunge of two-thirds from the peak of 296 in 2000, and the lowest on record since the Commission started releasing corporate prosecution statistics in 1996.
While adopting a lackluster approach to prosecutions, the Justice Department was more inclined to offer rogue corporations leniency agreements. Employing data from the Corporate Prosecution Registry, Public Citizen points out that DOJ substantially increased its use of deferred prosecution and non-prosecution agreements in FY2020.
Connecting the two trends, Public Citizen finds that the leniency agreements amounted to 32 percent of the total of all cases against corporations, a record amount.
porate ImpunityCorporate America’s embrace of voting rights, racial justice and other social causes is laudable, but it is also designed to make us forget how much the private sector profited from the retrograde policies of the Trump Administration. This was not just a matter of the business tax cuts.
Thanks to deregulation and weakened enforcement, big business was able to operate with a much higher level of impunity. The latest evidence of this comes in a new report from Public Citizen documenting the declining volume of prosecutions of corporate crime during the Trump years.
Using data from the U.S. Sentencing Commission, Public Citizen finds that the number of federal prosecutions of corporate criminals fell to a new low of just 94 in fiscal year 2020. This was a drop of 20 percent from the year before, a plunge of two-thirds from the peak of 296 in 2000, and the lowest on record since the Commission started releasing corporate prosecution statistics in 1996.
While adopting a lackluster approach to prosecutions, the Justice Department was more inclined to offer rogue corporations leniency agreements. Employing data from the Corporate Prosecution Registry, Public Citizen points out that DOJ substantially increased its use of deferred prosecution and non-prosecution agreements in FY2020.
Connecting the two trends, Public Citizen finds that the leniency agreements amounted to 32 percent of the total of all cases against corporations, a record amount.
The report dispels any suggestion that declining prosecutions and increasing leniency agreements are signs that Corporate America has become better at obeying the law: “On the contrary, they are signs that, despite Trump’s ‘law and order’ rhetoric and his administration’s brutal crackdowns on immigrants, racial justice protestors and low-level offenders, the administration went out of its way to avoid prosecuting corporate criminals. The result is the creation of an environment of corporate impunity.”
The Public Citizen report focuses on criminal cases, but there were similar trends in civil enforcement. For example, the data in Violation Tracker shows that the DOJ’s civil division, which handles matters such as False Claims Act cases against rogue federal contractors, announced only 44 corporate pleas and settlements in 2019, down from 137 announced by the Obama DOJ in 2015.
Fortunately, these findings are now mainly a matter of historical interest. The current question is how things will change under the Biden Administration. Since Merrick Garland has been attorney general for a short time, it is too soon to reach any clear conclusions.
It is widely expected that DOJ will be taking a more aggressive stance. One major law firm advised its clients that white collar enforcement activity will “substantially increase,” adding: “Not only will the government take a more aggressive posture, but the proliferation of whistleblower programs and the creation of new enforcement tools means that prosecutors will be armed with more information and resources than ever. Companies should remain vigilant as risks shift and consider taking steps to ensure they adapt their compliance programs and controls accordingly.”
When corporations are made to feel they need to be more careful, we humans can breathe a bit easier.
Thanks to deregulation and weakened enforcement, big business was able to operate with a much higher level of impunity. The latest evidence of this comes in a new report from Public Citizen documenting the declining volume of prosecutions of corporate crime during the Trump years.
Using data from the U.S. Sentencing Commission, Public Citizen finds that the number of federal prosecutions of corporate criminals fell to a new low of just 94 in fiscal year 2020. This was a drop of 20 percent from the year before, a plunge of two-thirds from the peak of 296 in 2000, and the lowest on record since the Commission started releasing corporate prosecution statistics in 1996.
While adopting a lackluster approach to prosecutions, the Justice Department was more inclined to offer rogue corporations leniency agreements. Employing data from the Corporate Prosecution Registry, Public Citizen points out that DOJ substantially increased its use of deferred prosecution and non-prosecution agreements in FY2020.
Connecting the two trends, Public Citizen finds that the leniency agreements amounted to 32 percent of the total of all cases against corporations, a record amount.
porate ImpunityCorporate America’s embrace of voting rights, racial justice and other social causes is laudable, but it is also designed to make us forget how much the private sector profited from the retrograde policies of the Trump Administration. This was not just a matter of the business tax cuts.
Thanks to deregulation and weakened enforcement, big business was able to operate with a much higher level of impunity. The latest evidence of this comes in a new report from Public Citizen documenting the declining volume of prosecutions of corporate crime during the Trump years.
Using data from the U.S. Sentencing Commission, Public Citizen finds that the number of federal prosecutions of corporate criminals fell to a new low of just 94 in fiscal year 2020. This was a drop of 20 percent from the year before, a plunge of two-thirds from the peak of 296 in 2000, and the lowest on record since the Commission started releasing corporate prosecution statistics in 1996.
While adopting a lackluster approach to prosecutions, the Justice Department was more inclined to offer rogue corporations leniency agreements. Employing data from the Corporate Prosecution Registry, Public Citizen points out that DOJ substantially increased its use of deferred prosecution and non-prosecution agreements in FY2020.
Connecting the two trends, Public Citizen finds that the leniency agreements amounted to 32 percent of the total of all cases against corporations, a record amount.
The report dispels any suggestion that declining prosecutions and increasing leniency agreements are signs that Corporate America has become better at obeying the law: “On the contrary, they are signs that, despite Trump’s ‘law and order’ rhetoric and his administration’s brutal crackdowns on immigrants, racial justice protestors and low-level offenders, the administration went out of its way to avoid prosecuting corporate criminals. The result is the creation of an environment of corporate impunity.”
The Public Citizen report focuses on criminal cases, but there were similar trends in civil enforcement. For example, the data in Violation Tracker shows that the DOJ’s civil division, which handles matters such as False Claims Act cases against rogue federal contractors, announced only 44 corporate pleas and settlements in 2019, down from 137 announced by the Obama DOJ in 2015.
Fortunately, these findings are now mainly a matter of historical interest. The current question is how things will change under the Biden Administration. Since Merrick Garland has been attorney general for a short time, it is too soon to reach any clear conclusions.
It is widely expected that DOJ will be taking a more aggressive stance. One major law firm advised its clients that white collar enforcement activity will “substantially increase,” adding: “Not only will the government take a more aggressive posture, but the proliferation of whistleblower programs and the creation of new enforcement tools means that prosecutors will be armed with more information and resources than ever. Companies should remain vigilant as risks shift and consider taking steps to ensure they adapt their compliance programs and controls accordingly.”
When corporations are made to feel they need to be more careful, we humans can breathe a bit easier.
Kushner Companies Violated Multiple Laws in Massive Tenant Dispute, Judge Rules
Judge finds Kushner-owned management company charged "deceptive" fees to thousands of tenants, in lawsuit filed after ProPublica found widespread problems in their apartments.
by Alec MacGillis - PROPUBLICA
May 5, 5 a.m. EDT
It’s been six years since Dionne Mont first saw her apartment at Fontana Village, a rental housing complex just east of Baltimore. She was aghast that day to find the front door coming off its hinges, the kitchen cabinet doors stuck to their frames, mouse droppings under the kitchen sink, mold in the refrigerator, the toilet barely functioning and water stains on every upstairs ceiling, among other problems. But she had already signed the lease and paid the deposit.
Mont insisted that management make repairs, but that took several months, during which time she paid her $865 monthly rent and lived elsewhere. She was hit with constant late fees and so-called “court” fees, because the management company required tenants to pay rent at a Walmart or a check-cashing outlet, and she often couldn’t get there from her job as a bus driver before the 4:30 p.m. cutoff. She moved out in 2017.
Four years later, Mont has received belated vindication: On April 29, a Maryland judge ruled that the management company, which is owned by Jared Kushner’s family real estate firm, violated state consumer laws in several areas, including by not showing tenants the actual units they were going to be assigned to prior to signing a lease, and by assessing them all manner of dubious fees. The ruling came after a 31-day hearing in which about 100 of the company’s current and former tenants, including Mont, testified.
“I feel elated,” said Mont. “People were living in inhumane conditions — deplorable conditions.”
Maryland Attorney General Brian Frosh brought the consumer-protection case against Westminster Management, the property-management arm of Kushner Companies, in 2019 following a 2017 article by ProPublica and The New York Times Magazine on the company’s treatment of its tenants at the 15 housing complexes it owned in the Baltimore area, which have served as profitable ballast for a company better known for its gleaming properties in New York. The article revealed the company’s aggressive pursuit of current and former tenants in court over unpaid rent and broken leases, even in cases where tenants were in the right, as well as the shoddy conditions of many units.
To build its case, the attorney general’s office subpoenaed records from the company and solicited testimony from current and former tenants, who provided it via remote video link to Administrative Law Judge Emily Daneker late last year.
In her 252-page ruling last week, which was first reported by the Baltimore Sun, Daneker determined that the company had issued a relentless barrage of questionable fees on tenants over the course of many years, including both the fees identified in the 2017 article and others as well. In more than 15,000 instances, Westminster charged in excess of the state-maximum $25 fee to process a rental application. In more than 28,000 instances, the company also assessed a $12 “agent fee” on court filings against tenants even though it had incurred no such cost with the courts — a tactic that Daneker called “spurious” and which brought the company more than $332,000 in fees. And in more than 2,600 instances, the Kushner operation assessed $80 court fees to tenants at its two complexes within the city of Baltimore, even though the charge from the courts was only $50. “The practice of passing court costs on to tenants, in the absence of a court order,” Daneker wrote, “was deceptive.”
The manifold fees suggested a deliberate strategy to run up tenants’ tabs, Daneker wrote, repeatedly calling the practices “widespread and numerous.” She concluded that “these circumstances do not support a finding that this was the result of isolated or inadvertent mistakes.”
Daneker also found that the company violated consumer law by failing to have the proper debt-collection licenses for some of its properties and by misrepresenting the condition of units being leased to tenants. However, she found that the attorney general’s office did not establish that the company violated the law in several other areas, such as by misrepresenting its ability to provide maintenance on units or in some of its calculations of late fees.
Kushner Companies, which has since sold some of the complexes and put others of them on the market, declined to be interviewed for this article. A statement from Kushner general counsel Christopher Smith suggested that the ruling amounted to a victory for the company, despite the judge’s many findings against it. “Kushner respects the thoughtful depth of the Judge’s decision, which vindicates Westminster with respect to many of the Attorney General’s overreaching allegations,” Smith said.
In previous statements, the company had alleged that Frosh, a Democrat, had brought the suit for political reasons, and was singling out the company owned by the then-president’s son-in-law for a host of practices that the company said were common in the multi-housing rental industry. In her ruling, Daneker stated that she found no evidence of an “improper selective prosecution” in the suit.
The attorney general’s office declined to comment, noting that the case is not yet final. Each side will next have the chance to file exceptions, as objections are known, that will be considered by the final arbiter in the consumer protection division of the attorney general’s office. The state’s lawyers will also propose restitution sums for tenants and a civil penalty. Once the consumer protection arbiter issues a ruling, both sides will have the right to challenge it in the state’s appeals courts.
Also awaiting resolution is a separate class-action lawsuit brought by tenants that alleges, among other things, that the company’s late fees exceeded state limits. A Court of Special Appeals judge has yet to issue a ruling following a January oral argument on the plaintiffs’ appeal of previous rulings against both their attempt to certify themselves as a class and against the substance of their claim regarding late fees.
Despite the drawn-out process, including a three-month delay because of the pandemic, former tenants took satisfaction in the first judicial affirmation of their accounts of improper treatment. Kelly Ziegler, an orthodontic assistant, lived for two years in Highland Village, just south of Baltimore. She also didn’t get to see her unit before she moved in, in 2015, and was confronted with a litany of problems: a leak from the tub into the kitchen, a loose bedroom window that she worried her young child might fall out of, and a roach infestation so bad that she couldn’t use her stove. After some neighbor kids rolled a tire into her yard to use as a swing, she was fined $250 with no warning. “They did a lot of petty stuff,” she said.
But when she asked to break her lease over the problems with the house, management warned her that they would take her to court. She finally got out of the lease in 2017.
When the attorney general’s office approached Ziegler over her case, she was eager to share her experience. But when she found out that the complex was owned by President Trump’s son-in-law, she started to worry she would face repercussions for speaking out. “It made me scared that I was doing something wrong. This is a person with power,” she said. She said that her grandmother tried to reassure her: “You don’t have anything to worry about. You’ve done nothing wrong.”
Kushner has of course since left the White House and moved to Florida. Ziegler now lives with her family on a dead-end street in southwest Baltimore. It’s near a high-crime strip where, not long ago, a 17-year-old friend of her daughter was fatally shot. But Ziegler is still glad to be out of Highland Village, out of Kushner’s reach.
“I hope I don’t run into him,” she said.
Mont insisted that management make repairs, but that took several months, during which time she paid her $865 monthly rent and lived elsewhere. She was hit with constant late fees and so-called “court” fees, because the management company required tenants to pay rent at a Walmart or a check-cashing outlet, and she often couldn’t get there from her job as a bus driver before the 4:30 p.m. cutoff. She moved out in 2017.
Four years later, Mont has received belated vindication: On April 29, a Maryland judge ruled that the management company, which is owned by Jared Kushner’s family real estate firm, violated state consumer laws in several areas, including by not showing tenants the actual units they were going to be assigned to prior to signing a lease, and by assessing them all manner of dubious fees. The ruling came after a 31-day hearing in which about 100 of the company’s current and former tenants, including Mont, testified.
“I feel elated,” said Mont. “People were living in inhumane conditions — deplorable conditions.”
Maryland Attorney General Brian Frosh brought the consumer-protection case against Westminster Management, the property-management arm of Kushner Companies, in 2019 following a 2017 article by ProPublica and The New York Times Magazine on the company’s treatment of its tenants at the 15 housing complexes it owned in the Baltimore area, which have served as profitable ballast for a company better known for its gleaming properties in New York. The article revealed the company’s aggressive pursuit of current and former tenants in court over unpaid rent and broken leases, even in cases where tenants were in the right, as well as the shoddy conditions of many units.
To build its case, the attorney general’s office subpoenaed records from the company and solicited testimony from current and former tenants, who provided it via remote video link to Administrative Law Judge Emily Daneker late last year.
In her 252-page ruling last week, which was first reported by the Baltimore Sun, Daneker determined that the company had issued a relentless barrage of questionable fees on tenants over the course of many years, including both the fees identified in the 2017 article and others as well. In more than 15,000 instances, Westminster charged in excess of the state-maximum $25 fee to process a rental application. In more than 28,000 instances, the company also assessed a $12 “agent fee” on court filings against tenants even though it had incurred no such cost with the courts — a tactic that Daneker called “spurious” and which brought the company more than $332,000 in fees. And in more than 2,600 instances, the Kushner operation assessed $80 court fees to tenants at its two complexes within the city of Baltimore, even though the charge from the courts was only $50. “The practice of passing court costs on to tenants, in the absence of a court order,” Daneker wrote, “was deceptive.”
The manifold fees suggested a deliberate strategy to run up tenants’ tabs, Daneker wrote, repeatedly calling the practices “widespread and numerous.” She concluded that “these circumstances do not support a finding that this was the result of isolated or inadvertent mistakes.”
Daneker also found that the company violated consumer law by failing to have the proper debt-collection licenses for some of its properties and by misrepresenting the condition of units being leased to tenants. However, she found that the attorney general’s office did not establish that the company violated the law in several other areas, such as by misrepresenting its ability to provide maintenance on units or in some of its calculations of late fees.
Kushner Companies, which has since sold some of the complexes and put others of them on the market, declined to be interviewed for this article. A statement from Kushner general counsel Christopher Smith suggested that the ruling amounted to a victory for the company, despite the judge’s many findings against it. “Kushner respects the thoughtful depth of the Judge’s decision, which vindicates Westminster with respect to many of the Attorney General’s overreaching allegations,” Smith said.
In previous statements, the company had alleged that Frosh, a Democrat, had brought the suit for political reasons, and was singling out the company owned by the then-president’s son-in-law for a host of practices that the company said were common in the multi-housing rental industry. In her ruling, Daneker stated that she found no evidence of an “improper selective prosecution” in the suit.
The attorney general’s office declined to comment, noting that the case is not yet final. Each side will next have the chance to file exceptions, as objections are known, that will be considered by the final arbiter in the consumer protection division of the attorney general’s office. The state’s lawyers will also propose restitution sums for tenants and a civil penalty. Once the consumer protection arbiter issues a ruling, both sides will have the right to challenge it in the state’s appeals courts.
Also awaiting resolution is a separate class-action lawsuit brought by tenants that alleges, among other things, that the company’s late fees exceeded state limits. A Court of Special Appeals judge has yet to issue a ruling following a January oral argument on the plaintiffs’ appeal of previous rulings against both their attempt to certify themselves as a class and against the substance of their claim regarding late fees.
Despite the drawn-out process, including a three-month delay because of the pandemic, former tenants took satisfaction in the first judicial affirmation of their accounts of improper treatment. Kelly Ziegler, an orthodontic assistant, lived for two years in Highland Village, just south of Baltimore. She also didn’t get to see her unit before she moved in, in 2015, and was confronted with a litany of problems: a leak from the tub into the kitchen, a loose bedroom window that she worried her young child might fall out of, and a roach infestation so bad that she couldn’t use her stove. After some neighbor kids rolled a tire into her yard to use as a swing, she was fined $250 with no warning. “They did a lot of petty stuff,” she said.
But when she asked to break her lease over the problems with the house, management warned her that they would take her to court. She finally got out of the lease in 2017.
When the attorney general’s office approached Ziegler over her case, she was eager to share her experience. But when she found out that the complex was owned by President Trump’s son-in-law, she started to worry she would face repercussions for speaking out. “It made me scared that I was doing something wrong. This is a person with power,” she said. She said that her grandmother tried to reassure her: “You don’t have anything to worry about. You’ve done nothing wrong.”
Kushner has of course since left the White House and moved to Florida. Ziegler now lives with her family on a dead-end street in southwest Baltimore. It’s near a high-crime strip where, not long ago, a 17-year-old friend of her daughter was fatally shot. But Ziegler is still glad to be out of Highland Village, out of Kushner’s reach.
“I hope I don’t run into him,” she said.
another scam exposed!!!
Company awarded $1.3B by Trump to make vaccine syringes has not made even one
An Apiject spokesperson told NBC that the company "is working with several vaccine pharmaceutical companies to conduct the testing and regulatory reviews of Covid-19 vaccines in the ApiJect syringe."
By Adam Barnes | the hill
April 21, 2021
Story at a glance
A company the Trump administration awarded $1.3 billion in part to produce syringes for COVID-19 vaccines has not made a single syringe a year later.
Connecticut based ApiJect Systems Corp, to date, has not received federal approval necessary to begin production, NBC reported. Additionally, the company has yet to build a factory, which was expected to employ nearly 650 people.
An Apiject spokesperson told NBC that the company "is working with several vaccine pharmaceutical companies to conduct the testing and regulatory reviews of Covid-19 vaccines in the ApiJect syringe." Apiject told the outlet that two vaccine manufacturers have asked for approval to use their syringes, although the company didn’t specify which vaccine makers.
Apiject was awarded $590 million in loans after then-President Trump used the Defense Authorization Act to spur production. The Defense Department extended a contract to Apiject in May, which was worth up to $251 million. The company was previously awarded a contract from Health and Human Services in January for more than $450 million.
Public records do not indicate the exact dollar amount the company has received, according to NBC. The outlet added that the company needs to raise nearly $200 million to secure $590 million in loans.
Apijects syringes would be more complex than a typical needle, as they would be distributed already filled with a particular vaccine. This technology has not been approved for use in the U.S.
Despite failing to produce a syringe in 2020, Apiject met its commitments under federal contracts, NBC reported. This was achieved by securing a subcontractor ensuring the ability to make the syringes once approved by the FDA. The Pentagon and HHS both said the company is compliant with its contracts, according to the outlet.
- A company awarded $1.3 billion by the Trump administration in part to produce syringes for COVID-19 vaccines has yet to make a single syringe a year later.
- Connecticut based ApiJect Systems Corp., to date, has not received federal approval necessary to begin production.
- Apiject was awarded $590 million in loans after then-President Trump used the Defense Authorization Act to spur production.
A company the Trump administration awarded $1.3 billion in part to produce syringes for COVID-19 vaccines has not made a single syringe a year later.
Connecticut based ApiJect Systems Corp, to date, has not received federal approval necessary to begin production, NBC reported. Additionally, the company has yet to build a factory, which was expected to employ nearly 650 people.
An Apiject spokesperson told NBC that the company "is working with several vaccine pharmaceutical companies to conduct the testing and regulatory reviews of Covid-19 vaccines in the ApiJect syringe." Apiject told the outlet that two vaccine manufacturers have asked for approval to use their syringes, although the company didn’t specify which vaccine makers.
Apiject was awarded $590 million in loans after then-President Trump used the Defense Authorization Act to spur production. The Defense Department extended a contract to Apiject in May, which was worth up to $251 million. The company was previously awarded a contract from Health and Human Services in January for more than $450 million.
Public records do not indicate the exact dollar amount the company has received, according to NBC. The outlet added that the company needs to raise nearly $200 million to secure $590 million in loans.
Apijects syringes would be more complex than a typical needle, as they would be distributed already filled with a particular vaccine. This technology has not been approved for use in the U.S.
Despite failing to produce a syringe in 2020, Apiject met its commitments under federal contracts, NBC reported. This was achieved by securing a subcontractor ensuring the ability to make the syringes once approved by the FDA. The Pentagon and HHS both said the company is compliant with its contracts, according to the outlet.
Revealed: seafood fraud happening on a vast global scale
Guardian analysis of 44 studies finds nearly 40% of 9,000 products from restaurants, markets and fishmongers were mislabelled
Stephen Leahy - THE GUARDIAN
Mon 15 Mar 2021 02.00 EDT
A Guardian Seascape analysis of 44 recent studies of more than 9,000 seafood samples from restaurants, fishmongers and supermarkets in more than 30 countries found that 36% were mislabelled, exposing seafood fraud on a vast global scale.
Many of the studies used relatively new DNA analysis techniques. In one comparison of sales of fish labelled “snapper” by fishmongers, supermarkets and restaurants in Canada, the US, the UK, Singapore, Australia and New Zealand, researchers found mislabelling in about 40% of fish tested. The UK and Canada had the highest rates of mislabelling in that study, at 55%, followed by the US at 38%.
Sometimes the fish were labelled as different species in the same family. In Germany, for example, 48% of tested samples purporting to be king scallops were in fact the less coveted Japanese scallop. Of 130 shark fillets bought from Italian fish markets and fishmongers, researchers found a 45% mislabelling rate, with cheaper and unpopular species of shark standing in for those most prized by Italian consumers.
Other substitutes were of endangered or vulnerable species. In one 2018 study, nearly 70% of samples from across the UK sold as snapper were a different fish, from an astounding 38 different species, including many reef‐dwelling species that are probably threatened by habitat degradation and overfishing.
Still other samples proved to be not entirely of aquatic species, with prawn balls sold in Singapore frequently found to contain pork and not a trace of prawn.
Fish fraud has long been a known problem worldwide. Because seafood is among the most internationally traded food commodities, often through complex and opaque supply chains, it is highly vulnerable to mislabelling. Much of the global catch is transported from fishing boats to huge transshipment vessels for processing, where mislabelling is relatively easy and profitable to carry out.
There are “so many opportunities along the seafood supply chain” to falsely label low-value fish as high-value species, or farmed fish as wild, says Beth Lowell, deputy vice-president for US campaigns at Oceana, an international organisation focused on oceans. Study after study has found mislabelling is common everywhere, says Lowell.
However, the studies in question sometimes target species known to be problematic, meaning it is inaccurate to conclude that 36% of all global seafood is necessarily mislabelled. The studies also use different methodologies and samples. Nor are fish always deliberately mislabelled – although the huge majority of substitutions involved lower-priced fish replacing higher-priced ones, indicating fraud rather than carelessness.
The problem appears to be rife in restaurants. One study, representing the first large-scale attempt to examine mislabelling in European restaurants, involved more than 100 scientists who secretly collected seafood samples ordered from 180 restaurants across 23 countries. They sent 283 samples, along with the menu description, date, price, restaurant name and address, to a lab. The DNA in each sample was analysed to identify the species, and then compared with the names on the menu. One out of three restaurants had sold mislabelled seafood.
The highest restaurant mislabelling rates – ranging from 40% to 50% – were in Spain, Iceland, Finland and Germany. Fish such as dusky grouper (“mero”) and butterfish were among the species most frequently mislabelled, while for pike perch, sole, bluefin and yellowfin tuna, there was a 50% chance customers did not get what they had ordered.
Sometimes fish are substituted with similar species – one type of tuna for another, for example. Often, however, the replacement is an entirely different species.
A very common stand-in is little known and inexpensive shark catfish, or pangasius. This group of fish is widely farmed in Vietnam and Cambodia, and has a similar taste and texture to other whitefish, such as cod, sole and haddock.
Other substitutions are more unsettling. For example, mixed seafood products such as prawn balls bought in Singapore markets recorded a mislabelling rate of 38.5%. The prawn balls repeatedly contained pig DNA, researchers found.
And in China, 153 roasted fish fillet products from 30 commercial brands bought at local markets were tested to reveal “an alarming misrepresentation rate of at least 58%”, including some substitutions from the deadly pufferfish family.
Substituted fish can pose health risks. One frequent substitute for some varieties of tuna is escolar, a hard-to-digest oilfish. Others have unique parasites that may threaten health. Still others are less nutritious: when tilapia is a stand-in for red snapper, people are eating a fish with lower levels of nutrients, including lower omega-3 polyunsaturated fatty acids.
Oceana, which has carried out nearly 20 investigations of its own into mislabelling, also did a global review in 2016 of 200 studies from 55 countries, which found that on average one in five fish sampled from fishmongers, supermarkets and restaurants was mislabelled.
The situation does not appear to be improving. In 2019, Oceana found 47% of the samples it tested from food retailers and restaurants in six Canadian cities were mislabelled.
There is considerable economic incentive to sell low-value fish in place of more popular and expensive species – and even more money to be made “laundering” illegally caught fish, says Rashid Sumaila, a fisheries economist at the Institute for the Oceans and Fisheries at the University of British Columbia.
Sumaila calculated in a 2020 study that between 8m and 14m tonnes of fish are caught illegally every year. “That’s like 15 to 20 million cows being stolen every year,” in terms of weight, he said.
“Fish laundering” is often linked to illegal, unreported and unregulated (IUU) catches by large “distant” fleets, in which foreign-flagged vessels operate off the coasts of Africa, Asia and South America. Often, the catches are processed on board large transshipment vessels, where mislabelling and mixing of legal and illegal fish is done in relative secret. The risk of getting caught is low because monitoring and transparency is weak along the seafood supply chain. “People can make a lot of money doing this,” said Sumaila.
Others lose out. Fish laundering results in an economic loss of $26bn–$50bn (£19bn–£36bn) a year, Sumaila’s study concluded, as illegal or fraudulently labelled fish undercuts the legal industry, making it difficult for honest players to compete. “It’s very corrosive,” he said. “If not stopped, illegal fishing just grows.
Many of the studies used relatively new DNA analysis techniques. In one comparison of sales of fish labelled “snapper” by fishmongers, supermarkets and restaurants in Canada, the US, the UK, Singapore, Australia and New Zealand, researchers found mislabelling in about 40% of fish tested. The UK and Canada had the highest rates of mislabelling in that study, at 55%, followed by the US at 38%.
Sometimes the fish were labelled as different species in the same family. In Germany, for example, 48% of tested samples purporting to be king scallops were in fact the less coveted Japanese scallop. Of 130 shark fillets bought from Italian fish markets and fishmongers, researchers found a 45% mislabelling rate, with cheaper and unpopular species of shark standing in for those most prized by Italian consumers.
Other substitutes were of endangered or vulnerable species. In one 2018 study, nearly 70% of samples from across the UK sold as snapper were a different fish, from an astounding 38 different species, including many reef‐dwelling species that are probably threatened by habitat degradation and overfishing.
Still other samples proved to be not entirely of aquatic species, with prawn balls sold in Singapore frequently found to contain pork and not a trace of prawn.
Fish fraud has long been a known problem worldwide. Because seafood is among the most internationally traded food commodities, often through complex and opaque supply chains, it is highly vulnerable to mislabelling. Much of the global catch is transported from fishing boats to huge transshipment vessels for processing, where mislabelling is relatively easy and profitable to carry out.
There are “so many opportunities along the seafood supply chain” to falsely label low-value fish as high-value species, or farmed fish as wild, says Beth Lowell, deputy vice-president for US campaigns at Oceana, an international organisation focused on oceans. Study after study has found mislabelling is common everywhere, says Lowell.
However, the studies in question sometimes target species known to be problematic, meaning it is inaccurate to conclude that 36% of all global seafood is necessarily mislabelled. The studies also use different methodologies and samples. Nor are fish always deliberately mislabelled – although the huge majority of substitutions involved lower-priced fish replacing higher-priced ones, indicating fraud rather than carelessness.
The problem appears to be rife in restaurants. One study, representing the first large-scale attempt to examine mislabelling in European restaurants, involved more than 100 scientists who secretly collected seafood samples ordered from 180 restaurants across 23 countries. They sent 283 samples, along with the menu description, date, price, restaurant name and address, to a lab. The DNA in each sample was analysed to identify the species, and then compared with the names on the menu. One out of three restaurants had sold mislabelled seafood.
The highest restaurant mislabelling rates – ranging from 40% to 50% – were in Spain, Iceland, Finland and Germany. Fish such as dusky grouper (“mero”) and butterfish were among the species most frequently mislabelled, while for pike perch, sole, bluefin and yellowfin tuna, there was a 50% chance customers did not get what they had ordered.
Sometimes fish are substituted with similar species – one type of tuna for another, for example. Often, however, the replacement is an entirely different species.
A very common stand-in is little known and inexpensive shark catfish, or pangasius. This group of fish is widely farmed in Vietnam and Cambodia, and has a similar taste and texture to other whitefish, such as cod, sole and haddock.
Other substitutions are more unsettling. For example, mixed seafood products such as prawn balls bought in Singapore markets recorded a mislabelling rate of 38.5%. The prawn balls repeatedly contained pig DNA, researchers found.
And in China, 153 roasted fish fillet products from 30 commercial brands bought at local markets were tested to reveal “an alarming misrepresentation rate of at least 58%”, including some substitutions from the deadly pufferfish family.
Substituted fish can pose health risks. One frequent substitute for some varieties of tuna is escolar, a hard-to-digest oilfish. Others have unique parasites that may threaten health. Still others are less nutritious: when tilapia is a stand-in for red snapper, people are eating a fish with lower levels of nutrients, including lower omega-3 polyunsaturated fatty acids.
Oceana, which has carried out nearly 20 investigations of its own into mislabelling, also did a global review in 2016 of 200 studies from 55 countries, which found that on average one in five fish sampled from fishmongers, supermarkets and restaurants was mislabelled.
The situation does not appear to be improving. In 2019, Oceana found 47% of the samples it tested from food retailers and restaurants in six Canadian cities were mislabelled.
There is considerable economic incentive to sell low-value fish in place of more popular and expensive species – and even more money to be made “laundering” illegally caught fish, says Rashid Sumaila, a fisheries economist at the Institute for the Oceans and Fisheries at the University of British Columbia.
Sumaila calculated in a 2020 study that between 8m and 14m tonnes of fish are caught illegally every year. “That’s like 15 to 20 million cows being stolen every year,” in terms of weight, he said.
“Fish laundering” is often linked to illegal, unreported and unregulated (IUU) catches by large “distant” fleets, in which foreign-flagged vessels operate off the coasts of Africa, Asia and South America. Often, the catches are processed on board large transshipment vessels, where mislabelling and mixing of legal and illegal fish is done in relative secret. The risk of getting caught is low because monitoring and transparency is weak along the seafood supply chain. “People can make a lot of money doing this,” said Sumaila.
Others lose out. Fish laundering results in an economic loss of $26bn–$50bn (£19bn–£36bn) a year, Sumaila’s study concluded, as illegal or fraudulently labelled fish undercuts the legal industry, making it difficult for honest players to compete. “It’s very corrosive,” he said. “If not stopped, illegal fishing just grows.
Biden Puts Regulators Back In Business
Regulatory Renewal: After Four Years Covering for Big Business, Agencies Get Back to Protecting People
By Phil Mattera, Dirt Diggers Digest - DC REPORT
1/25/2021
One of the biggest betrayals committed by Donald Trump was including a traditional Republican attack on regulation in a purportedly populist agenda.
Trump managed to get many of working-class followers to believe that weakening oversight of business was in their interest. It was actually a boon to the large corporations Trump pretended to challenge.
Some initial steps by President Joe Biden indicate that he is ending the charade and will return regulatory agencies to their intended missions, especially those helping working families. This intention can be seen both in nominations for new agency heads and early confrontations with some Trump holdovers.
One confrontation took place at the Consumer Financial Protection Bureau (CFPB), which was created by the 2010 Dodd-Frank Act. The law incurred the wrath of business-friendly Congressional Republicans for its aggressive enforcement actions against financial sector abuses. Opposing politicians took special aim at the provisions in Dodd-Frank that gave the CFPB’s director a great deal of independence.
The Trump administration worked hard to defang the CFPB. In 2017, it succeeded in putting the agency under the control of the Office of Management and Budget director, Mick Mulvaney, who was openly contemptuous of its mission.
In 2018, Trump named Kathy Kraninger, a Mulvaney crony with no experience in financial regulation, as agency head. After being confirmed on a party-line vote, Kraninger went on to weaken the CFPB’s rules against predatory lending and to reduce enforcement activity against large banks.
Immediately upon taking office, Biden demanded Kraninger’s resignation. Biden was able to take that action because opponents of the agency’s independence had prevailed in a Supreme Court decision. The new administration turned the tables, using the ruling to facilitate reinvigoration of the agency.
While Kraninger agreed to resign, Peter Robb did not. The powerful general counsel of the National Labor Relations Board (NLRB) was sacked. He was anti-union back to his involvement with the Reagan administration’s attack on the air traffic controller’s union.
Robb spent the past three years doing his best to thwart the NLRB mission of promoting collective bargaining. He even tried to limit worker free speech by asking a federal court to bar the use of large inflatable rats on picket lines.
The Biden administration apparently decided it was worth alienating Republicans to stop the damage Robb has been inflicting on labor rights by firing him 10 months before his term expired.
Replacing these key policymakers at the CFPB and the NLRB go a long way in reorienting the agencies back to their mission of protecting working families from the predatory practices of the financial services industry and the abusive practices of employers. They fit together with the overall change of direction signaled in the executive order Biden issued on his first day, reversing Trump’s deregulatory framework.
Let us hope these personnel and broad policy moves will be just the first steps in an extended campaign by the Biden administration to end demonization of regulation and to use the powers of the federal government to promote economic justice.
Trump managed to get many of working-class followers to believe that weakening oversight of business was in their interest. It was actually a boon to the large corporations Trump pretended to challenge.
Some initial steps by President Joe Biden indicate that he is ending the charade and will return regulatory agencies to their intended missions, especially those helping working families. This intention can be seen both in nominations for new agency heads and early confrontations with some Trump holdovers.
One confrontation took place at the Consumer Financial Protection Bureau (CFPB), which was created by the 2010 Dodd-Frank Act. The law incurred the wrath of business-friendly Congressional Republicans for its aggressive enforcement actions against financial sector abuses. Opposing politicians took special aim at the provisions in Dodd-Frank that gave the CFPB’s director a great deal of independence.
The Trump administration worked hard to defang the CFPB. In 2017, it succeeded in putting the agency under the control of the Office of Management and Budget director, Mick Mulvaney, who was openly contemptuous of its mission.
In 2018, Trump named Kathy Kraninger, a Mulvaney crony with no experience in financial regulation, as agency head. After being confirmed on a party-line vote, Kraninger went on to weaken the CFPB’s rules against predatory lending and to reduce enforcement activity against large banks.
Immediately upon taking office, Biden demanded Kraninger’s resignation. Biden was able to take that action because opponents of the agency’s independence had prevailed in a Supreme Court decision. The new administration turned the tables, using the ruling to facilitate reinvigoration of the agency.
While Kraninger agreed to resign, Peter Robb did not. The powerful general counsel of the National Labor Relations Board (NLRB) was sacked. He was anti-union back to his involvement with the Reagan administration’s attack on the air traffic controller’s union.
Robb spent the past three years doing his best to thwart the NLRB mission of promoting collective bargaining. He even tried to limit worker free speech by asking a federal court to bar the use of large inflatable rats on picket lines.
The Biden administration apparently decided it was worth alienating Republicans to stop the damage Robb has been inflicting on labor rights by firing him 10 months before his term expired.
Replacing these key policymakers at the CFPB and the NLRB go a long way in reorienting the agencies back to their mission of protecting working families from the predatory practices of the financial services industry and the abusive practices of employers. They fit together with the overall change of direction signaled in the executive order Biden issued on his first day, reversing Trump’s deregulatory framework.
Let us hope these personnel and broad policy moves will be just the first steps in an extended campaign by the Biden administration to end demonization of regulation and to use the powers of the federal government to promote economic justice.
JPMorgan Chase Bank Wrongly Charged 170,000 Customers Overdraft Fees. Federal Regulators Refused to Penalize It.
Documents and records show that bank examiners have avoided penalizing at least six banks that incorrectly charged overdraft and related fees to hundreds of thousands of customers.
by Patrick Rucker, The Capitol Forum - pro publica
Dec. 14, 5 a.m. EST
Federal bank examiners considered levying fines and sanctions when JPMorgan Chase informed them last year that faulty overdraft charges caused by a software glitch had impacted roughly 170,000 customers.
But the bank urged the Office of the Comptroller of the Currency, or OCC, its chief regulator, to take less severe action, according to two people directly involved in the probe and internal documents reviewed by ProPublica and The Capitol Forum.
Rather than openly penalizing Chase, the nation’s largest bank, OCC officials decided to issue a quiet reprimand — a supervisory letter — that would go into the bank’s file and stay out of public view, according to the people and regulatory paperwork.
The agency’s deputy chief counsel, Bao Nguyen, approved the supervisory letter in June and accepted Chase’s explanation of the incident and its promise to repay its customers, according to the people and regulatory paperwork.
Since 2017, when President Donald Trump took office, the OCC has found at least six banks wrongly charged overdrafts and related fees, but in each case, the agency quietly rebuked the bank rather than pushing for fines and public penalties, the investigation by ProPublica and The Capitol Forum shows.
In several instances, front-line examiners who wanted the bank to be fined were overruled by OCC officials. The previously unreported cases show how the OCC under Trump quietly held back from punishing banks for abuses, while the administration sought more broadly to loosen banking rules and other consumer financial protections.
Brian Brooks, a former bank executive, has led the OCC on a temporary basis since May; last month, the president nominated Brooks to a full, five-year term.
Brooks and his predecessor at the OCC, Joseph Otting, both helped run OneWest Bank, a lender that Treasury Secretary Steve Mnuchin founded in the aftermath of the 2009 financial crisis.
Banks found to have charged excessive overdraft fees and other faulty charges include Wall Street giants such as JPMorgan Chase, American Express and U.S. Bank and large regional lenders such as Zions Bank, Union Bank and First Horizon.
An OCC spokesman said the agency would not comment on the specific instances cited in this story because such matters are confidential. The OCC has a range of tools to police bank misconduct, the spokesman said.
---
Big banks collect over $11 billion in overdraft-related fees each year, according to a report from the Center for Responsible Lending, which found in a study that punitive bank fees often hit vulnerable customers the hardest.
Overdraft policies vary by bank but the typical fee is $35, and a customer can accrue additional penalties multiple times a day, CRL reported. Banks could simply decline a charge if a customer lacked the funds, but instead lenders promote “overdraft protection” as a convenience that comes at a cost. For customers whose accounts often hover near zero, that convenience is just another snare in a financial trap, said Rebecca Bourné, a CRL lawyer who worked on the study.
“Imagine you struggled to buy groceries over the weekend and you wake up Monday to $100 in overdraft fees,” Bourné said. “That happens to people who can least afford to pay.”
Chase had promised some online customers that they would get an alert before their accounts went negative, but the bank told the OCC that did not happen as roughly 170,000 accounts dwindled to zero, according to industry and regulatory officials. Chase charges $34 for an overdraft and allows three such charges a day on an account with insufficient funds. A customer could be charged as much as $102 per day.
Chase, which operates nearly 5,000 locations nationwide, reported the faulty auto alerts to the OCC as required, but the problem had stayed out of public view until now.
“We found that some customers were not receiving some account alerts due to a systems issue in 2018,” Chase spokesman Michael Fusco said. “We have fixed the issue, proactively notified and reimbursed affected customers.”
Chase had roughly 52 million active digital customers at the end of last year, according to securities filings, and that figure has grown by millions each year over the last several years.[...]
(more)
But the bank urged the Office of the Comptroller of the Currency, or OCC, its chief regulator, to take less severe action, according to two people directly involved in the probe and internal documents reviewed by ProPublica and The Capitol Forum.
Rather than openly penalizing Chase, the nation’s largest bank, OCC officials decided to issue a quiet reprimand — a supervisory letter — that would go into the bank’s file and stay out of public view, according to the people and regulatory paperwork.
The agency’s deputy chief counsel, Bao Nguyen, approved the supervisory letter in June and accepted Chase’s explanation of the incident and its promise to repay its customers, according to the people and regulatory paperwork.
Since 2017, when President Donald Trump took office, the OCC has found at least six banks wrongly charged overdrafts and related fees, but in each case, the agency quietly rebuked the bank rather than pushing for fines and public penalties, the investigation by ProPublica and The Capitol Forum shows.
In several instances, front-line examiners who wanted the bank to be fined were overruled by OCC officials. The previously unreported cases show how the OCC under Trump quietly held back from punishing banks for abuses, while the administration sought more broadly to loosen banking rules and other consumer financial protections.
Brian Brooks, a former bank executive, has led the OCC on a temporary basis since May; last month, the president nominated Brooks to a full, five-year term.
Brooks and his predecessor at the OCC, Joseph Otting, both helped run OneWest Bank, a lender that Treasury Secretary Steve Mnuchin founded in the aftermath of the 2009 financial crisis.
Banks found to have charged excessive overdraft fees and other faulty charges include Wall Street giants such as JPMorgan Chase, American Express and U.S. Bank and large regional lenders such as Zions Bank, Union Bank and First Horizon.
An OCC spokesman said the agency would not comment on the specific instances cited in this story because such matters are confidential. The OCC has a range of tools to police bank misconduct, the spokesman said.
---
Big banks collect over $11 billion in overdraft-related fees each year, according to a report from the Center for Responsible Lending, which found in a study that punitive bank fees often hit vulnerable customers the hardest.
Overdraft policies vary by bank but the typical fee is $35, and a customer can accrue additional penalties multiple times a day, CRL reported. Banks could simply decline a charge if a customer lacked the funds, but instead lenders promote “overdraft protection” as a convenience that comes at a cost. For customers whose accounts often hover near zero, that convenience is just another snare in a financial trap, said Rebecca Bourné, a CRL lawyer who worked on the study.
“Imagine you struggled to buy groceries over the weekend and you wake up Monday to $100 in overdraft fees,” Bourné said. “That happens to people who can least afford to pay.”
Chase had promised some online customers that they would get an alert before their accounts went negative, but the bank told the OCC that did not happen as roughly 170,000 accounts dwindled to zero, according to industry and regulatory officials. Chase charges $34 for an overdraft and allows three such charges a day on an account with insufficient funds. A customer could be charged as much as $102 per day.
Chase, which operates nearly 5,000 locations nationwide, reported the faulty auto alerts to the OCC as required, but the problem had stayed out of public view until now.
“We found that some customers were not receiving some account alerts due to a systems issue in 2018,” Chase spokesman Michael Fusco said. “We have fixed the issue, proactively notified and reimbursed affected customers.”
Chase had roughly 52 million active digital customers at the end of last year, according to securities filings, and that figure has grown by millions each year over the last several years.[...]
(more)
Big Pharma is the disease
Our worst pre-existing condition: Big Pharma
Tax aversion and using public funds for private profits are part and parcel to the pharmaceutical industry
By BOB HENNELLY
NOVEMBER 27, 2020 3:00PM (UTC)
Before COVID, the headlines you might read about the pharmaceutical industry tended towards corporate malfeasance — violations of the Foreign Practices Corruption Act, insider trading, abusive mass marketing of opioids or predatory pricing, that sort of thing. Few think of such a notoriously manipulative industry as heralding medical breakthroughs.
But with a quarter of a million American deaths and another 12 million COVID cases, we are being told by the corporate news media these same companies are going to save life on the planet as we once knew it pre-pandemic.
Several months of worsening news about the pandemic, including decimating personal tragedies and loss on a scale not seen since the beginning of the last century, has reduced us to a childlike state looking for our parents that may already be dead.
Lost in transit
The mainstream news media agrees that Donald Trump's attempts to derail the peaceful transition of power is reckless. Yet they have failed to critically examine his decision to have our nation defer to the profit-driven pharma sector the efforts to beat COVID. Indeed, the research to create a vaccine is almost entirely publicly-funded, though the effort has entrusted to the private sector with little oversight.
As Michael Hiltzik recently wrote in his Los Angeles Times op-ed entitled "The Colossal Problem of Publicly Funded Vaccines in Private Hands," the Trump junta's blank check is going to an industry that has long "profited from billions of dollars in government scientific research without returning anything to taxpayers."
The U.S. Treasury's largesse towards the multinational pharma profiteers includes not merely billions of dollars in taxpayer funded-research for them to profit off of, but also guaranteed orders for the millions of doses of vaccine from the government.
Hiltzik quotes Peter Maybarduk, director of the Access to Medicines Program at the non-profit Public Citizen, who suggests the US has "considerably slowed the global timetable" in the COVID fight "by bestowing billions in grants to companies "and asking them to develop manufacturing arrangements that are in their interest rather than pooling resources saying we're going to teach the world how to make these vaccines and using all the available manufacturing capacity."
There's a tragic irony that we are relying so heavily on an industry that's a pillar of our for-profit health care system — one that rations care and feeds off of scarcity and disease — to deliver us from a pandemic.
The multinational pharmaceutical industry is the foundation of the American health care system that rations medical care based on the ability to pay. It has been its own kind of killer virus, and the industry permitted the proliferation of chronic diseases in the ranks of the poor and working classes — in turn serving as a form of race- and class-based social control, one that is increasingly revealing itself with each day's new COVID body count.
As Reverend William Barber pointed out during the Democratic primary campaign of 2020, there was, long before COVID, a raging pandemic that fed off of poverty playing out daily. This pandemic lived below the corporate news media radar, and prematurely claimed the lives of 250,000 Americans every year.
Big pharma, and our winner-take-all economic system, is implicated in those deaths. Back in 2018, a report by the Harvard T.H. Chan School of Public Health, the Harvard Global Health Institute, and the London School of Economics found that the US paid twice as much as other high-income countries for health care only to get poorer population health outcomes.
"The main drivers of higher health care spending in the U.S. are generally high prices — for salaries of physicians and nurses, pharmaceuticals, medical devices, and administration," the report's researchers say.
Making a killing
It's been the pharma companies, along with big tech firms like Amazon and Google, that have perfected the legal three-card-monte of profit-shifting to offshore jurisdiction hundreds of billions of dollars annually that starves public health care systems globally.
For decades, economists and public interest tax experts have flagged this accelerating "race to the bottom," where multinationals and the holders of vast personal fortunes reduce or eliminate entirely their tax bill by pitting the nations of the world against each other.
This continued beggaring of local, state and national governments by the wealthiest, including pharma companies, comes as our public health sector crumbles under the weight of the resource scarcity that resulted from generations of this hoarding and hiding of profits often generated by taxpayer-funded research.
A nurse's pay a second
Last week, thanks to the research generated by the international Tax Justice Network (TJN), we were able to quantify the scale of the impact of how pharmaceutical (and other) corporations have rigged tax codes to their advantage across the world.
TJN reports that even as the world's "pandemic-fatigued countries… struggle to cope with second and third waves of coronavirus," they have been losing "over $427 billion in tax each year to international corporate tax abuse and private tax evasion, costing countries altogether the equivalent of nearly 34 million nurses' annual salaries every year – or one nurse's annual salary every second."
"Pharma companies like Pfizer, along with software and internet companies, have been the major players in global tax dodging and designing the new mechanisms since the later 1990s that move lots of profits to low tax jurisdictions in the form of untaxed royalties that they pay themselves to offshore companies that they own," explains James Henry, a New York based economist and lawyer who is a senior advisor to TJN.
There are surely tens of thousands of committed scientists and technicians working at "warp speed" to develop a safe and effective vaccine out of a sense of moral duty. But we would be foolish to forget that big pharma itself is fueled by a maniacal pursuit of profits. And as an industry, it has shown the same kind of contempt for the law as the current occupant of the White House.
Above and beyond the law
Like Trump, Big Pharma are ruthless and unrepentant. Yet, because of the scale of the money involved in their crimes, our legal system actually shields them from personal criminal prosecution — as it did with the Wall Street banks in the Great Heist of 2008.
As it turns out, the most important duty for our Department of Justice, no matter which party controls the White House, appears to be to twist the law to preserve capital and keep great fortunes intact, while feigning to prosecute the corporate shell in the public interest.
This is critical, because today's federal prosecutors and regulators are all-too-often the farm team for tomorrow's over-compensated captains of industry.
Take Purdue Pharma, whose predatory marketing of the highly addictive opioid Oxycontin helped set off double-digit percentage spikes in drug overdose deaths that have killed more than 400,000 Americans since 1999.
In 2007, Purdue Pharma entered into a Department of Justice deal that required they plead guilty to a felony and pay a $600 million dollar fine for misleading and defrauding the public, including physicians, about their signature drug OxyContin.
Yet, some members of the bulletproof Sackler family, some of whom were heirs of the Purdue fortune, were allowed to transfer $10 billion out of their accounts between 2008 and 2018, according to an audit that was released while Purdue sought bankruptcy protection in September.
Last month, serial offender Purdue Pharma agreed to plead guilty to three federal crimes including producing highly addictive drugs "without legitimate medical purpose" in a deal with the Trump/Barr Department of Justice that was denounced as a "failure" by Massachusetts Attorney General Maura Healey.
"DOJ failed," tweeted Healey. "Justice in this case requires exposing the perpetrators accountable, not rushing a settlement to beat an election. I am not done with Purdue and the Sacklers, and I will never sell out the families who have been calling for justice for so long."
Walking wounded
Even before COVID, 140 million Americans struggled week to week trying to make ends meet, which they often did by cutting health care corners.
For three years before COVID hit, America's life expectancy was on the decline. How many members of Congress sounded the alarm? The last time such a demographic event happened was in the years leading up to the First World War and the Spanish Flu epidemic, when 675,000 Americans, and 50 million people worldwide, died.
Currently, with more than 250,000 deaths here in the U.S. and 1.2 million globally, there seems to be something truly exceptional about America's bout with the COVID scourge.
In the post-election interregnum, the prognosis is bleak. The U.S Treasury is sending out billions to Big Pharma, while rushing to close off access to Federal Reserve borrowing for small businesses and local governments. Unemployment benefits for 12 million Americans sidelined by COVID are set to run out the day after Christmas.
Just as individuals may have preexisting conditions that make them more susceptible to COVID-19, so does our economic system, which lets tens of millions of families teeter on the edge so as to provide the cheap labor on which billionaires' fortunes rely.
There can be no honest critique of how we got here without noting "the gross failure of the U.S. private, profit-driven, capitalist medical-industrial complex (four industries: doctors, drug and device makers, and medical insurance firms)" who "decided not to prepare for a serious virus problem," writes economist Richard Wolff in his latest book "The Sickness is the System."
Our only enduring remedy is radical change.
But with a quarter of a million American deaths and another 12 million COVID cases, we are being told by the corporate news media these same companies are going to save life on the planet as we once knew it pre-pandemic.
Several months of worsening news about the pandemic, including decimating personal tragedies and loss on a scale not seen since the beginning of the last century, has reduced us to a childlike state looking for our parents that may already be dead.
Lost in transit
The mainstream news media agrees that Donald Trump's attempts to derail the peaceful transition of power is reckless. Yet they have failed to critically examine his decision to have our nation defer to the profit-driven pharma sector the efforts to beat COVID. Indeed, the research to create a vaccine is almost entirely publicly-funded, though the effort has entrusted to the private sector with little oversight.
As Michael Hiltzik recently wrote in his Los Angeles Times op-ed entitled "The Colossal Problem of Publicly Funded Vaccines in Private Hands," the Trump junta's blank check is going to an industry that has long "profited from billions of dollars in government scientific research without returning anything to taxpayers."
The U.S. Treasury's largesse towards the multinational pharma profiteers includes not merely billions of dollars in taxpayer funded-research for them to profit off of, but also guaranteed orders for the millions of doses of vaccine from the government.
Hiltzik quotes Peter Maybarduk, director of the Access to Medicines Program at the non-profit Public Citizen, who suggests the US has "considerably slowed the global timetable" in the COVID fight "by bestowing billions in grants to companies "and asking them to develop manufacturing arrangements that are in their interest rather than pooling resources saying we're going to teach the world how to make these vaccines and using all the available manufacturing capacity."
There's a tragic irony that we are relying so heavily on an industry that's a pillar of our for-profit health care system — one that rations care and feeds off of scarcity and disease — to deliver us from a pandemic.
The multinational pharmaceutical industry is the foundation of the American health care system that rations medical care based on the ability to pay. It has been its own kind of killer virus, and the industry permitted the proliferation of chronic diseases in the ranks of the poor and working classes — in turn serving as a form of race- and class-based social control, one that is increasingly revealing itself with each day's new COVID body count.
As Reverend William Barber pointed out during the Democratic primary campaign of 2020, there was, long before COVID, a raging pandemic that fed off of poverty playing out daily. This pandemic lived below the corporate news media radar, and prematurely claimed the lives of 250,000 Americans every year.
Big pharma, and our winner-take-all economic system, is implicated in those deaths. Back in 2018, a report by the Harvard T.H. Chan School of Public Health, the Harvard Global Health Institute, and the London School of Economics found that the US paid twice as much as other high-income countries for health care only to get poorer population health outcomes.
"The main drivers of higher health care spending in the U.S. are generally high prices — for salaries of physicians and nurses, pharmaceuticals, medical devices, and administration," the report's researchers say.
Making a killing
It's been the pharma companies, along with big tech firms like Amazon and Google, that have perfected the legal three-card-monte of profit-shifting to offshore jurisdiction hundreds of billions of dollars annually that starves public health care systems globally.
For decades, economists and public interest tax experts have flagged this accelerating "race to the bottom," where multinationals and the holders of vast personal fortunes reduce or eliminate entirely their tax bill by pitting the nations of the world against each other.
This continued beggaring of local, state and national governments by the wealthiest, including pharma companies, comes as our public health sector crumbles under the weight of the resource scarcity that resulted from generations of this hoarding and hiding of profits often generated by taxpayer-funded research.
A nurse's pay a second
Last week, thanks to the research generated by the international Tax Justice Network (TJN), we were able to quantify the scale of the impact of how pharmaceutical (and other) corporations have rigged tax codes to their advantage across the world.
TJN reports that even as the world's "pandemic-fatigued countries… struggle to cope with second and third waves of coronavirus," they have been losing "over $427 billion in tax each year to international corporate tax abuse and private tax evasion, costing countries altogether the equivalent of nearly 34 million nurses' annual salaries every year – or one nurse's annual salary every second."
"Pharma companies like Pfizer, along with software and internet companies, have been the major players in global tax dodging and designing the new mechanisms since the later 1990s that move lots of profits to low tax jurisdictions in the form of untaxed royalties that they pay themselves to offshore companies that they own," explains James Henry, a New York based economist and lawyer who is a senior advisor to TJN.
There are surely tens of thousands of committed scientists and technicians working at "warp speed" to develop a safe and effective vaccine out of a sense of moral duty. But we would be foolish to forget that big pharma itself is fueled by a maniacal pursuit of profits. And as an industry, it has shown the same kind of contempt for the law as the current occupant of the White House.
Above and beyond the law
Like Trump, Big Pharma are ruthless and unrepentant. Yet, because of the scale of the money involved in their crimes, our legal system actually shields them from personal criminal prosecution — as it did with the Wall Street banks in the Great Heist of 2008.
As it turns out, the most important duty for our Department of Justice, no matter which party controls the White House, appears to be to twist the law to preserve capital and keep great fortunes intact, while feigning to prosecute the corporate shell in the public interest.
This is critical, because today's federal prosecutors and regulators are all-too-often the farm team for tomorrow's over-compensated captains of industry.
Take Purdue Pharma, whose predatory marketing of the highly addictive opioid Oxycontin helped set off double-digit percentage spikes in drug overdose deaths that have killed more than 400,000 Americans since 1999.
In 2007, Purdue Pharma entered into a Department of Justice deal that required they plead guilty to a felony and pay a $600 million dollar fine for misleading and defrauding the public, including physicians, about their signature drug OxyContin.
Yet, some members of the bulletproof Sackler family, some of whom were heirs of the Purdue fortune, were allowed to transfer $10 billion out of their accounts between 2008 and 2018, according to an audit that was released while Purdue sought bankruptcy protection in September.
Last month, serial offender Purdue Pharma agreed to plead guilty to three federal crimes including producing highly addictive drugs "without legitimate medical purpose" in a deal with the Trump/Barr Department of Justice that was denounced as a "failure" by Massachusetts Attorney General Maura Healey.
"DOJ failed," tweeted Healey. "Justice in this case requires exposing the perpetrators accountable, not rushing a settlement to beat an election. I am not done with Purdue and the Sacklers, and I will never sell out the families who have been calling for justice for so long."
Walking wounded
Even before COVID, 140 million Americans struggled week to week trying to make ends meet, which they often did by cutting health care corners.
For three years before COVID hit, America's life expectancy was on the decline. How many members of Congress sounded the alarm? The last time such a demographic event happened was in the years leading up to the First World War and the Spanish Flu epidemic, when 675,000 Americans, and 50 million people worldwide, died.
Currently, with more than 250,000 deaths here in the U.S. and 1.2 million globally, there seems to be something truly exceptional about America's bout with the COVID scourge.
In the post-election interregnum, the prognosis is bleak. The U.S Treasury is sending out billions to Big Pharma, while rushing to close off access to Federal Reserve borrowing for small businesses and local governments. Unemployment benefits for 12 million Americans sidelined by COVID are set to run out the day after Christmas.
Just as individuals may have preexisting conditions that make them more susceptible to COVID-19, so does our economic system, which lets tens of millions of families teeter on the edge so as to provide the cheap labor on which billionaires' fortunes rely.
There can be no honest critique of how we got here without noting "the gross failure of the U.S. private, profit-driven, capitalist medical-industrial complex (four industries: doctors, drug and device makers, and medical insurance firms)" who "decided not to prepare for a serious virus problem," writes economist Richard Wolff in his latest book "The Sickness is the System."
Our only enduring remedy is radical change.
Tyson Exploits Consumers Just Like Its Animals and the Workers Who Raise Them
BY David Coman-Hidy, Truthout
PUBLISHED November 22, 2020
The actions of the U.S. meat industry throughout the pandemic have brought to light the true corruption and waste that are inherent within our food system. Despite a new wave of rising COVID-19 cases, the U.S. Department of Agriculture recently submitted a proposal to further increase slaughter line speeds by 25 percent, which are already far too fast and highly dangerous. It’s evident that the industry will exploit its workers and animals all to boost its profit.
The revelations continued when Tyson Foods, the world’s second-largest producer of chicken, beef and pork, cooperated with the Department of Justice to avoid scrutiny into the company’s role in the monopolization of the industry to fix prices of chicken for both consumers and retailers. This news comes at a time when Tyson has already been under fire for exposing its workers to an enormous risk of contracting COVID-19. We can now add competitors and consumers to the ever-growing list of those victimized by the corporate giant. This is further evidence that it’s time for our nation’s food supply chain to change in a big way.
Tyson Foods former CEO Noel White, replaced by Dean Banks in October, rushed to cooperate under the Department of Justice’s antitrust leniency program, stating, “I am proud to lead a company that took appropriate and immediate actions in reporting the wrongdoing we discovered to the Department of Justice.” What White failed to mention is that cooperating will afford Tyson protection from public scrutiny and legal fines, at the expense of its competitors.
Unethical business practices seem to be the norm for Tyson Foods. Due to a lack of proper safety measures and harsh attendance policies, more than 10,000 Tyson plant workers tested positive for the virus, substantially more than any other U.S. meat company. Before the pandemic, working on a meat processing line was one of the most dangerous jobs in the United States. Now, with the constant threat of COVID-19 looming over these elbow-to-elbow assembly lines, meat processing may be among the most deadly jobs in the world. Workers are not just getting sick from this virus — they’re dying.
The pandemic has led to major disruptions in the supply chain. While Tyson has not yet engaged in the mass “depopulation” of animals that other producers resorted to, in a typical week, the company slaughters an estimated 37 million chickens. The poor treatment of the chickens within its supply chain — including breeding birds to grow at such an unnaturally fast rate that they can’t even hold up their own bodies — has made Tyson the target of public campaigns urging the company to make meaningful changes.
More than 120 labor, food justice, animal welfare and environmental organizations have banded together to take action against the company. Tyson must take immediate action to protect the safety and well-being of its workers, make improvements to support animal welfare and reduce its harsh impact on the environment.
For too long, the unethical, avaricious practices of the meat industry have been hidden from view. The scandals surrounding Tyson and other major producers are making clear that vulnerable workers, abused animals and a rigged system are the foundation of an unethical and destructive business model.
Tyson had a role in creating the industrialized system, and it must step up its role in fixing it. The meat giant has had one singular focus since its inception: profit. The company’s greed has caused it to exploit anyone in its path. Tyson’s disregard for human and animal life extends to its workers, animals killed in its plants, consumers and now its competitors. Tyson took ownership for rigging the system using price-fixing. It’s time for Tyson to take ownership for exploiting and endangering its more vulnerable victims as well.
The revelations continued when Tyson Foods, the world’s second-largest producer of chicken, beef and pork, cooperated with the Department of Justice to avoid scrutiny into the company’s role in the monopolization of the industry to fix prices of chicken for both consumers and retailers. This news comes at a time when Tyson has already been under fire for exposing its workers to an enormous risk of contracting COVID-19. We can now add competitors and consumers to the ever-growing list of those victimized by the corporate giant. This is further evidence that it’s time for our nation’s food supply chain to change in a big way.
Tyson Foods former CEO Noel White, replaced by Dean Banks in October, rushed to cooperate under the Department of Justice’s antitrust leniency program, stating, “I am proud to lead a company that took appropriate and immediate actions in reporting the wrongdoing we discovered to the Department of Justice.” What White failed to mention is that cooperating will afford Tyson protection from public scrutiny and legal fines, at the expense of its competitors.
Unethical business practices seem to be the norm for Tyson Foods. Due to a lack of proper safety measures and harsh attendance policies, more than 10,000 Tyson plant workers tested positive for the virus, substantially more than any other U.S. meat company. Before the pandemic, working on a meat processing line was one of the most dangerous jobs in the United States. Now, with the constant threat of COVID-19 looming over these elbow-to-elbow assembly lines, meat processing may be among the most deadly jobs in the world. Workers are not just getting sick from this virus — they’re dying.
The pandemic has led to major disruptions in the supply chain. While Tyson has not yet engaged in the mass “depopulation” of animals that other producers resorted to, in a typical week, the company slaughters an estimated 37 million chickens. The poor treatment of the chickens within its supply chain — including breeding birds to grow at such an unnaturally fast rate that they can’t even hold up their own bodies — has made Tyson the target of public campaigns urging the company to make meaningful changes.
More than 120 labor, food justice, animal welfare and environmental organizations have banded together to take action against the company. Tyson must take immediate action to protect the safety and well-being of its workers, make improvements to support animal welfare and reduce its harsh impact on the environment.
For too long, the unethical, avaricious practices of the meat industry have been hidden from view. The scandals surrounding Tyson and other major producers are making clear that vulnerable workers, abused animals and a rigged system are the foundation of an unethical and destructive business model.
Tyson had a role in creating the industrialized system, and it must step up its role in fixing it. The meat giant has had one singular focus since its inception: profit. The company’s greed has caused it to exploit anyone in its path. Tyson’s disregard for human and animal life extends to its workers, animals killed in its plants, consumers and now its competitors. Tyson took ownership for rigging the system using price-fixing. It’s time for Tyson to take ownership for exploiting and endangering its more vulnerable victims as well.
Top hospitals charging patients up to 1,800% more for services than they actually cost: study
The leading nurses union says the study highlights the need for a Medicare for All system to limit high markups
By IGOR DERYSH - salon
NOVEMBER 22, 2020 1:00PM (UTC)
Hospitals in the United States charge patients as much as 1,800% more than their costs amid the coronavirus pandemic, according to a new study.
The 100 most expensive hospitals in the United States charge between $1,129 and $1,808 for every $100 of their costs, according to a study by National Nurses United, the largest nurses union in the country.
Overall, hospitals across the US charge an average of $417 for every $100 of their costs. The average markup has more than doubled over the past two decades, according to the report.
The markups have resulted in hospital profits skyrocketing by 411% from 1999 to 2017, hitting a record $88 billion.
"The rise in charges coincides with growing hospital mergers and acquisitions by large systems," the union said in a news release. "The result is increased market consolidation, which leads to higher profits and increased charges, not savings for patients as hospital systems often claim."
Medical workers worry that high costs will increase the number of people avoiding medical care.
"There is no excuse for these scandalous prices. These are not markups for luxury condo views, they are for the most basic necessity of your life: your health," nurse Jean Ross, the president of the union, said in a statement.
"Unpayable charges are a calamity for our patients, too many of whom avoid— at great risk to their health — the medical care they need due to the high cost, or they become burdened by devastating debt, hounded by bill collectors or driven into bankruptcy."
The union warned that "high hospital charges also drive up Covid-19 treatment costs."
A study by the health care data nonprofit FAIR Health in the spring found that uninsured coronavirus patients or those that receive care considered out-of-network by their insurer face costs ranging from $42,486 to $74,310 if they require inpatient hospital treatment.
A survey by the health care research group the Commonwealth Fund also found that more than two-thirds of Americans say that "potential out-of-pocket costs would be very or somewhat important in their decision to seek care if they had symptoms of the coronavirus."
While insurers often negotiate prices with hospitals, uninsured patients have little recourse. And as with other health care and coronavirus-related disparities, people of color are disproportionately impacted. Latinos are nearly three times as likely and Black people are nearly twice as likely to be uninsured than white Americans, according to a study from the Kaiser Family Foundation.
The National Nurses United report argued that the findings further make the case for a Medicare for All system because Medicare is the "most effective" system to limit price gouging.
"The most viable solution to slowing the growth in hospital charges and the continued inflation of hospital prices, is to bring all health care purchasers together, under a public, nationwide single-payer plan," the report said.
The RAND Corporation, a nonprofit think tank, found that hospitals charged private insurers an average of 2.4 times more than Medicare rates.
"Nurses know that the best way to rein in these outrageous charges that create such grievous harm for our patients is with Medicare for All, as other countries have proven," said Ross, the union president. "Medicare for All will not only guarantee health care coverage for every person in the United States, it will end medical bankruptcies, medical debt lawsuits, and the health insecurity faced by millions who make painful choices every day about whether to seek the care they desperately need."
Republicans like President Donald Trump and centrist Democrats like President-elect Joe Biden have forcefully pushed back on the idea of a single-payer health system, arguing that it would kick tens of millions of people off their employer-provided insurance and vastly increase the federal budget.
Hospitals have also argued that they lose money under Medicare.
"Medicare payment rates, which reimburse below the cost of care, should not be held as a standard benchmark for hospital prices," Melinda Hatton of the American Hospital Association, an industry trade group, told The New York Times. "Simply shifting to prices based on artificially low Medicare payment rates would strip vital resources from already strapped communities, seriously impeding access to care."
But the disparity between insurer and Medicare rates shows "market forces are clearly not working," Richard Scheffler, a health economist at the University of California, Berkeley, told the outlet. "Prices vary widely and are two and a half times higher than Medicare payment rates without any apparent reason."
Studies have repeatedly shown that single-payer systems vastly drive down the cost of health care, as they have in countries that have long had such systems.
A study published in the Annals of Internal Medicine earlier this year found that 34% of health care expenditures go toward administrative costs alone. The US spent about $2,497 per person on administrative costs in 2017, compared to $551 per person in Canada, which has a single-payer system. Switching to a single-payer system would drive down health care costs by $600 billion on administrative costs alone, according to the analysis.
"Americans spend twice as much per person as Canadians on health care. But instead of buying better care, that extra spending buys us sky-high profits and useless paperwork," lead author Dr. David Himmelstein, a professor at the CUNY School of Public Health at Hunter College, said in a statement.
Another study published in The Lancet earlier this year found that Medicare for All would save the country about $450 billion per year while preventing more than 68,000 unnecessary deaths annually.
Lead researcher Dr. Alison Galvani, an epidemiologist and director of the Center for Infectious Disease Modeling and Analysis at Yale University, argued that Biden's proposal to essentially expand Obamacare could actually increase costs compared to the Medicare for All plan that the president-elect decried during the primaries as too costly.
"Without the savings to overhead, pharmaceutical costs, hospital/clinical fees, and fraud detection, 'Medicare for all who want it' could annually cost $175 billion dollars more than status quo," she told Newsweek. "That's over $600 billion more than Medicare for all."
An analysis published in PLOS Medicine of 22 single-payer studies showed that 19 of them "predicted net savings ... in the first year of program operation and 20 ... predicted savings over several years; anticipated growth rates would result in long-term net savings for all plans."
Critics have argued that reducing costs by switching to a single-payer system would result in doctor shortages and the rationing of health care. But data shows that fewer than 1% of doctors have opted out of the existing Medicare and Medicaid programs, with nearly half of those being psychiatrists. Single-payer proponents also dismiss rationing claims, arguing that Americans are already effectively self-rationing due to sky-high costs, even for those with private insurance.
A Federal Reserve survey published last year found that about 25% of American "adults skipped necessary medical care in 2018 because they were unable to afford the cost." Another survey found that 26% of Americans with diabetes have rationed their insulin, primarily due to the cost.
"It would be a missed opportunity for America to ignore lessons about universal coverage from other countries out of a fear that they ration health care more than we do," researchers at the Commonwealth Fund warned in a report last year. "In reality, more people in the U.S. forgo needed health care because access to care is rationed through lack of access to adequate insurance or unaffordable services and treatments."
The 100 most expensive hospitals in the United States charge between $1,129 and $1,808 for every $100 of their costs, according to a study by National Nurses United, the largest nurses union in the country.
Overall, hospitals across the US charge an average of $417 for every $100 of their costs. The average markup has more than doubled over the past two decades, according to the report.
The markups have resulted in hospital profits skyrocketing by 411% from 1999 to 2017, hitting a record $88 billion.
"The rise in charges coincides with growing hospital mergers and acquisitions by large systems," the union said in a news release. "The result is increased market consolidation, which leads to higher profits and increased charges, not savings for patients as hospital systems often claim."
Medical workers worry that high costs will increase the number of people avoiding medical care.
"There is no excuse for these scandalous prices. These are not markups for luxury condo views, they are for the most basic necessity of your life: your health," nurse Jean Ross, the president of the union, said in a statement.
"Unpayable charges are a calamity for our patients, too many of whom avoid— at great risk to their health — the medical care they need due to the high cost, or they become burdened by devastating debt, hounded by bill collectors or driven into bankruptcy."
The union warned that "high hospital charges also drive up Covid-19 treatment costs."
A study by the health care data nonprofit FAIR Health in the spring found that uninsured coronavirus patients or those that receive care considered out-of-network by their insurer face costs ranging from $42,486 to $74,310 if they require inpatient hospital treatment.
A survey by the health care research group the Commonwealth Fund also found that more than two-thirds of Americans say that "potential out-of-pocket costs would be very or somewhat important in their decision to seek care if they had symptoms of the coronavirus."
While insurers often negotiate prices with hospitals, uninsured patients have little recourse. And as with other health care and coronavirus-related disparities, people of color are disproportionately impacted. Latinos are nearly three times as likely and Black people are nearly twice as likely to be uninsured than white Americans, according to a study from the Kaiser Family Foundation.
The National Nurses United report argued that the findings further make the case for a Medicare for All system because Medicare is the "most effective" system to limit price gouging.
"The most viable solution to slowing the growth in hospital charges and the continued inflation of hospital prices, is to bring all health care purchasers together, under a public, nationwide single-payer plan," the report said.
The RAND Corporation, a nonprofit think tank, found that hospitals charged private insurers an average of 2.4 times more than Medicare rates.
"Nurses know that the best way to rein in these outrageous charges that create such grievous harm for our patients is with Medicare for All, as other countries have proven," said Ross, the union president. "Medicare for All will not only guarantee health care coverage for every person in the United States, it will end medical bankruptcies, medical debt lawsuits, and the health insecurity faced by millions who make painful choices every day about whether to seek the care they desperately need."
Republicans like President Donald Trump and centrist Democrats like President-elect Joe Biden have forcefully pushed back on the idea of a single-payer health system, arguing that it would kick tens of millions of people off their employer-provided insurance and vastly increase the federal budget.
Hospitals have also argued that they lose money under Medicare.
"Medicare payment rates, which reimburse below the cost of care, should not be held as a standard benchmark for hospital prices," Melinda Hatton of the American Hospital Association, an industry trade group, told The New York Times. "Simply shifting to prices based on artificially low Medicare payment rates would strip vital resources from already strapped communities, seriously impeding access to care."
But the disparity between insurer and Medicare rates shows "market forces are clearly not working," Richard Scheffler, a health economist at the University of California, Berkeley, told the outlet. "Prices vary widely and are two and a half times higher than Medicare payment rates without any apparent reason."
Studies have repeatedly shown that single-payer systems vastly drive down the cost of health care, as they have in countries that have long had such systems.
A study published in the Annals of Internal Medicine earlier this year found that 34% of health care expenditures go toward administrative costs alone. The US spent about $2,497 per person on administrative costs in 2017, compared to $551 per person in Canada, which has a single-payer system. Switching to a single-payer system would drive down health care costs by $600 billion on administrative costs alone, according to the analysis.
"Americans spend twice as much per person as Canadians on health care. But instead of buying better care, that extra spending buys us sky-high profits and useless paperwork," lead author Dr. David Himmelstein, a professor at the CUNY School of Public Health at Hunter College, said in a statement.
Another study published in The Lancet earlier this year found that Medicare for All would save the country about $450 billion per year while preventing more than 68,000 unnecessary deaths annually.
Lead researcher Dr. Alison Galvani, an epidemiologist and director of the Center for Infectious Disease Modeling and Analysis at Yale University, argued that Biden's proposal to essentially expand Obamacare could actually increase costs compared to the Medicare for All plan that the president-elect decried during the primaries as too costly.
"Without the savings to overhead, pharmaceutical costs, hospital/clinical fees, and fraud detection, 'Medicare for all who want it' could annually cost $175 billion dollars more than status quo," she told Newsweek. "That's over $600 billion more than Medicare for all."
An analysis published in PLOS Medicine of 22 single-payer studies showed that 19 of them "predicted net savings ... in the first year of program operation and 20 ... predicted savings over several years; anticipated growth rates would result in long-term net savings for all plans."
Critics have argued that reducing costs by switching to a single-payer system would result in doctor shortages and the rationing of health care. But data shows that fewer than 1% of doctors have opted out of the existing Medicare and Medicaid programs, with nearly half of those being psychiatrists. Single-payer proponents also dismiss rationing claims, arguing that Americans are already effectively self-rationing due to sky-high costs, even for those with private insurance.
A Federal Reserve survey published last year found that about 25% of American "adults skipped necessary medical care in 2018 because they were unable to afford the cost." Another survey found that 26% of Americans with diabetes have rationed their insulin, primarily due to the cost.
"It would be a missed opportunity for America to ignore lessons about universal coverage from other countries out of a fear that they ration health care more than we do," researchers at the Commonwealth Fund warned in a report last year. "In reality, more people in the U.S. forgo needed health care because access to care is rationed through lack of access to adequate insurance or unaffordable services and treatments."
Watchdog group calls for SEC probe: Pfizer CEO dumped $5.6M in stock on day of vaccine news
Pfizer CEO Albert Bourla sold off millions in stock as the company's share price peaked following the vaccine news
By IGOR DERYSH - salon
NOVEMBER 13, 2020 10:00AM (UTC)
A watchdog group called for the Securities and Exchange Commission to investigate stock sales by Pfizer chief executive Dr. Albert Bourla on the day the pharmaceutical giant announced that its coronavirus vaccine was more than 90% effective.
In a press release on Monday that made worldwide headlines, Pfizer claimed that study data indicates that the company's experimental coronavirus vaccine is highly effective at preventing infection. Scientists warned that data from Pfizer's clinical trial and specific details on the vaccine were not yet available. But President Trump and others touted the report, which lifted the company's stock price by nearly 8%.
Bourla unloaded 132,506 shares of Pfizer stock at $41.94, near the company's peak, for a total of nearly $5.6 million on the same day, SEC filings show. The transaction appeared to be Bourla's first public sale of stock since 2016, though he has made non-market transactions, according to federal filings.
The stock sale raised questions after Bourla told CNN's Sanjay Gupta that he learned of the positive trial results a day before they were publicly announced.
Amy Rose, the company's vice president of global media relations, told Salon that the sale was prearranged through an SEC-compliant trading plan in August.
"The sale of these shares is part of Dr. Bourla's personal financial planning and a pre-established (10b5-1) plan, which allows, under SEC rules, major shareholders and insiders of exchange-listed corporations to trade a predetermined number of shares at a predetermined time," Rose said in an email. "Through our stock plan administrator, Dr. Bourla authorized the sale of these shares in February and renewed that authorization in August with the same price and volume terms. After being with the company for more than 25 years, Albert owns a substantial amount of Pfizer stock under our qualified and nonqualified savings plans. He now holds approximately nine times his salary in Pfizer stock after the sale this week."
Sally Susman, the company's executive vice president, also sold 43,662 shares for a total value of around $1.83 million under a pre-arranged plan, according to filings.
The company did not respond to questions about the impression conveyed to regulators or the public by these sales, or about whether it would freeze future stock sales by executives.
The prearranged plans are a common way to "shield corporate executives from allegations of illegal insider trading" but they have also become "increasingly controversial" given the "billions of dollars the government has promised Pfizer if its vaccine meets the approval of federal regulators," NPR reported.
While such plans are intended only to be used when executives are not "in possession of inside information" that could affect a company's stock price, the timing of Bourla's plan raised questions because it was implemented on Aug. 19, a day before Pfizer announced that it was "on track to seek regulatory review" by October, NPR added.
Daniel Taylor, an insider trading expert at the Wharton School of the University of Pennsylvania, told NPR that the timing of the stock plan appeared "very suspicious."
"It's wholly inappropriate for executives at pharmaceutical companies to be implementing or modifying 10b5-1 plans the business day before they announce data or results from drug trials," he said.
A spokesperson for the company told NPR that it did not believe the Aug. 20 announcement had any material nonpublic information, adding that the company previously announced its plan to seek approval by October and was merely confirming the timeline.
Accountable Pharma, a progressive watchdog group, has called for Pfizer and other pharmaceutical companies to freeze the sale of stocks by executives "to prevent the kind of insider profiteering off of positive news that we've seen across the industry over the last few months."
Eli Zupnick, a spokesman for the group, on Thursday called on the SEC to investigate the Pfizer sales.
"This appears to be another example of a shameless pump-and-dump and egregious pandemic profiteering that, if nothing else, is a terrible look for a drug industry that is desperately trying to rehabilitate its image," he said in a statement to Salon. "We called on Pfizer to freeze all insider sales for exactly this reason, and now we're calling on the SEC to investigate these trades to determine if these executives' trading plans were inappropriately adjusted or if their options were exercised based on inside information."[...]
In a press release on Monday that made worldwide headlines, Pfizer claimed that study data indicates that the company's experimental coronavirus vaccine is highly effective at preventing infection. Scientists warned that data from Pfizer's clinical trial and specific details on the vaccine were not yet available. But President Trump and others touted the report, which lifted the company's stock price by nearly 8%.
Bourla unloaded 132,506 shares of Pfizer stock at $41.94, near the company's peak, for a total of nearly $5.6 million on the same day, SEC filings show. The transaction appeared to be Bourla's first public sale of stock since 2016, though he has made non-market transactions, according to federal filings.
The stock sale raised questions after Bourla told CNN's Sanjay Gupta that he learned of the positive trial results a day before they were publicly announced.
Amy Rose, the company's vice president of global media relations, told Salon that the sale was prearranged through an SEC-compliant trading plan in August.
"The sale of these shares is part of Dr. Bourla's personal financial planning and a pre-established (10b5-1) plan, which allows, under SEC rules, major shareholders and insiders of exchange-listed corporations to trade a predetermined number of shares at a predetermined time," Rose said in an email. "Through our stock plan administrator, Dr. Bourla authorized the sale of these shares in February and renewed that authorization in August with the same price and volume terms. After being with the company for more than 25 years, Albert owns a substantial amount of Pfizer stock under our qualified and nonqualified savings plans. He now holds approximately nine times his salary in Pfizer stock after the sale this week."
Sally Susman, the company's executive vice president, also sold 43,662 shares for a total value of around $1.83 million under a pre-arranged plan, according to filings.
The company did not respond to questions about the impression conveyed to regulators or the public by these sales, or about whether it would freeze future stock sales by executives.
The prearranged plans are a common way to "shield corporate executives from allegations of illegal insider trading" but they have also become "increasingly controversial" given the "billions of dollars the government has promised Pfizer if its vaccine meets the approval of federal regulators," NPR reported.
While such plans are intended only to be used when executives are not "in possession of inside information" that could affect a company's stock price, the timing of Bourla's plan raised questions because it was implemented on Aug. 19, a day before Pfizer announced that it was "on track to seek regulatory review" by October, NPR added.
Daniel Taylor, an insider trading expert at the Wharton School of the University of Pennsylvania, told NPR that the timing of the stock plan appeared "very suspicious."
"It's wholly inappropriate for executives at pharmaceutical companies to be implementing or modifying 10b5-1 plans the business day before they announce data or results from drug trials," he said.
A spokesperson for the company told NPR that it did not believe the Aug. 20 announcement had any material nonpublic information, adding that the company previously announced its plan to seek approval by October and was merely confirming the timeline.
Accountable Pharma, a progressive watchdog group, has called for Pfizer and other pharmaceutical companies to freeze the sale of stocks by executives "to prevent the kind of insider profiteering off of positive news that we've seen across the industry over the last few months."
Eli Zupnick, a spokesman for the group, on Thursday called on the SEC to investigate the Pfizer sales.
"This appears to be another example of a shameless pump-and-dump and egregious pandemic profiteering that, if nothing else, is a terrible look for a drug industry that is desperately trying to rehabilitate its image," he said in a statement to Salon. "We called on Pfizer to freeze all insider sales for exactly this reason, and now we're calling on the SEC to investigate these trades to determine if these executives' trading plans were inappropriately adjusted or if their options were exercised based on inside information."[...]
'FinCEN' reports say big banks moved dirty money
Reuters - YAHOO NEWS
September 20, 2020
Hong Kong shares of HSBC fell to their worst level since 1995 on Monday (September 21) after reports that it and other financial institutions had allegedly moved large sums of illicit money over two decades.
They revolve around documents leaked to Buzzfeed and shared with a global network of invetigative journalists.
Buzzfeed and other news outlets say it involves moving money for the likes of terrorists, drug kingpins and corrupt leaders.
The leak is reportedly made up of over 2,100 suspicious activity reports filed by banks and other financial firms with the U.S Treasury's Financial Crimes Enforcement Network, or Fincen.
The so-called Fincen Files allegedly show more than $2 trillion dollars worth of transactions from 1999 to 2017, all of it flagged as suspicious by the banks' own compliance departments.
The activity reports aren't necessarily proof of wrongdoing, but the leak paints a picture of a banking system that allows for vast amounts of money laundering.
Among the alleged activity are funds handled by JPMorgan for potentially corrupt individuals and companies in Venezuela, money from an investment scam, or Ponzi scheme, moving through HSBC and money linked to a Ukrainian billionaire processed by Deutsche Bank.
Five global banks appeared the most in the documents; HSBC, JPMorgan, Deutsche Bank, Standard Chartered and Bank of New York Mellon.
In a statement to Reuters, HSBC said the information was "historical" and that as of 2012, "HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime."
Deutschebank also called the reports "historic issues" and that the bank had "devoted significant resources to strengthening" their controls.
Standard Chartered and JP Morgan both said they took the issue of fighting financial crime seriously, while BNY Mellon said it fully complies with laws and regulations.
- Hong Kong shares of HSBC fell to their worst level since 1995 on Monday, after reports that it and other financial institutions had allegedly moved large sums of illicit money over two decades. They revolve around documents leaked to BuzzFeed and shared with a global network of investigative journalists. BuzzFeed and other news outlets say it involves moving money for the likes of terrorists, drug kingpins, and corrupt leaders.
The leak is reportedly made up of over 2,100 suspicious activity reports filed by banks and other financial firms with the U.S. Treasury's Financial Crimes Enforcement Network, or FINCEN. The so-called FINCEN files allegedly show more than two trillion worth of transactions from 1999 to 2017, all of it flagged as suspicious by the bank's own compliance departments. The activity reports aren't necessarily proof of wrongdoing, but the leak paints a picture of a banking system that allows for vast amounts of money laundering.
Among the alleged activity are funds handled by JPMorgan for potentially corrupt individuals and companies in Venezuela, money from an investment scam or Ponzi scheme moving through HSBC, and money linked to a Ukrainian billionaire processed by Deutsche Bank. Five global banks appeared the most in the documents, HSBC, JPMorgan, Deutsche Bank, Standard Chartered, and Bank of New York Mellon. In a statement to Reuters, HSBC said the information was, quote, historical, and that as of 2012, quote, HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime. Deutsche Bank also called the report's, quote, historic issues and that the bank had, quote, devoted significant resources to strengthening their controls. Standard Chartered and JPMorgan both said they took the issue of fighting financial crime seriously, while BNY Mellon said it fully complies with laws and regulations.
They revolve around documents leaked to Buzzfeed and shared with a global network of invetigative journalists.
Buzzfeed and other news outlets say it involves moving money for the likes of terrorists, drug kingpins and corrupt leaders.
The leak is reportedly made up of over 2,100 suspicious activity reports filed by banks and other financial firms with the U.S Treasury's Financial Crimes Enforcement Network, or Fincen.
The so-called Fincen Files allegedly show more than $2 trillion dollars worth of transactions from 1999 to 2017, all of it flagged as suspicious by the banks' own compliance departments.
The activity reports aren't necessarily proof of wrongdoing, but the leak paints a picture of a banking system that allows for vast amounts of money laundering.
Among the alleged activity are funds handled by JPMorgan for potentially corrupt individuals and companies in Venezuela, money from an investment scam, or Ponzi scheme, moving through HSBC and money linked to a Ukrainian billionaire processed by Deutsche Bank.
Five global banks appeared the most in the documents; HSBC, JPMorgan, Deutsche Bank, Standard Chartered and Bank of New York Mellon.
In a statement to Reuters, HSBC said the information was "historical" and that as of 2012, "HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime."
Deutschebank also called the reports "historic issues" and that the bank had "devoted significant resources to strengthening" their controls.
Standard Chartered and JP Morgan both said they took the issue of fighting financial crime seriously, while BNY Mellon said it fully complies with laws and regulations.
- Hong Kong shares of HSBC fell to their worst level since 1995 on Monday, after reports that it and other financial institutions had allegedly moved large sums of illicit money over two decades. They revolve around documents leaked to BuzzFeed and shared with a global network of investigative journalists. BuzzFeed and other news outlets say it involves moving money for the likes of terrorists, drug kingpins, and corrupt leaders.
The leak is reportedly made up of over 2,100 suspicious activity reports filed by banks and other financial firms with the U.S. Treasury's Financial Crimes Enforcement Network, or FINCEN. The so-called FINCEN files allegedly show more than two trillion worth of transactions from 1999 to 2017, all of it flagged as suspicious by the bank's own compliance departments. The activity reports aren't necessarily proof of wrongdoing, but the leak paints a picture of a banking system that allows for vast amounts of money laundering.
Among the alleged activity are funds handled by JPMorgan for potentially corrupt individuals and companies in Venezuela, money from an investment scam or Ponzi scheme moving through HSBC, and money linked to a Ukrainian billionaire processed by Deutsche Bank. Five global banks appeared the most in the documents, HSBC, JPMorgan, Deutsche Bank, Standard Chartered, and Bank of New York Mellon. In a statement to Reuters, HSBC said the information was, quote, historical, and that as of 2012, quote, HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime. Deutsche Bank also called the report's, quote, historic issues and that the bank had, quote, devoted significant resources to strengthening their controls. Standard Chartered and JPMorgan both said they took the issue of fighting financial crime seriously, while BNY Mellon said it fully complies with laws and regulations.
Trump & Co. Keeps Hiring Companies with Histories of Ripping Off Our Government
By Phil Mattera, Dirt Diggers Digest - DC REPORT
9/19/2020
If you needed a plumber or a caterer, you would avoid a service provider who had in the past tried to bill you for work not performed or grossly overcharged for what was completed. The Trump Administration takes a different approach. In selecting contractors to provide the goods and services the federal government needs to deal with the pandemic, it has turned to dozens of corporations with a history of cheating Uncle Sam.
This finding emerges from a comparison of the recipients of coronavirus-related contracts to the data in Violation Tracker. The analysis focuses on a list of about 175 larger corporations and non-profits that account for nearly half of the roughly $12 billion in contracts awarded so far for laboratory services, medical equipment and much more.
Among this group, 69 contractors, or more than one-third of the total, have paid fines and settlements during the past decade for healthcare fraud and other violations relating to the federal False Claims Act or related laws. They have been involved in 189 individual cases with total penalty payments of $4.7 billion.
These are not trivial matters. Twelve of the contractors paid total penalties of more than $100 million and the average per parent company was $27 million.
Overcharging Healthcare Programs
The company with the largest penalty total is pharmaceutical giant Pfizer, which received a $13 million contract from the Department of Health and Human Services and whose separate COVID-19 vaccine effort is being touted by the Trump Administration. Over the past decade, Pfizer has been penalized in 15 contracting cases, paying out a total of $987 million, most of it stemming from a 2016 lawsuit in which its subsidiary Wyeth had been accused of overcharging federal healthcare programs by misrepresenting its financial relationships with hospitals.
Drug wholesaler McKesson, which has been awarded contracts worth a total of $9 million, has paid penalties of $453 million to resolve allegations such as reporting inflated pricing information for a large number of products, causing Medicaid to overpay for those drugs.
Dispensing Unneeded Insulin Pens
The Walgreens pharmacy chain, which received a $72 million contract for COVID-19 testing services, has paid $367 million in contracting penalties, three-quarters of which stemmed from a 2019 case in which the company had been accused of billing federal healthcare programs for hundreds of thousands of insulin pens it knowingly dispensed to beneficiaries who did not need them and that it overcharged Medicaid by failing to disclose lower drug prices it offered the public through a discount program.
Smaller but still significant penalties have been paid by the companies receiving the largest COVID-19-related awards. The Dutch company Philips, recipient of $646 million in ventilator contracts, paid a penalty of $34 million through a subsidiary for giving illegal kickbacks to suppliers that purchased sleep apnea masks that were sold to Medicare beneficiaries. AstraZeneca, the recipient of $436 million in contracts, has paid $170 million in penalties for False Claims Act and related violations.
Business as Usual
The discovery that many COVID-19 federal contractors have a history of misconduct in their government business is consistent with the recent finding by Good Jobs First that thousands of companies receiving CARES Act grants and loans have similar track records, including more than 200 healthcare providers that have paid $5 billion in False Claims Act penalties over the past decade.
Some of those aid recipients are also COVID-19 contract recipients. Large companies such as Walgreens, Quest Diagnostics and Becton Dickinson are receiving money from the federal government through multiple channels despite having paid penalties in the past for contracting abuses.
The awarding of federal contracts to corporations with a history of misconduct dates back long before the pandemic or this administration, but maybe now is the time to begin doing something about this wrong-headed practice.
This finding emerges from a comparison of the recipients of coronavirus-related contracts to the data in Violation Tracker. The analysis focuses on a list of about 175 larger corporations and non-profits that account for nearly half of the roughly $12 billion in contracts awarded so far for laboratory services, medical equipment and much more.
Among this group, 69 contractors, or more than one-third of the total, have paid fines and settlements during the past decade for healthcare fraud and other violations relating to the federal False Claims Act or related laws. They have been involved in 189 individual cases with total penalty payments of $4.7 billion.
These are not trivial matters. Twelve of the contractors paid total penalties of more than $100 million and the average per parent company was $27 million.
Overcharging Healthcare Programs
The company with the largest penalty total is pharmaceutical giant Pfizer, which received a $13 million contract from the Department of Health and Human Services and whose separate COVID-19 vaccine effort is being touted by the Trump Administration. Over the past decade, Pfizer has been penalized in 15 contracting cases, paying out a total of $987 million, most of it stemming from a 2016 lawsuit in which its subsidiary Wyeth had been accused of overcharging federal healthcare programs by misrepresenting its financial relationships with hospitals.
Drug wholesaler McKesson, which has been awarded contracts worth a total of $9 million, has paid penalties of $453 million to resolve allegations such as reporting inflated pricing information for a large number of products, causing Medicaid to overpay for those drugs.
Dispensing Unneeded Insulin Pens
The Walgreens pharmacy chain, which received a $72 million contract for COVID-19 testing services, has paid $367 million in contracting penalties, three-quarters of which stemmed from a 2019 case in which the company had been accused of billing federal healthcare programs for hundreds of thousands of insulin pens it knowingly dispensed to beneficiaries who did not need them and that it overcharged Medicaid by failing to disclose lower drug prices it offered the public through a discount program.
Smaller but still significant penalties have been paid by the companies receiving the largest COVID-19-related awards. The Dutch company Philips, recipient of $646 million in ventilator contracts, paid a penalty of $34 million through a subsidiary for giving illegal kickbacks to suppliers that purchased sleep apnea masks that were sold to Medicare beneficiaries. AstraZeneca, the recipient of $436 million in contracts, has paid $170 million in penalties for False Claims Act and related violations.
Business as Usual
The discovery that many COVID-19 federal contractors have a history of misconduct in their government business is consistent with the recent finding by Good Jobs First that thousands of companies receiving CARES Act grants and loans have similar track records, including more than 200 healthcare providers that have paid $5 billion in False Claims Act penalties over the past decade.
Some of those aid recipients are also COVID-19 contract recipients. Large companies such as Walgreens, Quest Diagnostics and Becton Dickinson are receiving money from the federal government through multiple channels despite having paid penalties in the past for contracting abuses.
The awarding of federal contracts to corporations with a history of misconduct dates back long before the pandemic or this administration, but maybe now is the time to begin doing something about this wrong-headed practice.
COVID Is Turning Out To Be Very Good For Bad Businesses
40,000-plus Corporations Receiving CARES Act Assistance Have Histories of Misconduct
By Phil Mattera, Dirt Diggers Digest - dc report
9/10/2020
In implementing the CARES Act passed by Congress to rescue the economy from the effects of the COVID-19 pandemic, the Trump administration has directed 10s of billions of dollars to companies with track records of misconduct.
This transfer of public wealth to private bad actors likely will turn out to be more expensive than the TARP bailout of the banks a decade ago given that much of the new aid will not be repaid.
My colleagues and I at Good Jobs First have found that more than 43,000 regulatory violators and other business miscreants have so far received $57 billion in grants and $91 billion in loans, including many that are forgivable. Over the past decade, the penalties paid by these companies for their misdeeds amounted to more than $13 billion. Our findings are summarized in a new report titled The Corporate Culprits Receiving COVID Bailouts.
We derived these numbers through a careful comparison of the CARES Act data we have compiled for our COVID Stimulus Watch website and the entries covering the past decade in Violation Tracker.
More than 87% of the CARES Act recipients with a record of misconduct are small businesses, while the other 13% are units and subsidiaries of larger companies. The latter received $55 billion in grants and $53 billion in loans, while the smaller companies received $2 billion in grants and $38 billion in loans. The large companies account for 90% of the penalty dollars.
The largest violation category among all 43,000 companies is government contracting at $5.6 billion, or 42% of the total. Employment-related penalties and consumer protection penalties each add up to about $3 billion (23%), while environmental and safety penalties total $1.6 billion (12%).
Hospital Violators
Hospitals (both for-profit and non-profit) and other providers that received funding from healthcare-related CARES Act programs account for $9 billion of the penalties, or 68% of the total. More than half of these penalties derive from Medicare and Medicaid billing fraud.
Recipients of small-business loans account for $3 billion of the penalties (23%), with the largest portions coming from wage theft and workplace safety and health violations.
There are two other groups of CARES Act recipients with a significant history of misconduct: colleges and universities getting aid through the Higher Education Emergency Relief Fund and airlines receiving massive levels of assistance through the Payroll Support Program. They paid $900 million and $600 million in penalties, respectively.
Seventy CARES Act recipients had been involved in cases that included criminal charges. Of these, 33 of the defendants were large companies, which paid total penalties of $3 billion. The 37 smaller defendants paid $47 million.
The Fed Helps the Biggest Companies
While the bulk of CARES Act spending comes in the form of grants and loans, the Federal Reserve is seeking to prop up the commercial credit market by purchasing corporate bonds, especially those issued by Fortune 500 and Global 500 corporations. The corporations whose bonds have been purchased by the Fed account for more than $100 billion in penalties over the past decade. Because the purchases, which averaged about $3 million per company, are small in comparison to the size of these corporations, we decided not to include the associated penalties in the main analysis of the report.
The revelation that 10s of thousands of CARES Act recipients have records of misconduct—including some cases of a criminal nature—raises serious questions about how the aid was distributed. It appears that little screening was done by federal agencies before awarding grants and loans, partly because there were no strict eligibility requirements written into the CARES Act. In some programs, the money was apportioned by formula rather than choosing some recipients over others.
In the Paycheck Protection Program, there was an application process, but it was handled by banks – which received commissions for their efforts – rather than the Small Business Administration. The application form required business owners to state whether they personally had been convicted or pleaded guilty to felonies such as fraud and bribery, while for the companies themselves the only issue seemed to be whether they had been excluded by a federal agency.
Possible Government Actions
While little can be done about aid awards that were technically legal, there are steps the federal government could take with regard to two categories of recipients. The first consists of those companies and non-profits which were accused of defrauding the federal government and which paid civil penalties (usually through a settlement) for False Claims Act violations. The other category consists of those involved in cases that were serious enough to be brought with criminal charges.
Given that companies involved in FCA cases are usually allowed to continue doing business with the federal government after paying their penalty, it would be difficult to block them from future COVID-19 stimulus programs. These companies should, however, be subject to additional scrutiny to ensure they do not resume their fraudulent behavior while receiving grants and loans.
The most compelling case for excluding a group of companies from participation in future aid programs concerns those with a history of criminal misconduct. The PPP provision dealing with corrupt business owners should be applied to businesses themselves, especially when the firms involved are larger entities. Doing so would protect taxpayer funds and serve as a deterrent against future corporate criminality.
This transfer of public wealth to private bad actors likely will turn out to be more expensive than the TARP bailout of the banks a decade ago given that much of the new aid will not be repaid.
My colleagues and I at Good Jobs First have found that more than 43,000 regulatory violators and other business miscreants have so far received $57 billion in grants and $91 billion in loans, including many that are forgivable. Over the past decade, the penalties paid by these companies for their misdeeds amounted to more than $13 billion. Our findings are summarized in a new report titled The Corporate Culprits Receiving COVID Bailouts.
We derived these numbers through a careful comparison of the CARES Act data we have compiled for our COVID Stimulus Watch website and the entries covering the past decade in Violation Tracker.
More than 87% of the CARES Act recipients with a record of misconduct are small businesses, while the other 13% are units and subsidiaries of larger companies. The latter received $55 billion in grants and $53 billion in loans, while the smaller companies received $2 billion in grants and $38 billion in loans. The large companies account for 90% of the penalty dollars.
The largest violation category among all 43,000 companies is government contracting at $5.6 billion, or 42% of the total. Employment-related penalties and consumer protection penalties each add up to about $3 billion (23%), while environmental and safety penalties total $1.6 billion (12%).
Hospital Violators
Hospitals (both for-profit and non-profit) and other providers that received funding from healthcare-related CARES Act programs account for $9 billion of the penalties, or 68% of the total. More than half of these penalties derive from Medicare and Medicaid billing fraud.
Recipients of small-business loans account for $3 billion of the penalties (23%), with the largest portions coming from wage theft and workplace safety and health violations.
There are two other groups of CARES Act recipients with a significant history of misconduct: colleges and universities getting aid through the Higher Education Emergency Relief Fund and airlines receiving massive levels of assistance through the Payroll Support Program. They paid $900 million and $600 million in penalties, respectively.
Seventy CARES Act recipients had been involved in cases that included criminal charges. Of these, 33 of the defendants were large companies, which paid total penalties of $3 billion. The 37 smaller defendants paid $47 million.
The Fed Helps the Biggest Companies
While the bulk of CARES Act spending comes in the form of grants and loans, the Federal Reserve is seeking to prop up the commercial credit market by purchasing corporate bonds, especially those issued by Fortune 500 and Global 500 corporations. The corporations whose bonds have been purchased by the Fed account for more than $100 billion in penalties over the past decade. Because the purchases, which averaged about $3 million per company, are small in comparison to the size of these corporations, we decided not to include the associated penalties in the main analysis of the report.
The revelation that 10s of thousands of CARES Act recipients have records of misconduct—including some cases of a criminal nature—raises serious questions about how the aid was distributed. It appears that little screening was done by federal agencies before awarding grants and loans, partly because there were no strict eligibility requirements written into the CARES Act. In some programs, the money was apportioned by formula rather than choosing some recipients over others.
In the Paycheck Protection Program, there was an application process, but it was handled by banks – which received commissions for their efforts – rather than the Small Business Administration. The application form required business owners to state whether they personally had been convicted or pleaded guilty to felonies such as fraud and bribery, while for the companies themselves the only issue seemed to be whether they had been excluded by a federal agency.
Possible Government Actions
While little can be done about aid awards that were technically legal, there are steps the federal government could take with regard to two categories of recipients. The first consists of those companies and non-profits which were accused of defrauding the federal government and which paid civil penalties (usually through a settlement) for False Claims Act violations. The other category consists of those involved in cases that were serious enough to be brought with criminal charges.
Given that companies involved in FCA cases are usually allowed to continue doing business with the federal government after paying their penalty, it would be difficult to block them from future COVID-19 stimulus programs. These companies should, however, be subject to additional scrutiny to ensure they do not resume their fraudulent behavior while receiving grants and loans.
The most compelling case for excluding a group of companies from participation in future aid programs concerns those with a history of criminal misconduct. The PPP provision dealing with corrupt business owners should be applied to businesses themselves, especially when the firms involved are larger entities. Doing so would protect taxpayer funds and serve as a deterrent against future corporate criminality.
Bayer to pay $1.6 billion to settle US claims over birth control device
August 20, 2020
By Agence France-Presse - RAW STORY
Pharmaceutical giant Bayer announced Thursday it had agreed to pay $1.6 billion to settle nearly all claims filed in the United States over controversial birth control implant Essure.
“The company will pay approximately $1.6 billion to resolve these claims, including an allowance for outstanding claims, and is in resolution discussions with counsel for the remaining plaintiffs,” the German company said in a statement.
“There is no admission of wrongdoing or liability by Bayer in the settlement agreements,” the statement said, and the settlement does not apply to claims filed in other countries.
Essure, a non-hormonal coil implant used to prevent pregnancy, has in some cases caused chronic pain, perforation of the uterus and fallopian tubes and led to hysterectomies, news reports say. It was discontinued in 2018.
Approved in the United States in 2002, the device’s perceived advantage is that it is a less invasive alternative to tubal litigation, in which a small hole is cut into the abdomen and the surgeon blocks or cuts the fallopian tube.
Bayer’s pharmaceutical division said in the second quarter it took a charge of 1.25 billion euros for litigation, primarily for claims around Essure.
All told, Bayer reported a loss of 9.55 billion euros in that quarter, which was mostly reflective of a US settlement of thousands of claims that its glyphosate weed killer may have caused cancer.
“The company will pay approximately $1.6 billion to resolve these claims, including an allowance for outstanding claims, and is in resolution discussions with counsel for the remaining plaintiffs,” the German company said in a statement.
“There is no admission of wrongdoing or liability by Bayer in the settlement agreements,” the statement said, and the settlement does not apply to claims filed in other countries.
Essure, a non-hormonal coil implant used to prevent pregnancy, has in some cases caused chronic pain, perforation of the uterus and fallopian tubes and led to hysterectomies, news reports say. It was discontinued in 2018.
Approved in the United States in 2002, the device’s perceived advantage is that it is a less invasive alternative to tubal litigation, in which a small hole is cut into the abdomen and the surgeon blocks or cuts the fallopian tube.
Bayer’s pharmaceutical division said in the second quarter it took a charge of 1.25 billion euros for litigation, primarily for claims around Essure.
All told, Bayer reported a loss of 9.55 billion euros in that quarter, which was mostly reflective of a US settlement of thousands of claims that its glyphosate weed killer may have caused cancer.
US healthcare
you are being robbed!!!
US health insurers doubled profits in second quarter amid pandemic
US’s largest health insurer, UnitedHealth Group, reported $6.7bn in profits compared with $3.4bn for the same quarter last year
Amanda Holpuch in New York
the guardian
Fri 14 Aug 2020 06.15 EDT
The enormous medical response in America to the coronavirus pandemic has not put a drain on US health insurers, which doubled profits in the second quarter of 2020 compared with the same time last year.
The US fight against the virus has been marked by overwhelmed hospitals, testing delays and personal protective equipment (PPE) shortages, but the high profits reported by some insurers have underlined concerns about America’s for-profit healthcare model.
The country’s largest health insurer, UnitedHealth Group, reported its profits were $6.7bn in the second quarter of 2020 compared with $3.4bn in last year’s. Anthem’s profits rose to $2.3bn from $1.1bn for the same three-month period in 2019. Humana reported last week its earnings rose to $1.8bn, compared with $940m in 2019.
Dr Steffie Woolhandler, a longtime advocate of single-payer healthcare and a professor at Cuny Hunter College, said in normal circumstances she considered the billions insurance companies collect a “scandal”.
“It is particularly glaring and inappropriate in a pandemic,” said Woolhandler, a co-founder of Physicians for a National Health Program.
Last week, the House energy and commerce committee said it was launching an investigation into health and dental insurance companies’ business practices in response to the profits they have reaped during the crisis.
There is, however, a simple explanation for the increases.
After a short period of uncertainty, it became clear that the cost of providing medical care would be lower in 2020. People were avoiding the doctor’s office and delaying elective surgeries such as knee replacement. Those with mild symptoms of Covid-19 were initially advised to stay home unless they needed urgent care.
But the money insurance companies collect each month from individuals, known as premiums, kept pouring in. “Private insurance companies make money by taking in premiums and not paying for care,” Woolhandler said.
The drop in spending was a benefit for insurers, but has left already struggling independent doctor’s offices and rural hospitals vulnerable to closures and layoffs.
In late July, 20% of clinicians had salaries skipped or deferred over the previous four weeks and 24% reported recent layoffs or furloughs, according to a survey of 523 physicians by the Primary Care Collaborative (PCC) and the Larry A Green Center.
“That is not a good system,” Andy Slavitt, a health official in Barack Obama’s administration, tweeted last week. “It’s a system designed for & by insurance companies & pharma companies. Not us. Not doctors and nurses.”
A decade ago, insurers would have been able to keep all of the profits. But under the Affordable Care Act, popularly known as Obamacare, profits are capped.
For each dollar the insurer collects from small businesses and individuals on premiums, it must spend at least 80 cents on healthcare. For premiums from larger employers, the minimum is 85 cents. The remainder can be kept as profit and spent on administration.
Insurers who cross the limit must spend the excess on rebates to consumers within three years. Some insurers have already started sending the checks.
The cap does not apply to profits made from insurers’ subsidiary businesses, such as companies which manage pharmacy benefits. This means profits could be even higher than what was reported in earnings calls.
The trade group, America’s Health Insurance Plans (AHIP), defended insurers in response to a New York Times story about the profits. AHIP said in a 1,000-word blogpost that the coronavirus response is “a marathon not a sprint”, and suggested costs could be higher for these companies down the line.
Linda Blumberg, a fellow at the Urban Institute’s Health Policy Center, said there is uncertainty for insurers, who don’t know yet if there will be a surge in care when people are less worried about coronavirus.
Blumberg was part of a research team that surveyed representatives from 25 insurers from April through June for a report by the Urban Institute and Robert Wood Johnson Foundation.
Insurers reported concerns about how much a vaccine could cost, how often people would need it and how firms will pay for regular testing. Some representatives also said they had lowered premiums for customers in financial trouble.
“The insurers are trying to find ways to help people through this which they are able to do as a consequence of their stronger financial situation at the moment,” Blumberg said.
But the eye-watering profits firms reported for the second quarter will certainly add more fuel to calls for a single-payer healthcare program such as Medicare for All. Blumberg said this conversation is part of the historical evolution of the US health insurance system.
“We have public insurance for the elderly, for certain segments of the low-income population,” Blumberg said. “There is a very serious conversation going on, which I expect will continue, to introduce a public option.”
The US fight against the virus has been marked by overwhelmed hospitals, testing delays and personal protective equipment (PPE) shortages, but the high profits reported by some insurers have underlined concerns about America’s for-profit healthcare model.
The country’s largest health insurer, UnitedHealth Group, reported its profits were $6.7bn in the second quarter of 2020 compared with $3.4bn in last year’s. Anthem’s profits rose to $2.3bn from $1.1bn for the same three-month period in 2019. Humana reported last week its earnings rose to $1.8bn, compared with $940m in 2019.
Dr Steffie Woolhandler, a longtime advocate of single-payer healthcare and a professor at Cuny Hunter College, said in normal circumstances she considered the billions insurance companies collect a “scandal”.
“It is particularly glaring and inappropriate in a pandemic,” said Woolhandler, a co-founder of Physicians for a National Health Program.
Last week, the House energy and commerce committee said it was launching an investigation into health and dental insurance companies’ business practices in response to the profits they have reaped during the crisis.
There is, however, a simple explanation for the increases.
After a short period of uncertainty, it became clear that the cost of providing medical care would be lower in 2020. People were avoiding the doctor’s office and delaying elective surgeries such as knee replacement. Those with mild symptoms of Covid-19 were initially advised to stay home unless they needed urgent care.
But the money insurance companies collect each month from individuals, known as premiums, kept pouring in. “Private insurance companies make money by taking in premiums and not paying for care,” Woolhandler said.
The drop in spending was a benefit for insurers, but has left already struggling independent doctor’s offices and rural hospitals vulnerable to closures and layoffs.
In late July, 20% of clinicians had salaries skipped or deferred over the previous four weeks and 24% reported recent layoffs or furloughs, according to a survey of 523 physicians by the Primary Care Collaborative (PCC) and the Larry A Green Center.
“That is not a good system,” Andy Slavitt, a health official in Barack Obama’s administration, tweeted last week. “It’s a system designed for & by insurance companies & pharma companies. Not us. Not doctors and nurses.”
A decade ago, insurers would have been able to keep all of the profits. But under the Affordable Care Act, popularly known as Obamacare, profits are capped.
For each dollar the insurer collects from small businesses and individuals on premiums, it must spend at least 80 cents on healthcare. For premiums from larger employers, the minimum is 85 cents. The remainder can be kept as profit and spent on administration.
Insurers who cross the limit must spend the excess on rebates to consumers within three years. Some insurers have already started sending the checks.
The cap does not apply to profits made from insurers’ subsidiary businesses, such as companies which manage pharmacy benefits. This means profits could be even higher than what was reported in earnings calls.
The trade group, America’s Health Insurance Plans (AHIP), defended insurers in response to a New York Times story about the profits. AHIP said in a 1,000-word blogpost that the coronavirus response is “a marathon not a sprint”, and suggested costs could be higher for these companies down the line.
Linda Blumberg, a fellow at the Urban Institute’s Health Policy Center, said there is uncertainty for insurers, who don’t know yet if there will be a surge in care when people are less worried about coronavirus.
Blumberg was part of a research team that surveyed representatives from 25 insurers from April through June for a report by the Urban Institute and Robert Wood Johnson Foundation.
Insurers reported concerns about how much a vaccine could cost, how often people would need it and how firms will pay for regular testing. Some representatives also said they had lowered premiums for customers in financial trouble.
“The insurers are trying to find ways to help people through this which they are able to do as a consequence of their stronger financial situation at the moment,” Blumberg said.
But the eye-watering profits firms reported for the second quarter will certainly add more fuel to calls for a single-payer healthcare program such as Medicare for All. Blumberg said this conversation is part of the historical evolution of the US health insurance system.
“We have public insurance for the elderly, for certain segments of the low-income population,” Blumberg said. “There is a very serious conversation going on, which I expect will continue, to introduce a public option.”
greed rules!!!
‘Taking taxpayers for a ride’: Moderna to charge $32-$37/dose for COVID-19 vaccine developed entirely with public funds
August 5, 2020
By Jake Johnson, Common Dreams - raw story
“It ought to be the people’s vaccine, not a new taxpayer burden.”
Consumer advocates warned Wednesday that pharmaceutical giant Moderna is “taking taxpayers for a ride” after the company announced plans to charge between $32 and $37 per dose for a potential Covid-19 vaccine developed entirely with funds from the U.S. federal government.
“Taxpayers are paying for 100% of Moderna’s Covid-19 vaccine development. All of it,” Peter Maybarduk, director of the Access to Medicines Program at Public Citizen, said in a statement. “Yet taxpayers may wind up paying tens of billions more to Moderna to buy our vaccine back, if it proves safe and effective.”
“The so-called Moderna vaccine belongs in significant part to the people of the U.S,” said Maybarduk. “We paid for it. Federal scientists led the way. It ought to be the people’s vaccine, not a new taxpayer burden.”
The experimental vaccine is currently undergoing a Phase 3 clinical trial that is expected to enroll around 30,000 adult volunteers who do not have Covid-19, according to the National Institutes of Health (NIH). Trial results are expected as early as October.
“Results from early-stage clinical testing indicate the investigational mRNA-1273 vaccine is safe and immunogenic, supporting the initiation of a Phase 3 clinical trial,” Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said in a statement last week.
Meg Tirrell
@megtirrell
For context, the $32-$37/dose Moderna cites for smaller volume agreements of #COVID19 vaccine is 60% more (on low end) than Pfizer price of $19.95/dose agreement with U.S. govt.
Moderna notes price would be lower for larger volume agreements.
Price would go up after pandemic.
Under pressure from advocacy groups to publicly disclose how its potential vaccine is being financed, Moderna told Axios Wednesday that U.S. taxpayers are providing “100% funding of the program.”
Since April, the Massachusetts-based pharmaceutical company has received nearly a billion dollars in taxpayer grants to develop a vaccine as part of the Trump administration’s so-called Operation Warp Speed.
“The company received $483 million from the Biomedical Advanced Research and Development Authority in April to support its vaccine development,” CNBC reported. “Last month, it announced it received an additional $472 million from the U.S. government.”
Dean Baker, senior economist at the Center for Economic and Policy Research, wrote in a blog post Wednesday that “this funding paid for the research and testing” and “it also meant that the government took all the risk.”
“If Moderna’s vaccine turns out to be ineffective,” wrote Baker, “the government will be out the money, not Moderna.”
Despite the fact that Moderna’s price tag for its coronavirus vaccine is the highest yet announced by any corporation involved with Operation Warp Speed, Moderna CEO Stéphane Bancel on Wednesday characterized the cost as a discount during a conference call announcing the company’s massive second-quarter revenue increase.
But Public Citizen noted the absurdity of charging the public anything at all for a vaccine developed entirely with taxpayer funding.
“They want us to buy back a vaccine developed with our tax dollars,” the group tweeted.
Consumer advocates warned Wednesday that pharmaceutical giant Moderna is “taking taxpayers for a ride” after the company announced plans to charge between $32 and $37 per dose for a potential Covid-19 vaccine developed entirely with funds from the U.S. federal government.
“Taxpayers are paying for 100% of Moderna’s Covid-19 vaccine development. All of it,” Peter Maybarduk, director of the Access to Medicines Program at Public Citizen, said in a statement. “Yet taxpayers may wind up paying tens of billions more to Moderna to buy our vaccine back, if it proves safe and effective.”
“The so-called Moderna vaccine belongs in significant part to the people of the U.S,” said Maybarduk. “We paid for it. Federal scientists led the way. It ought to be the people’s vaccine, not a new taxpayer burden.”
The experimental vaccine is currently undergoing a Phase 3 clinical trial that is expected to enroll around 30,000 adult volunteers who do not have Covid-19, according to the National Institutes of Health (NIH). Trial results are expected as early as October.
“Results from early-stage clinical testing indicate the investigational mRNA-1273 vaccine is safe and immunogenic, supporting the initiation of a Phase 3 clinical trial,” Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said in a statement last week.
Meg Tirrell
@megtirrell
For context, the $32-$37/dose Moderna cites for smaller volume agreements of #COVID19 vaccine is 60% more (on low end) than Pfizer price of $19.95/dose agreement with U.S. govt.
Moderna notes price would be lower for larger volume agreements.
Price would go up after pandemic.
Under pressure from advocacy groups to publicly disclose how its potential vaccine is being financed, Moderna told Axios Wednesday that U.S. taxpayers are providing “100% funding of the program.”
Since April, the Massachusetts-based pharmaceutical company has received nearly a billion dollars in taxpayer grants to develop a vaccine as part of the Trump administration’s so-called Operation Warp Speed.
“The company received $483 million from the Biomedical Advanced Research and Development Authority in April to support its vaccine development,” CNBC reported. “Last month, it announced it received an additional $472 million from the U.S. government.”
Dean Baker, senior economist at the Center for Economic and Policy Research, wrote in a blog post Wednesday that “this funding paid for the research and testing” and “it also meant that the government took all the risk.”
“If Moderna’s vaccine turns out to be ineffective,” wrote Baker, “the government will be out the money, not Moderna.”
Despite the fact that Moderna’s price tag for its coronavirus vaccine is the highest yet announced by any corporation involved with Operation Warp Speed, Moderna CEO Stéphane Bancel on Wednesday characterized the cost as a discount during a conference call announcing the company’s massive second-quarter revenue increase.
But Public Citizen noted the absurdity of charging the public anything at all for a vaccine developed entirely with taxpayer funding.
“They want us to buy back a vaccine developed with our tax dollars,” the group tweeted.
robbery without a gun!!!
House Democrats find administration overspent for ventilators by as much as $500 million
Democrats say the episode raises questions about one of the Trump administration's largest contracts for ventilator production.
By Heidi Przybyla - nbc news
7/31/2020
WASHINGTON — Throughout the coronavirus pandemic, President Donald Trump has repeatedly touted his administration's supply of ventilators, a critical tool for treating patients with life-threatening respiratory symptoms.
But internal emails and documents obtained by Democrats on the House Oversight Committee suggest that the Trump administration failed to enforce an existing contract with a major medical manufacturer, delayed negotiations for more than a month and subsequently overpaid as much as $500 million for tens of thousands of the devices — a costly error at a time when officials from some of the biggest states were warning of shortages.
The communications between administration officials and Philips Respironics, a global medical equipment manufacturer that finalized a $643.5 million contract with the Trump administration in April, are included in a 40-page report shared with NBC News.
The information raises serious concerns about an estimated $3 billion in taxpayer dollars spent on ventilators from a number of suppliers, according to committee staff members who briefed NBC News.
Trump, facing criticism for a slow and inconsistent response to the pandemic, has repeatedly pointed to his administration's distribution of ventilators as a success story. He falsely claimed as early as April that the Obama administration had left no ventilators in the Strategic National Stockpile upon leaving office. In a speech April 29, Trump said that under his leadership, the U.S. had become "king of ventilators, thousands and thousands of ventilators."
Philips Respironics has one of the largest contracts with the federal government to produce ventilators, but documents in the report found that the administration paid it more per unit than any other U.S. purchaser.
According to the initial Obama-era contract to build the Strategic National Stockpile, Philips is under no obligation to deliver the bulk of the 10,000 ventilators it originally was contracted for until September 2022, the report notes, citing a statement given to ProPublica.
Even so, the Department of Health and Human Services has said it expects most of the 43,000 devices negotiated under a second contract to arrive by the end of this year.
The White House did not respond to inquiries from NBC News, nor did Philips.
"Democrats will stop at nothing in their endless quest to politicize this pandemic," said Matt Smith, a spokesman for Oversight Committee Republicans.
"After months of Democratic governors rushing to television cameras to beg for more ventilators, Congressional Democrats are now unhappy with the Administration’s successful efforts to quickly secure a robust supply from American manufacturers," Smith said. "Rather than provide credit for the more-than quadrupling of available ventilators in the national stockpile since March, they now seek to diminish President Trump’s success by throwing a tantrum over contracting terms. This is just the latest example of a Democratic Party more concerned with partisan politics than fighting COVID-19."
"These documents indicate that, before and during the pandemic, inept contract management and incompetent negotiating by the Trump Administration denied the country the ventilators it needed," the committee concluded in its report.
The money spent on overpayments, the report suggests, "could have been used for personal protective equipment and critical medical supplies that were in short supply across the country."
"The results of this investigation lead me to question how many other ways have the American people been unknowingly hurt by this administration's incompetence and ineptitude over the course of the pandemic and over the past three-and-a-half years," Rep. Raja Krishnamoorthi, D-Ill., said in an interview with NBC News.
The report says Philips secured a "financial windfall to which it clearly is not entitled" and recommends that to "remedy this apparent profiteering, the Trump Administration now should engage competent contracting officers at federal agencies to determine whether any of these funds can be clawed back."
In late January, with the pandemic moving through China and into Europe, Philips approached Trump administration officials to ask whether it should accelerate ventilator production under an existing contract, the report says.
But it wasn't until April 7, after demand for the devices had peaked and already started to ebb, that the Department of Health and Human Services signed a new contract with Philips to purchase 43,000 ventilators at $15,000 apiece. The administration never tried to negotiate that price, based on the documentation. By comparison, a purchaser in Missouri paid $9,327 for a single unit on April 30.
According to ProPublica, the contract the Obama administration negotiated with Philips in 2014 was for 10,000 similar ventilators at $3,280 apiece. After development was delayed, Obama officials gave Philips an extension until November 2019, which would have been in time to address the pandemic. The Trump administration never tried to build on that contract and continued to grant the company several extensions in negotiating a new one, the report found.
White House trade adviser Peter Navarro, who recently criticized the nation's top infectious disease expert, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, as having "been wrong about everything," negotiated the new contract at almost five times the price the Obama administration paid. The devices Navarro purchased were "functionally identical" to the previous ones, according to Food and Drug Administration approvals in the report.
While Navarro served as chief negotiator, the deal was formalized by Adam Boehler, CEO of the U.S. International Development Finance Corporation, who is a former college roommate of Jared Kushner, Trump's senior adviser and son-in-law. Christopher Abbott, an aide to Navarro who graduated from college just last year, oversaw a majority of the communications between Philips and the White House.
A March 25 email from Philips Vice President Nick Padula to Abbott recommended that the administration purchase a model with "more clinician-friendly screens" than those purchased by the Obama administration.
Had Trump officials asked how the screen was different, the report said, they would have discovered that the screens "are identical to the screens on the less expensive" models, the report says.
In addition to what committee staff described as a "fleecing" of the federal government, the report documents a belabored federal response as the leaders of the hardest-hit states, including Govs. Andrew Cuomo of New York and Gretchen Whitmer of Michigan, were imploring the federal government to play a greater role in purchasing and distributing ventilators.
On March 24, with New York state then the center of the pandemic in the U.S., Cuomo openly pleaded with the federal government for thousands more ventilators than it had provided, saying it was "urgent." Trump rejected invoking the Defense Production Act to compel U.S. companies to produce enough equipment to meet demand, while Trump criticized Cuomo's response to the pandemic.
But internal emails and documents obtained by Democrats on the House Oversight Committee suggest that the Trump administration failed to enforce an existing contract with a major medical manufacturer, delayed negotiations for more than a month and subsequently overpaid as much as $500 million for tens of thousands of the devices — a costly error at a time when officials from some of the biggest states were warning of shortages.
The communications between administration officials and Philips Respironics, a global medical equipment manufacturer that finalized a $643.5 million contract with the Trump administration in April, are included in a 40-page report shared with NBC News.
The information raises serious concerns about an estimated $3 billion in taxpayer dollars spent on ventilators from a number of suppliers, according to committee staff members who briefed NBC News.
Trump, facing criticism for a slow and inconsistent response to the pandemic, has repeatedly pointed to his administration's distribution of ventilators as a success story. He falsely claimed as early as April that the Obama administration had left no ventilators in the Strategic National Stockpile upon leaving office. In a speech April 29, Trump said that under his leadership, the U.S. had become "king of ventilators, thousands and thousands of ventilators."
Philips Respironics has one of the largest contracts with the federal government to produce ventilators, but documents in the report found that the administration paid it more per unit than any other U.S. purchaser.
According to the initial Obama-era contract to build the Strategic National Stockpile, Philips is under no obligation to deliver the bulk of the 10,000 ventilators it originally was contracted for until September 2022, the report notes, citing a statement given to ProPublica.
Even so, the Department of Health and Human Services has said it expects most of the 43,000 devices negotiated under a second contract to arrive by the end of this year.
The White House did not respond to inquiries from NBC News, nor did Philips.
"Democrats will stop at nothing in their endless quest to politicize this pandemic," said Matt Smith, a spokesman for Oversight Committee Republicans.
"After months of Democratic governors rushing to television cameras to beg for more ventilators, Congressional Democrats are now unhappy with the Administration’s successful efforts to quickly secure a robust supply from American manufacturers," Smith said. "Rather than provide credit for the more-than quadrupling of available ventilators in the national stockpile since March, they now seek to diminish President Trump’s success by throwing a tantrum over contracting terms. This is just the latest example of a Democratic Party more concerned with partisan politics than fighting COVID-19."
"These documents indicate that, before and during the pandemic, inept contract management and incompetent negotiating by the Trump Administration denied the country the ventilators it needed," the committee concluded in its report.
The money spent on overpayments, the report suggests, "could have been used for personal protective equipment and critical medical supplies that were in short supply across the country."
"The results of this investigation lead me to question how many other ways have the American people been unknowingly hurt by this administration's incompetence and ineptitude over the course of the pandemic and over the past three-and-a-half years," Rep. Raja Krishnamoorthi, D-Ill., said in an interview with NBC News.
The report says Philips secured a "financial windfall to which it clearly is not entitled" and recommends that to "remedy this apparent profiteering, the Trump Administration now should engage competent contracting officers at federal agencies to determine whether any of these funds can be clawed back."
In late January, with the pandemic moving through China and into Europe, Philips approached Trump administration officials to ask whether it should accelerate ventilator production under an existing contract, the report says.
But it wasn't until April 7, after demand for the devices had peaked and already started to ebb, that the Department of Health and Human Services signed a new contract with Philips to purchase 43,000 ventilators at $15,000 apiece. The administration never tried to negotiate that price, based on the documentation. By comparison, a purchaser in Missouri paid $9,327 for a single unit on April 30.
According to ProPublica, the contract the Obama administration negotiated with Philips in 2014 was for 10,000 similar ventilators at $3,280 apiece. After development was delayed, Obama officials gave Philips an extension until November 2019, which would have been in time to address the pandemic. The Trump administration never tried to build on that contract and continued to grant the company several extensions in negotiating a new one, the report found.
White House trade adviser Peter Navarro, who recently criticized the nation's top infectious disease expert, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, as having "been wrong about everything," negotiated the new contract at almost five times the price the Obama administration paid. The devices Navarro purchased were "functionally identical" to the previous ones, according to Food and Drug Administration approvals in the report.
While Navarro served as chief negotiator, the deal was formalized by Adam Boehler, CEO of the U.S. International Development Finance Corporation, who is a former college roommate of Jared Kushner, Trump's senior adviser and son-in-law. Christopher Abbott, an aide to Navarro who graduated from college just last year, oversaw a majority of the communications between Philips and the White House.
A March 25 email from Philips Vice President Nick Padula to Abbott recommended that the administration purchase a model with "more clinician-friendly screens" than those purchased by the Obama administration.
Had Trump officials asked how the screen was different, the report said, they would have discovered that the screens "are identical to the screens on the less expensive" models, the report says.
In addition to what committee staff described as a "fleecing" of the federal government, the report documents a belabored federal response as the leaders of the hardest-hit states, including Govs. Andrew Cuomo of New York and Gretchen Whitmer of Michigan, were imploring the federal government to play a greater role in purchasing and distributing ventilators.
On March 24, with New York state then the center of the pandemic in the U.S., Cuomo openly pleaded with the federal government for thousands more ventilators than it had provided, saying it was "urgent." Trump rejected invoking the Defense Production Act to compel U.S. companies to produce enough equipment to meet demand, while Trump criticized Cuomo's response to the pandemic.
They Sued Thousands of Borrowers During the Pandemic — Until We Started Asking Questions
Months into the pandemic, a lender that markets to Latino immigrants continued to sue borrowers after they lost jobs and missed payments. But they reversed course when we started asking questions.
by Kiah Collier and Ren Larson - propublica
July 28, 5:15 p.m. CDT
A Silicon Valley-based installment lender that caters to Latino immigrants announced on Tuesday that it would drop all the lawsuits it has filed against borrowers who fell behind on payments, including during the coronavirus pandemic.
Oportun Inc. also said it would cap interest rates on new loans at 36% — a percentage that consumer advocates consider the gold standard for smaller personal loans.
The announcement came after ProPublica and The Texas Tribune began asking questions about the company’s lending and debt collection practices in Texas, one of 12 states in which it operates. That reporting has included interviews with individuals whom Oportun sued in small claims courts across the state, as well as numerous consumer advocates.
The company didn’t say on Tuesday exactly how many pending lawsuits it would drop in Texas and other states, but confirmed that “several thousand cases” would be impacted. Court records show that it has filed thousands of debt claims in Texas this year alone and tens of thousands since 2016.
“Recently, a few consumer advocates and journalists have asked us about the APRs (annual percentage rates) we charge some of our customers as well as the scale of our legal collections,” Oportun CEO Raul Vazquez wrote in a blog post on Tuesday.
“We have always designed our products and practices to benefit our customers, so we asked ourselves how we can better serve our customers, especially in the current environment, while keeping our commitments to other stakeholders,” Vazquez wrote. “After extensive discussions and with enthusiastic support from our leadership team and Board, we have decided that we can do better and I’m writing today to share how we intend to do that on a permanent basis.”
In addition to dropping all pending lawsuits, Vazquez said the company would limit debt collection activity now and in the future with a temporary moratorium on new debt lawsuits — it did not indicate for how long — and the reduction of its current filing rate by more than 60%.
While the company has filed suits related to fewer than 6% of its loans in recent years, Vazquez acknowledged it had still become the largest filer of debt claims in both California and Texas.
“This is a position that does not reflect our objectives as a mission-driven company,” he wrote.
In a statement to ProPublica and The Tribune, the company said: “We did not and will not file cases or pursue judgements for customers who informed us that they were impacted by COVID-19.”
The other major change Vazquez announced Tuesday is an “all-in” interest rate cap of 36%, a policy he said would be completely implemented by mid-August.
Some consumer advocates believe that size APR is still too high, but it is considered a gold standard ceiling for the kind of smaller installment loans that Oportun offers, which range from $300 to $10,000.
“While the average APR for our business today is about 34%, the APRs can exceed 36% for some customers, often because the size of the loan is small and the term is fairly short (less than 12 months),” Vazquez said.
Consumer advocates and attorneys praised the move, with some caveats, and said they hoped it would inspire other installment lenders, subprime and otherwise, to follow suit and possibly generate momentum for a nationwide interest rate cap.
“Oportun did the right thing by reducing their rates to 36% without any trick or trap fees, and by dismissing all of their debt collection lawsuits and pledging to work with distressed borrowers. Other lenders should follow their lead,” said Lauren Saunders, associate director of the National Consumer Law Center, who noted that 36% is already the maximum allowable interest rate for active military service members.
Ann Baddour of Texas Appleseed, a nonprofit that advocates for low-income Texans, said the rate cap “is particularly positive for residents of Texas, where some consumer loans can average 500% interest or higher.” The planned changes to debt collection practices are welcome too, but Baddour noted that Oportun would still have been a top filer of debt claims in Harris County, home to Houston, this year even if it had filed 60% fewer cases.
Attorney and professor Mary Spector, who directs the civil and consumer law clinic at Southern Methodist University’s Dedman School of Law, said: “Maybe this is a bright spot during the pandemic and, if we’re lucky, other lenders will follow suit.”
Oportun Inc. also said it would cap interest rates on new loans at 36% — a percentage that consumer advocates consider the gold standard for smaller personal loans.
The announcement came after ProPublica and The Texas Tribune began asking questions about the company’s lending and debt collection practices in Texas, one of 12 states in which it operates. That reporting has included interviews with individuals whom Oportun sued in small claims courts across the state, as well as numerous consumer advocates.
The company didn’t say on Tuesday exactly how many pending lawsuits it would drop in Texas and other states, but confirmed that “several thousand cases” would be impacted. Court records show that it has filed thousands of debt claims in Texas this year alone and tens of thousands since 2016.
“Recently, a few consumer advocates and journalists have asked us about the APRs (annual percentage rates) we charge some of our customers as well as the scale of our legal collections,” Oportun CEO Raul Vazquez wrote in a blog post on Tuesday.
“We have always designed our products and practices to benefit our customers, so we asked ourselves how we can better serve our customers, especially in the current environment, while keeping our commitments to other stakeholders,” Vazquez wrote. “After extensive discussions and with enthusiastic support from our leadership team and Board, we have decided that we can do better and I’m writing today to share how we intend to do that on a permanent basis.”
In addition to dropping all pending lawsuits, Vazquez said the company would limit debt collection activity now and in the future with a temporary moratorium on new debt lawsuits — it did not indicate for how long — and the reduction of its current filing rate by more than 60%.
While the company has filed suits related to fewer than 6% of its loans in recent years, Vazquez acknowledged it had still become the largest filer of debt claims in both California and Texas.
“This is a position that does not reflect our objectives as a mission-driven company,” he wrote.
In a statement to ProPublica and The Tribune, the company said: “We did not and will not file cases or pursue judgements for customers who informed us that they were impacted by COVID-19.”
The other major change Vazquez announced Tuesday is an “all-in” interest rate cap of 36%, a policy he said would be completely implemented by mid-August.
Some consumer advocates believe that size APR is still too high, but it is considered a gold standard ceiling for the kind of smaller installment loans that Oportun offers, which range from $300 to $10,000.
“While the average APR for our business today is about 34%, the APRs can exceed 36% for some customers, often because the size of the loan is small and the term is fairly short (less than 12 months),” Vazquez said.
Consumer advocates and attorneys praised the move, with some caveats, and said they hoped it would inspire other installment lenders, subprime and otherwise, to follow suit and possibly generate momentum for a nationwide interest rate cap.
“Oportun did the right thing by reducing their rates to 36% without any trick or trap fees, and by dismissing all of their debt collection lawsuits and pledging to work with distressed borrowers. Other lenders should follow their lead,” said Lauren Saunders, associate director of the National Consumer Law Center, who noted that 36% is already the maximum allowable interest rate for active military service members.
Ann Baddour of Texas Appleseed, a nonprofit that advocates for low-income Texans, said the rate cap “is particularly positive for residents of Texas, where some consumer loans can average 500% interest or higher.” The planned changes to debt collection practices are welcome too, but Baddour noted that Oportun would still have been a top filer of debt claims in Harris County, home to Houston, this year even if it had filed 60% fewer cases.
Attorney and professor Mary Spector, who directs the civil and consumer law clinic at Southern Methodist University’s Dedman School of Law, said: “Maybe this is a bright spot during the pandemic and, if we’re lucky, other lenders will follow suit.”
The Food Industry Puts Profits Over Public Health Using Big Tobacco’s Playbook
BY Gigi Kellett, Truthout
PUBLISHED July 25, 2020
Public health advocates were winning. City after city was innovating ways to reduce smoking and protect public health between the 1960s and 1970s. As former industry lobbyist Victor Crawford observed, you’d “put out a fire one place, another one would pop up somewhere else.”
But in the mid-1980s, this momentum stopped. Big Tobacco had discovered a way to reverse local gains. And according to a 2020 study in the American Journal of Public Health, the industry’s counteroffensive has led to more disturbing and enduring ramifications for public health — and our democracy — than previously understood.
The strategy is called state or “ceiling” preemption: Promoting weaker state public health laws to override stronger local laws. Between 1986 and 1991, the tobacco industry rammed through seven state preemption laws. In the following five years, the industry gained steam, foisting 17 additional preemption policies on states. Laws restricting youth access to tobacco products would be reversed or never see the light of day. Laws establishing smoke-free environments were overridden. Tobacco tax increases were stalled. Restrictions on tobacco retail licensing were loosened.
Perhaps the study’s most concerning finding is that it takes an average of 11 years to repeal these laws — if they’re repealed at all. As of 2019, no preemption laws on youth access or tobacco marketing, and fewer than half of state preemption laws on smoke-free places, have been repealed. The tobacco industry has a long-documented history of targeting people in low-income communities and communities of color with the very tactics — like children-targeted marketing — preemption laws sought to protect. Consider the costs to public health and progress — especially in Black communities and other communities of color — when scarce resources are bound-up in undoing bad policies versus securing new public health protections. The smoking-attributable mortality rate is 18 percent higher among Black Americans than for white, with disproportionate childhood exposure to second-hand smoke and target marketing of products such as menthol among the heightened risk factors for the Black community.
The four tactics pursued by the tobacco industry are now being modeled across industries, such as the food and beverage sector, disproportionately affecting communities of color and exacerbating diet-related disease crises.
Preemption Harms Consumers — and Workers
Coca-Cola, McDonald’s, and the larger food and beverage industry have already seen to the enactment of at least a dozen laws preempting local public health policies like soda taxes, product labeling and restrictions on junk food marketing to kids. This has allowed the industry to continue its racist marketing campaigns, target marketing to Black youth and other youth of color. Understanding these tactics is key to undoing and preventing further proliferation of the industry’s preemption push.
Lobbying
First, to give Big Tobacco’s political agenda credibility, tobacco giants like R.J. Reynolds Tobacco Company have invested heavily in trade associations and front groups to do their bidding, from so-called “smokers’ rights groups” to restaurant, hotel and gaming associations. Unsurprisingly, a similar cast — like state affiliates of the U.S. Chamber of Commerce and National Restaurant Association (NRA) — are again the muscle behind state preemption pushes to block new soda taxes, as well as critical policies to assure food worker health and well-being, such as new paid sick leave requirements and minimum wage increases. In recent months alone, the Texas Supreme Court has quashed (for now) city efforts to guarantee municipal paid sick leave. The Minnesota Supreme Court ruled against the Minnesota Chamber of Commerce’s contention that Minneapolis’s paid sick leave requirements were preempted by state law. And the Power Coalition for Equity and Justice is mobilizing to undo what a spokesperson for the group calls “yet another tool of white supremacy” and an example of the “plantation mentality’s” manifestation in state politics: state preemption of local minimum wage increases.
Campaign Contributions
Second, Big Tobacco lavished money on federal elections. At the outset of the 1990s, the tobacco lobbies contributed more than $70 million. Predominantly, Republican candidates have received more than $50 million from the tobacco industry since 1990. In this same time period, the NRA and its biggest corporate members — like McDonald’s, Darden and Yum! Brands — combined to spend more than $60 million in disclosed federal contributions. An analysis by Corporate Accountability, in partnership with Restaurant Opportunities Center United, Food Chain Workers Alliance, Berkeley Media Studies Group and the Real Food Media Project, found a disturbing correspondence between NRA campaign contributions and the propensity of those receiving them — like Senate Majority Leader Mitch McConnell and House Minority Leader Kevin McCarthy — to oppose progressive policies such improvements to food labeling, stronger worker protections and minimum wage increases.[...]
But in the mid-1980s, this momentum stopped. Big Tobacco had discovered a way to reverse local gains. And according to a 2020 study in the American Journal of Public Health, the industry’s counteroffensive has led to more disturbing and enduring ramifications for public health — and our democracy — than previously understood.
The strategy is called state or “ceiling” preemption: Promoting weaker state public health laws to override stronger local laws. Between 1986 and 1991, the tobacco industry rammed through seven state preemption laws. In the following five years, the industry gained steam, foisting 17 additional preemption policies on states. Laws restricting youth access to tobacco products would be reversed or never see the light of day. Laws establishing smoke-free environments were overridden. Tobacco tax increases were stalled. Restrictions on tobacco retail licensing were loosened.
Perhaps the study’s most concerning finding is that it takes an average of 11 years to repeal these laws — if they’re repealed at all. As of 2019, no preemption laws on youth access or tobacco marketing, and fewer than half of state preemption laws on smoke-free places, have been repealed. The tobacco industry has a long-documented history of targeting people in low-income communities and communities of color with the very tactics — like children-targeted marketing — preemption laws sought to protect. Consider the costs to public health and progress — especially in Black communities and other communities of color — when scarce resources are bound-up in undoing bad policies versus securing new public health protections. The smoking-attributable mortality rate is 18 percent higher among Black Americans than for white, with disproportionate childhood exposure to second-hand smoke and target marketing of products such as menthol among the heightened risk factors for the Black community.
The four tactics pursued by the tobacco industry are now being modeled across industries, such as the food and beverage sector, disproportionately affecting communities of color and exacerbating diet-related disease crises.
Preemption Harms Consumers — and Workers
Coca-Cola, McDonald’s, and the larger food and beverage industry have already seen to the enactment of at least a dozen laws preempting local public health policies like soda taxes, product labeling and restrictions on junk food marketing to kids. This has allowed the industry to continue its racist marketing campaigns, target marketing to Black youth and other youth of color. Understanding these tactics is key to undoing and preventing further proliferation of the industry’s preemption push.
Lobbying
First, to give Big Tobacco’s political agenda credibility, tobacco giants like R.J. Reynolds Tobacco Company have invested heavily in trade associations and front groups to do their bidding, from so-called “smokers’ rights groups” to restaurant, hotel and gaming associations. Unsurprisingly, a similar cast — like state affiliates of the U.S. Chamber of Commerce and National Restaurant Association (NRA) — are again the muscle behind state preemption pushes to block new soda taxes, as well as critical policies to assure food worker health and well-being, such as new paid sick leave requirements and minimum wage increases. In recent months alone, the Texas Supreme Court has quashed (for now) city efforts to guarantee municipal paid sick leave. The Minnesota Supreme Court ruled against the Minnesota Chamber of Commerce’s contention that Minneapolis’s paid sick leave requirements were preempted by state law. And the Power Coalition for Equity and Justice is mobilizing to undo what a spokesperson for the group calls “yet another tool of white supremacy” and an example of the “plantation mentality’s” manifestation in state politics: state preemption of local minimum wage increases.
Campaign Contributions
Second, Big Tobacco lavished money on federal elections. At the outset of the 1990s, the tobacco lobbies contributed more than $70 million. Predominantly, Republican candidates have received more than $50 million from the tobacco industry since 1990. In this same time period, the NRA and its biggest corporate members — like McDonald’s, Darden and Yum! Brands — combined to spend more than $60 million in disclosed federal contributions. An analysis by Corporate Accountability, in partnership with Restaurant Opportunities Center United, Food Chain Workers Alliance, Berkeley Media Studies Group and the Real Food Media Project, found a disturbing correspondence between NRA campaign contributions and the propensity of those receiving them — like Senate Majority Leader Mitch McConnell and House Minority Leader Kevin McCarthy — to oppose progressive policies such improvements to food labeling, stronger worker protections and minimum wage increases.[...]
systemic racism!!!
Watchdog questions why Wells Fargo reported giving only one large PPP loan to a Black-owned business
The bank processed more than 12,000 loans over $150,000. It reported giving only one to a Black-owned company
IGOR DERYSH - salon
JULY 23, 2020 2:45AM (UTC)
The Trump administration's reliance on big banks to distribute small business aid under the Paycheck Protection Program and a lack of transparency requirements have resulted in many Black-owned businesses being shut out of the program. One bank, Wells Fargo, reported distributing only one PPP loan larger than $150,000 to a Black-owned business out of the more than 12,000 it gave out.
Even when they had better financial profiles than white-owned businesses, Black business owners faced racial discrimination from banks, according to a recent study. A disproportionate number of PPP loans flowed to majority-white areas, The New York Times reported.
Big banks face multiple class-action lawsuits alleging they prioritized existing corporate clients over needy small businesses. The economic shock of the coronavirus and the lack of relief has left Black-owned businesses without a safety net, and as many as half may not survive the pandemic.
Part of the reason that so many Black-owned businesses were excluded is a lack of government oversight. The Treasury Department and Small Business Administration did not require applicants or banks to report demographic information — or even how many jobs the loans would save.
Wells Fargo, one of the largest banks in the U.S., reported distributing 12,147 PPP loans valued at $150,000 or more, according to data released by the Small Business Administration. It did not list how many jobs were retained on 8,190 of those loans, and it reported zero jobs saved on 3,957 of those loans. The bank reported race and ethnicity data on only 37 of those loans, only one of which went to a Black-owned business.
A spokesperson for Wells Fargo said it did not submit the data, because the government did not require it. However, the other four largest banks — Chase, Bank of America, Citibank, and U.S. Bank — failed to report jobs data on only 291 out of more than 78,000 loans.
"The SBA didn't require banks to submit information about payroll (including any metric regarding the retention of jobs)," the spokesperson said. "And our understanding is that this information won't be required until the application process for loan forgiveness begins, where applicants will need to document their payroll information."
The bank said the Small Business Administration similarly did not require the collection of race and ethnicity data, thus it did not collect it. The spokesperson added that 41% of its booked applications were for low- or moderate-income areas, and the average loan size was just over $56,000.
"With the passing of the extension of the program, as well as the start of the forgiveness process, we know our work is far from over," the spokesperson said, "and we will continue working tirelessly to support our customers and the wider small business community both within the context of the PPP and beyond."
A government watchdog argued that the SBA should have required this information from the start, blaming the move for the difficulty Black-owned businesses have faced in getting much-needed relief.
"Trump PPP failed to support small businesses in communities of color who are disproportionately impacted by this crisis, while wealthy publicly traded companies got the red-carpet treatment," Kyle Herrig, president of the progressive watchdog group Accountable.US, which launched TrumpBailouts to track recipients of federal relief, said. "The rejection of transparency and accountability sent a clear message to banks that they were free to ignore Black, Latinx or Asian small business owners in need without consequence – and that's exactly what they did. Congress needs to replace PPP with a new program that ensures resources make it to underserved communities across the country."
The problem is not limited to Wells Fargo. Hundreds of thousands of loans distributed by banks listed zero jobs saved, which experts say will "make accountability a challenge." This may also cause problems for companies when the loan forgiveness begins.
"It's going to be a big mess," Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, told Marketwatch. "Companies that have done everything right will be denied forgiveness, and vice versa. If you're not even asked how many employees you started with in the application process, then you're in big trouble."
Part of the problem, added Aaron Klein, a fellow and policy director of the Center on Regulation and Markets at the Brookings Institution, is that the "government relied on banks."
It remains unclear why the SBA provided so few requirements for banks, given that many have a controversial past when it comes to racial discrimination.
In 2012, Wells Fargo settled with the Department of Justice for $175 million after it was accused of charging Black and Latinx applicants higher rates and fees for home loans. It also agreed to pay millions to homeowners in Baltimore, which sued the bank in 2008 for "reverse redlining" practices that resulted in higher rates of foreclosure in minority communities.
In 2017, the Comptroller of the Currency said the bank "flunked" its community lending test due to the "extent and egregious nature of the evidence of discriminatory and illegal credit practices" and "extensive and pervasive pattern and practice of violations across multiple lines of business within the bank."
Last year, the bank reached a $10 million settlement with Philadelphia after it was accused of discriminating against minority borrowers and violating the Fair Housing Act by steering Black and Latinx borrowers into mortgages which were "riskier and more expensive than those offered to similarly situated white home-buyers," The Philadelphia Inquirer reported.
A federal investigation last year also found that the bank had discriminated against thousands of Black and women job applicants.
Despite its history, the Federal Reserve lifted its asset cap on the bank so it could offer PPP and other relief loans after it had been barred from growing its assets as a result of several scandals. The bank has paid more than $18 billion for the "widespread mistreatment of customers" since the 2008 financial crisis. In 2017, the bank admitted to creating about 3.5 million fake accounts to meet sales targets.
The bank now faces a class-action lawsuit accusing it of unfair practices against some small businesses which sought PPP loans, as well as a federal investigation into its PPP lending practices.
Even when they had better financial profiles than white-owned businesses, Black business owners faced racial discrimination from banks, according to a recent study. A disproportionate number of PPP loans flowed to majority-white areas, The New York Times reported.
Big banks face multiple class-action lawsuits alleging they prioritized existing corporate clients over needy small businesses. The economic shock of the coronavirus and the lack of relief has left Black-owned businesses without a safety net, and as many as half may not survive the pandemic.
Part of the reason that so many Black-owned businesses were excluded is a lack of government oversight. The Treasury Department and Small Business Administration did not require applicants or banks to report demographic information — or even how many jobs the loans would save.
Wells Fargo, one of the largest banks in the U.S., reported distributing 12,147 PPP loans valued at $150,000 or more, according to data released by the Small Business Administration. It did not list how many jobs were retained on 8,190 of those loans, and it reported zero jobs saved on 3,957 of those loans. The bank reported race and ethnicity data on only 37 of those loans, only one of which went to a Black-owned business.
A spokesperson for Wells Fargo said it did not submit the data, because the government did not require it. However, the other four largest banks — Chase, Bank of America, Citibank, and U.S. Bank — failed to report jobs data on only 291 out of more than 78,000 loans.
"The SBA didn't require banks to submit information about payroll (including any metric regarding the retention of jobs)," the spokesperson said. "And our understanding is that this information won't be required until the application process for loan forgiveness begins, where applicants will need to document their payroll information."
The bank said the Small Business Administration similarly did not require the collection of race and ethnicity data, thus it did not collect it. The spokesperson added that 41% of its booked applications were for low- or moderate-income areas, and the average loan size was just over $56,000.
"With the passing of the extension of the program, as well as the start of the forgiveness process, we know our work is far from over," the spokesperson said, "and we will continue working tirelessly to support our customers and the wider small business community both within the context of the PPP and beyond."
A government watchdog argued that the SBA should have required this information from the start, blaming the move for the difficulty Black-owned businesses have faced in getting much-needed relief.
"Trump PPP failed to support small businesses in communities of color who are disproportionately impacted by this crisis, while wealthy publicly traded companies got the red-carpet treatment," Kyle Herrig, president of the progressive watchdog group Accountable.US, which launched TrumpBailouts to track recipients of federal relief, said. "The rejection of transparency and accountability sent a clear message to banks that they were free to ignore Black, Latinx or Asian small business owners in need without consequence – and that's exactly what they did. Congress needs to replace PPP with a new program that ensures resources make it to underserved communities across the country."
The problem is not limited to Wells Fargo. Hundreds of thousands of loans distributed by banks listed zero jobs saved, which experts say will "make accountability a challenge." This may also cause problems for companies when the loan forgiveness begins.
"It's going to be a big mess," Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, told Marketwatch. "Companies that have done everything right will be denied forgiveness, and vice versa. If you're not even asked how many employees you started with in the application process, then you're in big trouble."
Part of the problem, added Aaron Klein, a fellow and policy director of the Center on Regulation and Markets at the Brookings Institution, is that the "government relied on banks."
It remains unclear why the SBA provided so few requirements for banks, given that many have a controversial past when it comes to racial discrimination.
In 2012, Wells Fargo settled with the Department of Justice for $175 million after it was accused of charging Black and Latinx applicants higher rates and fees for home loans. It also agreed to pay millions to homeowners in Baltimore, which sued the bank in 2008 for "reverse redlining" practices that resulted in higher rates of foreclosure in minority communities.
In 2017, the Comptroller of the Currency said the bank "flunked" its community lending test due to the "extent and egregious nature of the evidence of discriminatory and illegal credit practices" and "extensive and pervasive pattern and practice of violations across multiple lines of business within the bank."
Last year, the bank reached a $10 million settlement with Philadelphia after it was accused of discriminating against minority borrowers and violating the Fair Housing Act by steering Black and Latinx borrowers into mortgages which were "riskier and more expensive than those offered to similarly situated white home-buyers," The Philadelphia Inquirer reported.
A federal investigation last year also found that the bank had discriminated against thousands of Black and women job applicants.
Despite its history, the Federal Reserve lifted its asset cap on the bank so it could offer PPP and other relief loans after it had been barred from growing its assets as a result of several scandals. The bank has paid more than $18 billion for the "widespread mistreatment of customers" since the 2008 financial crisis. In 2017, the bank admitted to creating about 3.5 million fake accounts to meet sales targets.
The bank now faces a class-action lawsuit accusing it of unfair practices against some small businesses which sought PPP loans, as well as a federal investigation into its PPP lending practices.
NY equity management firm under investigation for alleged Ponzi scheme received $1.6 million in stimulus aid: WSJ
July 18, 2020
By Matthew Chapman - RAW STORY
On Saturday, The Wall Street Journal reported that one of the businesses that received stimulus through the embattled Paycheck Protection Program (PPP) was a private equity firm in New York accused of running a “Ponzi scheme.”
“In New York City, the private-equity firm GPB Capital Holdings LLC is the target of several class-action lawsuits claiming that the firm operates as a Ponzi scheme,” reported Cezary Podkul and Orla McCaffrey. “GPB itself has stated in a regulatory filing that it has been facing a variety of investigations, by the Securities and Exchange Commission and financial regulators in several states, including Massachusetts, which brought a civil fraud claim against the company in May.”
“GPB and at least two of its affiliates in late April received PPP loans totaling upward of $1.6 million, according to data disclosed by the SBA and information provided by a GPB spokeswoman,” continued the report. “The spokeswoman said ‘both the application and use of funds were in direct accordance with the SBA guidelines.'”
The Journal also found that funds have gone to “A Missouri televangelist and a Texas multilevel marketing company that were each warned by regulators for allegedly touting fake coronavirus treatments” and “A Christian university based in California that pleaded guilty to a felony charge related to a $35 million money-laundering operation.”
The PPP has come under fire for a series of reports that the stimulus has gone in part to large businesses and other unintended recipients, rather than small businesses that depend on the loans for survival. Some of the money has even reportedly gone to dioceses of the Catholic Church that have paid out settlements in priest sexual abuse cases.
Some of these reports have prompted the Trump administration to ask for refunds from some of the entities, with Treasury Secretary Steve Mnuchin asking privately-endowed prep schools to return PPP money.
“In New York City, the private-equity firm GPB Capital Holdings LLC is the target of several class-action lawsuits claiming that the firm operates as a Ponzi scheme,” reported Cezary Podkul and Orla McCaffrey. “GPB itself has stated in a regulatory filing that it has been facing a variety of investigations, by the Securities and Exchange Commission and financial regulators in several states, including Massachusetts, which brought a civil fraud claim against the company in May.”
“GPB and at least two of its affiliates in late April received PPP loans totaling upward of $1.6 million, according to data disclosed by the SBA and information provided by a GPB spokeswoman,” continued the report. “The spokeswoman said ‘both the application and use of funds were in direct accordance with the SBA guidelines.'”
The Journal also found that funds have gone to “A Missouri televangelist and a Texas multilevel marketing company that were each warned by regulators for allegedly touting fake coronavirus treatments” and “A Christian university based in California that pleaded guilty to a felony charge related to a $35 million money-laundering operation.”
The PPP has come under fire for a series of reports that the stimulus has gone in part to large businesses and other unintended recipients, rather than small businesses that depend on the loans for survival. Some of the money has even reportedly gone to dioceses of the Catholic Church that have paid out settlements in priest sexual abuse cases.
Some of these reports have prompted the Trump administration to ask for refunds from some of the entities, with Treasury Secretary Steve Mnuchin asking privately-endowed prep schools to return PPP money.
Double-dipping spotted among PPP healthcare loan recipients
By Phil Mattera, DC Report @ Raw Story - Commentary
on July 17, 2020
Healthcare providers have faced significant challenges during the pandemic, but it was still surprising to see that sector show up as the largest recipient of assistance under the Paycheck Protection Program. That’s because hospitals and other providers were already receiving tens of billions of dollars in federal aid from other CARES Act programs.
To the growing list of PPP defects, we can add: double-dipping by healthcare recipients.
Take the case of Bronxcare, which operates a number of health facilities in New York City. Two of its units were revealed to have gotten PPP loans worth $2 to $5 million each (the amounts were disclosed as ranges). Previously, it received more than $100 million from the HHS Provider Relief Fund.
The Great Plains Health Alliance, a health system headquartered in Kansas, received seven PPP loans worth up to $11 million. Previously, it received more than $24 million in grants under the Provider Relief Fund as well as $16 million in expedited funds through the Medicare Accelerated and Advance Payment Program.
The Erie County Medical Center in Buffalo, New York received a PPP loan worth between $5 million and $10 million after having received more than $40 million from the Provider Relief Fund and over $35 million in accelerated Medicare payments.
Bronxcare, Great Plains and Erie County Medical are all non-profits, but double-dipping can also be found among for-profit healthcare providers. Vibra Healthcare, which operates hospitals in 18 states, received at least 16 PPP loans worth between $24 million and $56 million. As ProPublica pointed out in its investigation of the company, Vibra applied for the loans in the names of numerous subsidiary LLCs rather than the parent company.
Triple Dipping
Zwanger-Pesiri Radiology, which operates imaging facilities in New York City and Long Island and received a PPP loan worth $2-$5 million, also received $4 million from the Provider Relief Fund and $9 million in accelerated Medicare payments.
Altogether, Covid Stimulus Watch contains data on more than 40 healthcare companies that got PPP loans as well as assistance from other CARES Act programs.
These overlaps are made more controversial by the fact that some of the double-dippers have checkered records when it comes to regulatory compliance, including issues relating to billing irregularities. For example, in 2016 Vibra Healthcare had to pay $32.7 million to resolve a federal False Claims Act case alleging that it billed Medicare for medically unnecessary services. In 2019 it paid $6.2 million to settle a Medicare fraud case.
In 2016 Zwanger-Pesiri paid $10.5 million to settle allegations that it billed Medicare and Medicaid for procedures that had not been ordered by physicians. Along with the usual civil allegations, the company pled guilty to two counts of criminal fraud.
In 2013 Erie County Medical Center paid $268,000 to the New York State Attorney General to resolve allegations of excessive Medicaid billing, and it paid $335,000 to the U.S. Labor Department for wage and hour violations.
Monitoring Assistance Needed
The healthcare providers may have broken no rules in applying for PPP loans while also receiving assistance from other COVID-19-related programs, but their ability to do so points to the need for the federal government to take a more coordinated approach to CARES Act assistance.
The fact that some of the double-dippers also have a history of misconduct—including cheating the same federal government now awarding them grants and loans—highlights the need for even greater scrutiny of recipients.
To the growing list of PPP defects, we can add: double-dipping by healthcare recipients.
Take the case of Bronxcare, which operates a number of health facilities in New York City. Two of its units were revealed to have gotten PPP loans worth $2 to $5 million each (the amounts were disclosed as ranges). Previously, it received more than $100 million from the HHS Provider Relief Fund.
The Great Plains Health Alliance, a health system headquartered in Kansas, received seven PPP loans worth up to $11 million. Previously, it received more than $24 million in grants under the Provider Relief Fund as well as $16 million in expedited funds through the Medicare Accelerated and Advance Payment Program.
The Erie County Medical Center in Buffalo, New York received a PPP loan worth between $5 million and $10 million after having received more than $40 million from the Provider Relief Fund and over $35 million in accelerated Medicare payments.
Bronxcare, Great Plains and Erie County Medical are all non-profits, but double-dipping can also be found among for-profit healthcare providers. Vibra Healthcare, which operates hospitals in 18 states, received at least 16 PPP loans worth between $24 million and $56 million. As ProPublica pointed out in its investigation of the company, Vibra applied for the loans in the names of numerous subsidiary LLCs rather than the parent company.
Triple Dipping
Zwanger-Pesiri Radiology, which operates imaging facilities in New York City and Long Island and received a PPP loan worth $2-$5 million, also received $4 million from the Provider Relief Fund and $9 million in accelerated Medicare payments.
Altogether, Covid Stimulus Watch contains data on more than 40 healthcare companies that got PPP loans as well as assistance from other CARES Act programs.
These overlaps are made more controversial by the fact that some of the double-dippers have checkered records when it comes to regulatory compliance, including issues relating to billing irregularities. For example, in 2016 Vibra Healthcare had to pay $32.7 million to resolve a federal False Claims Act case alleging that it billed Medicare for medically unnecessary services. In 2019 it paid $6.2 million to settle a Medicare fraud case.
In 2016 Zwanger-Pesiri paid $10.5 million to settle allegations that it billed Medicare and Medicaid for procedures that had not been ordered by physicians. Along with the usual civil allegations, the company pled guilty to two counts of criminal fraud.
In 2013 Erie County Medical Center paid $268,000 to the New York State Attorney General to resolve allegations of excessive Medicaid billing, and it paid $335,000 to the U.S. Labor Department for wage and hour violations.
Monitoring Assistance Needed
The healthcare providers may have broken no rules in applying for PPP loans while also receiving assistance from other COVID-19-related programs, but their ability to do so points to the need for the federal government to take a more coordinated approach to CARES Act assistance.
The fact that some of the double-dippers also have a history of misconduct—including cheating the same federal government now awarding them grants and loans—highlights the need for even greater scrutiny of recipients.
the ripoff continues!!!
BANKS STAND TO MAKE $18 BILLION IN PPP PROCESSING FEES FROM CARES ACT
Bryce Covert - the intercept
July 14 2020, 4:00 a.m.
BANKS WILL MAKE out with $18 billion in fees for processing small business Paycheck Protection Program relief loans during the pandemic, according to calculations by Amanda Fischer, policy director at the Washington Center for Equitable Growth, a progressive economic think tank.
That’s money taken directly out of the overall $640 billion pot of funding Congress allocated to the program it created as part of the CARES Act. “If we did it through a public institution, there would be [more than] $140 billion left,” Fischer noted, as opposed to the $130 billion still up for grabs. The Washington Center for Equitable Growth is releasing an analysis of the government response to the pandemic as soon as this week.
The fees compensate the banks for some of the costs that come with processing loans — call center time to handle business owners’ questions, employee hours spent on processing paperwork for both loan and forgiveness applications — and some of the risk they shoulder if any of the loans they extend end up being fraudulent. But there is no credit risk; if business owners who qualified for PPP loans later default, the Small Business Association takes the hit, not the banks. “Basically it’s free money,” Fischer said.
For some banks, this money represents a hefty windfall. New Jersey-based Cross River Bank’s estimated $163 million haul would be more than double its net revenue last year. JPMorgan Chase could make $864 million.
The fact that banks are siphoning money off of the relief program is thanks to the fact that the United States had no existing public infrastructure ready to quickly get money out to struggling businesses when the pandemic hit.
Fischer characterized it as “a failure of preparedness,” adding, “We should have invested in better systems.” The Small Business Association, which is running the PPP program, has long been criticized for struggling to process emergency relief quickly during past natural disasters. So when the time came to respond to the coronavirus crisis as fast as possible, the SBA was in no position to do it itself, and Congress mandated that the loans be run through banks instead. There weren’t many other options. “It’s hard to build the plane while you’re flying it,” Fischer said.
But on top of the fact that the program leaked money to banks, relying on these firms meant an uneven distribution of funds. One study found that areas served by the country’s four largest banks — JPMorgan Chase, Wells Fargo, Citibank, and Bank of America — underperformed in terms of how many businesses got PPP funding. On the flip side, another found that places with large numbers of mid-sized and community banks saw more businesses get PPP loans. That meant that whether a small business received the money it needed to stay afloat depended in large part on the composition of financial institutions in its area. “That’s a really perverse outcome,” Fischer said.
The other major business relief program, the Federal Reserve’s Main Street Lending Program, is also being run through private Wall Street firms. The Fed contracted with asset management firms BlackRock and Pimco to help it purchase hundreds of billions of dollars worth of commercial bonds and short-term borrowings to shore up mid-sized companies, doing so without soliciting bids from any other firms.
“This is another example where, theoretically, it could have been done in-house,” Fischer said. She notes that the Fed has 23,000 employees, some of whom could have been deployed to purchase investments for the Fed themselves. Instead, advocates are warning of vast conflicts of interest in having BlackRock and Pimco do it, as both firms are also shareholders or bondholders in many of the companies from which they may buy investments at the behest of the Federal Reserve. BlackRock can even purchase its own exchange-traded funds. Financial reform advocates have also warned that BlackRock could use inside information from the Federal Reserve to make its own proprietary trades.
BlackRock stands to make as much as $40 million a year from the program through the fees it will charge for setting up the program and on each bond or loan it purchases. Still, that’s not a huge windfall for a firm that manages trillions of dollars in assets. What Fischer sees it accruing is, instead, power. “I imagine [BlackRock CEO] Larry Fink has [Federal Reserve Chair] Jay Powell on speed dial,” she said. “If the Fed needs to rely on you to stabilize the entire economy, then there’s not a lot of room for them to push back and regulate you rein in your conduct in other circumstances.”
Instead of using such a privatized system, governments of other European countries have just directly paid companies for their payroll costs to keep them from firing employees. The approach dampened skyrocketing unemployment numbers in the beginning of the crisis. In Denmark, businesses simply applied for money directly from the government’s Danish Business Authority. “They had the capacity to just, in-house, accept all the applications … and get money to small businesses in a time-effective way,” Fischer noted. “The SBA could never do that.” But if the SBA had already been well-funded and organized, and if it had relationships with the Internal Revenue Service or payroll processing companies, it could have played a similar role.
Fischer noted that there has been little public outrage over the fact that banks skimmed PPP money in the form of fees, whether or not it was authorized. Instead, outrage has been directed at companies and people that received PPP loans but don’t appear deserving, or the IRS sending stimulus checks to dead people. The $18 billion captured by banks “is technically above board,” she noted. “But it’s a much bigger grift than some elderly person getting a check because their spouse died three months ago.”
That’s money taken directly out of the overall $640 billion pot of funding Congress allocated to the program it created as part of the CARES Act. “If we did it through a public institution, there would be [more than] $140 billion left,” Fischer noted, as opposed to the $130 billion still up for grabs. The Washington Center for Equitable Growth is releasing an analysis of the government response to the pandemic as soon as this week.
The fees compensate the banks for some of the costs that come with processing loans — call center time to handle business owners’ questions, employee hours spent on processing paperwork for both loan and forgiveness applications — and some of the risk they shoulder if any of the loans they extend end up being fraudulent. But there is no credit risk; if business owners who qualified for PPP loans later default, the Small Business Association takes the hit, not the banks. “Basically it’s free money,” Fischer said.
For some banks, this money represents a hefty windfall. New Jersey-based Cross River Bank’s estimated $163 million haul would be more than double its net revenue last year. JPMorgan Chase could make $864 million.
The fact that banks are siphoning money off of the relief program is thanks to the fact that the United States had no existing public infrastructure ready to quickly get money out to struggling businesses when the pandemic hit.
Fischer characterized it as “a failure of preparedness,” adding, “We should have invested in better systems.” The Small Business Association, which is running the PPP program, has long been criticized for struggling to process emergency relief quickly during past natural disasters. So when the time came to respond to the coronavirus crisis as fast as possible, the SBA was in no position to do it itself, and Congress mandated that the loans be run through banks instead. There weren’t many other options. “It’s hard to build the plane while you’re flying it,” Fischer said.
But on top of the fact that the program leaked money to banks, relying on these firms meant an uneven distribution of funds. One study found that areas served by the country’s four largest banks — JPMorgan Chase, Wells Fargo, Citibank, and Bank of America — underperformed in terms of how many businesses got PPP funding. On the flip side, another found that places with large numbers of mid-sized and community banks saw more businesses get PPP loans. That meant that whether a small business received the money it needed to stay afloat depended in large part on the composition of financial institutions in its area. “That’s a really perverse outcome,” Fischer said.
The other major business relief program, the Federal Reserve’s Main Street Lending Program, is also being run through private Wall Street firms. The Fed contracted with asset management firms BlackRock and Pimco to help it purchase hundreds of billions of dollars worth of commercial bonds and short-term borrowings to shore up mid-sized companies, doing so without soliciting bids from any other firms.
“This is another example where, theoretically, it could have been done in-house,” Fischer said. She notes that the Fed has 23,000 employees, some of whom could have been deployed to purchase investments for the Fed themselves. Instead, advocates are warning of vast conflicts of interest in having BlackRock and Pimco do it, as both firms are also shareholders or bondholders in many of the companies from which they may buy investments at the behest of the Federal Reserve. BlackRock can even purchase its own exchange-traded funds. Financial reform advocates have also warned that BlackRock could use inside information from the Federal Reserve to make its own proprietary trades.
BlackRock stands to make as much as $40 million a year from the program through the fees it will charge for setting up the program and on each bond or loan it purchases. Still, that’s not a huge windfall for a firm that manages trillions of dollars in assets. What Fischer sees it accruing is, instead, power. “I imagine [BlackRock CEO] Larry Fink has [Federal Reserve Chair] Jay Powell on speed dial,” she said. “If the Fed needs to rely on you to stabilize the entire economy, then there’s not a lot of room for them to push back and regulate you rein in your conduct in other circumstances.”
Instead of using such a privatized system, governments of other European countries have just directly paid companies for their payroll costs to keep them from firing employees. The approach dampened skyrocketing unemployment numbers in the beginning of the crisis. In Denmark, businesses simply applied for money directly from the government’s Danish Business Authority. “They had the capacity to just, in-house, accept all the applications … and get money to small businesses in a time-effective way,” Fischer noted. “The SBA could never do that.” But if the SBA had already been well-funded and organized, and if it had relationships with the Internal Revenue Service or payroll processing companies, it could have played a similar role.
Fischer noted that there has been little public outrage over the fact that banks skimmed PPP money in the form of fees, whether or not it was authorized. Instead, outrage has been directed at companies and people that received PPP loans but don’t appear deserving, or the IRS sending stimulus checks to dead people. The $18 billion captured by banks “is technically above board,” she noted. “But it’s a much bigger grift than some elderly person getting a check because their spouse died three months ago.”
Different Names, Same Address: How Big Businesses Got Government Loans Meant for Small Businesses
ProPublica found at least 15 large companies that received over half a billion dollars in PPP loans using the same technique: Getting multiple loans sent to smaller entities they own.
by Paul Kiel and Jack Gillum - the intercept
July 14, 12:40 p.m. EDT
The Paycheck Protection Program was launched to rescue the little guy, the millions of small businesses without the deep pockets needed to survive the COVID-19 shock.
But among the restaurants, dentists and mom-and-pops was Vibra Healthcare, a chain of hospitals and therapy centers spread across 19 states with over 9,000 employees. The biggest PPP loan was supposed to be $10 million, but Vibra found a way to land as much as $97 million.
In other contexts, Vibra boasts annual revenues of $1 billion, but when the company got in line to receive what is essentially free government money (the loans are forgivable), it made itself seem small. From Vibra’s corporate address in Pennsylvania, 26 limited liability companies received PPP loans, 23 of them from the same bank, with almost all the loan approvals coming on the same day in April.
ProPublica found several other large businesses employing the same apparent strategy of counting each of their LLCs or other entities as a separate business. In Las Vegas, a casino operator backed by hedge funds got 20 loans. Two nursing home chains received tens of millions of dollars: One chain in Illinois got loans for 51 different entities, while another based in Georgia got 19. Together, ProPublica was able to identify up to $516 million that flowed to just 15 organizations.
ProPublica’s findings bring into sharper focus how companies with thousands of employees were able to get assistance, just as some small businesses were reluctant to even apply. So far, the PPP has paid out more than $517 billion to 4.9 million companies — loans that can be forgiven if used to cover payroll, rent, mortgage interest or utilities. It was among the most generous of programs for businesses in the CARES Act. Loan programs for medium and large businesses spelled out in the bill generally were not forgivable. Appraisals of the PPP by economists and policymakers have been mixed: While the program did inject hundreds of billions into the economy, it did not do so efficiently, often sending aid where it was less needed, and going through banks meant well-connected businesses had a far easier time getting their share.
Amanda Fischer, policy director of the Washington Center for Equitable Growth, said there should have been enough money available to help every company quickly — even those with large payrolls. “But if we’re not going to do that, I do understand concerns about businesses that don’t technically comply, and it’s not a good look.”
“It’s Congress’ fault,” she said. “We should have helped everyone, or targeted the neediest businesses instead.”
The Small Business Administration generally defines small businesses as those with 500 employees or fewer.
Congress carved an exception into the CARES Act for restaurants and hotels, allowing them to count each location as its own business, but after large restaurant chains like Shake Shack disclosed they’d taken PPP loans, the Treasury Department responded to the uproar by changing the rules to set $20 million as the maximum any one corporate group could accept. Businesses that had taken more, the government said, had to give the money back.
The chains we identified were not restaurants or hotels, but experts told ProPublica that, without knowing all the details of an entity’s control, it is difficult to say definitively whether a company had broken the program’s rules.
Fifty-one separate limited liability companies or other business entities tie back to the headquarters of Peoria, Illinois-based Petersen Health Care, which runs nursing homes and other health facilities in the region. The loans would secure at least 6,200 jobs, records show, which would total more than $52 million if the chain got the maximum amount of funding. (When the SBA released information about PPP recipients last week, it only provided ranges for the amount of each loan.)
At least 30 of those entities are nursing homes or care facilities in Illinois, according to state business documents and data from the federal Centers for Medicare and Medicaid Services. More than a third were given Medicare’s lowest 1-star rating, which the government considers “much below average” when examining health inspections, staffing and other quality measures. The loans would support about 1,900 jobs among those facilities.
The firm and its owner, Mark Petersen, did not respond to phone messages and emails seeking comment. A person who answered Petersen’s main number last week transferred ProPublica to the company’s legal department, which did not return a voicemail seeking comment.
In Maryland, a different set of 19 loan recipients traced back to an office park about 30 minutes north of Baltimore. Business records show most of those companies had another Georgia address, the home of Mariner Health Care Inc.
Mariner, which was acquired in 2004 by National Senior Care Inc. for $615 million, has 20 nursing homes and care centers in Southern California and the San Francisco Bay Area, according to its website. Those companies could receive as much as $31 million in maximum SBA funding, data shows, which could help safeguard more than 1,600 jobs.
Mariner did not answer phone calls at its main number, nor did the company respond to emails sent to an address on its website.
Another big beneficiary of the small-business program was Las Vegas-based Maverick Gaming, which has been on a casino-buying spree, backed by hedge funds, since it launched in 2017. The company owns and operates 26 casinos across three states. The company was valued at about $1 billion, Maverick CEO and owner Eric Persson told the trade magazine Global Gaming Business last year.
SBA data shows upward of $46 million going to Maverick’s companies, all of the loans arranged by the same bank. Persson, reached by phone, declined to comment.
Vibra, from its base in Mechanicsburg, Pennsylvania, specializes in hospitals that provide “post-acute” care to recovering patients. Its CEO, Brad Hollinger, has drawn on Vibra’s success to become a player on the international racing circuit: He’s a major shareholder of the British Formula One team Williams Racing. Although a car racing enthusiast, he said in 2015 that he’d bought into the team primarily for business reasons. “I am never in business not to make money,” he told Reuters.
The PPP loans are just one way the company has been buoyed by the CARES Act: Vibra hospitals have also received at least $13 million in grants for health care providers and $41 million in loans (in the form of advanced Medicare payments), according to Good Jobs First, a government and corporate watchdog based in Washington.
In publicity materials, Vibra refers to its hospitals and rehab centers as “affiliates,” but for purposes of the PPP, it appears to have treated all these LLCs as unrelated companies, receiving between $42 million and $97 million in total. Together, the companies reported retaining a total of 4,600 jobs.
Twice in recent years, Vibra has been penalized for bilking the government. In 2016, Vibra paid $33 million to the Justice Department to settle allegations that it had defrauded Medicare by admitting and keeping patients for unnecessarily long stays in order to drive up billings. Last November, Vibra paid $6 million more in a different settlement with the government; this time, it had allegedly billed Medicare for doctor visits that did not happen. In the settlements, Vibra did not admit to any wrongdoing.
There are signs that Vibra is weathering the COVID-19 outbreak well. Last month, the company announced it would manage a new hospital being constructed in Bakersfield, California. The company did not respond to multiple requests for comment.
Generally, the SBA looks at “the entirety of the organization” in determining whether businesses should be considered affiliates or separate businesses, which means taking into account “common ownership, intertwined management and economic dependence between entities,” said Megan Jeschke, a partner at the law firm Holland & Knight. In her experience defending companies accused of violating the affiliation rules, the SBA has tended to be “rigid” in interpreting the rules and frequently finds that apparently related companies are in fact affiliates, she said.
After large businesses were revealed to have taken PPP money, Treasury Secretary Steven Mnuchin said in late April that the SBA would conduct a “full review” of each PPP loan of $2 million and up. As of last week, about 29,000 such loans had been made. Given that volume, it’s unclear just how thorough the reviews might be. The SBA did not respond to a request from ProPublica seeking comment.
Last week, following pressure from watchdog groups and Congress, the Trump administration disclosed only those entities that were approved by banks for loans over $150,000. A consortium of news organizations, including ProPublica, had sued the administration under the Freedom of Information Act to release the full list of recipients and loan details.
“The vast number of PPP grants went to truly small businesses — but a lot of the money went to big businesses,” said Aaron Klein, policy director of the Brookings Institution’s Center on Regulation and Markets. “The media attention is going to focus, and crystallize, how much big businesses got out of this program.”
But among the restaurants, dentists and mom-and-pops was Vibra Healthcare, a chain of hospitals and therapy centers spread across 19 states with over 9,000 employees. The biggest PPP loan was supposed to be $10 million, but Vibra found a way to land as much as $97 million.
In other contexts, Vibra boasts annual revenues of $1 billion, but when the company got in line to receive what is essentially free government money (the loans are forgivable), it made itself seem small. From Vibra’s corporate address in Pennsylvania, 26 limited liability companies received PPP loans, 23 of them from the same bank, with almost all the loan approvals coming on the same day in April.
ProPublica found several other large businesses employing the same apparent strategy of counting each of their LLCs or other entities as a separate business. In Las Vegas, a casino operator backed by hedge funds got 20 loans. Two nursing home chains received tens of millions of dollars: One chain in Illinois got loans for 51 different entities, while another based in Georgia got 19. Together, ProPublica was able to identify up to $516 million that flowed to just 15 organizations.
ProPublica’s findings bring into sharper focus how companies with thousands of employees were able to get assistance, just as some small businesses were reluctant to even apply. So far, the PPP has paid out more than $517 billion to 4.9 million companies — loans that can be forgiven if used to cover payroll, rent, mortgage interest or utilities. It was among the most generous of programs for businesses in the CARES Act. Loan programs for medium and large businesses spelled out in the bill generally were not forgivable. Appraisals of the PPP by economists and policymakers have been mixed: While the program did inject hundreds of billions into the economy, it did not do so efficiently, often sending aid where it was less needed, and going through banks meant well-connected businesses had a far easier time getting their share.
Amanda Fischer, policy director of the Washington Center for Equitable Growth, said there should have been enough money available to help every company quickly — even those with large payrolls. “But if we’re not going to do that, I do understand concerns about businesses that don’t technically comply, and it’s not a good look.”
“It’s Congress’ fault,” she said. “We should have helped everyone, or targeted the neediest businesses instead.”
The Small Business Administration generally defines small businesses as those with 500 employees or fewer.
Congress carved an exception into the CARES Act for restaurants and hotels, allowing them to count each location as its own business, but after large restaurant chains like Shake Shack disclosed they’d taken PPP loans, the Treasury Department responded to the uproar by changing the rules to set $20 million as the maximum any one corporate group could accept. Businesses that had taken more, the government said, had to give the money back.
The chains we identified were not restaurants or hotels, but experts told ProPublica that, without knowing all the details of an entity’s control, it is difficult to say definitively whether a company had broken the program’s rules.
Fifty-one separate limited liability companies or other business entities tie back to the headquarters of Peoria, Illinois-based Petersen Health Care, which runs nursing homes and other health facilities in the region. The loans would secure at least 6,200 jobs, records show, which would total more than $52 million if the chain got the maximum amount of funding. (When the SBA released information about PPP recipients last week, it only provided ranges for the amount of each loan.)
At least 30 of those entities are nursing homes or care facilities in Illinois, according to state business documents and data from the federal Centers for Medicare and Medicaid Services. More than a third were given Medicare’s lowest 1-star rating, which the government considers “much below average” when examining health inspections, staffing and other quality measures. The loans would support about 1,900 jobs among those facilities.
The firm and its owner, Mark Petersen, did not respond to phone messages and emails seeking comment. A person who answered Petersen’s main number last week transferred ProPublica to the company’s legal department, which did not return a voicemail seeking comment.
In Maryland, a different set of 19 loan recipients traced back to an office park about 30 minutes north of Baltimore. Business records show most of those companies had another Georgia address, the home of Mariner Health Care Inc.
Mariner, which was acquired in 2004 by National Senior Care Inc. for $615 million, has 20 nursing homes and care centers in Southern California and the San Francisco Bay Area, according to its website. Those companies could receive as much as $31 million in maximum SBA funding, data shows, which could help safeguard more than 1,600 jobs.
Mariner did not answer phone calls at its main number, nor did the company respond to emails sent to an address on its website.
Another big beneficiary of the small-business program was Las Vegas-based Maverick Gaming, which has been on a casino-buying spree, backed by hedge funds, since it launched in 2017. The company owns and operates 26 casinos across three states. The company was valued at about $1 billion, Maverick CEO and owner Eric Persson told the trade magazine Global Gaming Business last year.
SBA data shows upward of $46 million going to Maverick’s companies, all of the loans arranged by the same bank. Persson, reached by phone, declined to comment.
Vibra, from its base in Mechanicsburg, Pennsylvania, specializes in hospitals that provide “post-acute” care to recovering patients. Its CEO, Brad Hollinger, has drawn on Vibra’s success to become a player on the international racing circuit: He’s a major shareholder of the British Formula One team Williams Racing. Although a car racing enthusiast, he said in 2015 that he’d bought into the team primarily for business reasons. “I am never in business not to make money,” he told Reuters.
The PPP loans are just one way the company has been buoyed by the CARES Act: Vibra hospitals have also received at least $13 million in grants for health care providers and $41 million in loans (in the form of advanced Medicare payments), according to Good Jobs First, a government and corporate watchdog based in Washington.
In publicity materials, Vibra refers to its hospitals and rehab centers as “affiliates,” but for purposes of the PPP, it appears to have treated all these LLCs as unrelated companies, receiving between $42 million and $97 million in total. Together, the companies reported retaining a total of 4,600 jobs.
Twice in recent years, Vibra has been penalized for bilking the government. In 2016, Vibra paid $33 million to the Justice Department to settle allegations that it had defrauded Medicare by admitting and keeping patients for unnecessarily long stays in order to drive up billings. Last November, Vibra paid $6 million more in a different settlement with the government; this time, it had allegedly billed Medicare for doctor visits that did not happen. In the settlements, Vibra did not admit to any wrongdoing.
There are signs that Vibra is weathering the COVID-19 outbreak well. Last month, the company announced it would manage a new hospital being constructed in Bakersfield, California. The company did not respond to multiple requests for comment.
Generally, the SBA looks at “the entirety of the organization” in determining whether businesses should be considered affiliates or separate businesses, which means taking into account “common ownership, intertwined management and economic dependence between entities,” said Megan Jeschke, a partner at the law firm Holland & Knight. In her experience defending companies accused of violating the affiliation rules, the SBA has tended to be “rigid” in interpreting the rules and frequently finds that apparently related companies are in fact affiliates, she said.
After large businesses were revealed to have taken PPP money, Treasury Secretary Steven Mnuchin said in late April that the SBA would conduct a “full review” of each PPP loan of $2 million and up. As of last week, about 29,000 such loans had been made. Given that volume, it’s unclear just how thorough the reviews might be. The SBA did not respond to a request from ProPublica seeking comment.
Last week, following pressure from watchdog groups and Congress, the Trump administration disclosed only those entities that were approved by banks for loans over $150,000. A consortium of news organizations, including ProPublica, had sued the administration under the Freedom of Information Act to release the full list of recipients and loan details.
“The vast number of PPP grants went to truly small businesses — but a lot of the money went to big businesses,” said Aaron Klein, policy director of the Brookings Institution’s Center on Regulation and Markets. “The media attention is going to focus, and crystallize, how much big businesses got out of this program.”
Thieves And Scoundrels Spotted Among SBA Payroll Loan Recipients
Survey Finds Dozens of Companies Guilty of Wage Thefts Among Borrowers of Public Funds; More Names To Come
By Phil Mattera, Dirt Diggers Digest
7/11/2020
Many of Uncle Sam’s coronavirus-driven loans did not go to Mom and Pop, but to the brotherhood of the thieving rich.
The Trump administration’s reluctant disclosure of the names of more than 600,000 recipients of Paycheck Protection Program aid has shown that many of the loans went to firms that are well-connected.
The companies don’t fit the image of mom-and-pop businesses we were led to believe would be the main beneficiaries.
There is another problem: Many of the recipients previously engaged in behavior that amounts to paycheck endangerment. They failed to comply with minimum wage and/or overtime requirements and thus paid their workers less than what they were owed. In other words, they engaged in wage theft.
This comes from an analysis of data my colleagues and I have collected for the COVID Stimulus Watch and Violation Tracker databases. That includes the big PPP dataset and information on penalties imposed by the Labor Department’s Wage and Hour Division, one of the many agencies whose enforcement data can be found in Violation Tracker.
We are in the process of determining which PPP recipients are on the list of wage and hour violators, so we can highlight that in COVID Stimulus Watch along with other corporate accountability data.
88 Firms Spotted so Far
As a first step, I looked at the 4,800 companies identified as receiving the largest PPP loans–$5 million to $10 million. So far, I have found 88 of those recipients that paid wage theft penalties since 2010. Their penalties averaged about $100,000—which is roughly double the amount paid in back pay and fines in a typical wage and hour case.
The largest wage theft penalty I’ve found for a PPP recipient is the $1.9 million paid by Hutco Inc., a marine and shipyard staffing agency based in Louisiana. In announcing the penalty, Labor said the company had utilized improper pay and record-keeping practices, resulting in “systemic overtime violations” affecting more than 2,000 workers.
PPP recipient National Food Corp., a major egg producer, paid $435,000 in penalties for wage and hour violations at its operations in Washington State. The company also paid $650,000 to settle a sexual harassment lawsuit filed by the Equal Employment Opportunity Commission.
Hearth Management, a PPP recipient that manages assisted living facilities in four states, paid a total of $383,000 in wage theft penalties at several locations. At a facility in Tennessee, Labor reported the company made deductions from timecards for meal breaks even when employees worked through those breaks and it failed to include on-call and other non-discretionary supplements when calculating overtime rates.
Other PPP recipients with substantial wage theft penalties include the publisher O’Reilly Media, the electronics company Sierra Circuits, the restaurant chain Legal Sea Foods and Erie County Medical Center in Buffalo, N.Y., which also has been penalized for overbilling Medicaid.
Apart from the PPP money, the Erie County Medical Center has received more than $75 million in grants and loans from other federal programs related to COVID relief.
We will undoubtedly find many more companies with similar track records as we analyze the other hundreds of thousands of PPP recipients.
Not Illegal to Apply
It was not illegal for employers with a history of wage theft penalties to apply for and receive PPP assistance, yet the presence of these companies in the recipient list points to dual risks.
First, there is the possibility that these firms will cook the books when it comes to reporting on their use of PPP funds and submitting their requests to have the loans forgiven.
Second, these firms may feel that the current economic crisis will give them cover for returning to their old practices of wage theft. At a time of massive unemployment, these firms may assume that workers will not dare to complain about being shortchanged.
For these reasons, PPP employers with a history of wage theft penalties should be subject to additional scrutiny both by the Wage and Hour Division and the Small Business Administration.
Paycheck protection must mean not only the preservation of jobs but also the defense of fair labor standards.
The Trump administration’s reluctant disclosure of the names of more than 600,000 recipients of Paycheck Protection Program aid has shown that many of the loans went to firms that are well-connected.
The companies don’t fit the image of mom-and-pop businesses we were led to believe would be the main beneficiaries.
There is another problem: Many of the recipients previously engaged in behavior that amounts to paycheck endangerment. They failed to comply with minimum wage and/or overtime requirements and thus paid their workers less than what they were owed. In other words, they engaged in wage theft.
This comes from an analysis of data my colleagues and I have collected for the COVID Stimulus Watch and Violation Tracker databases. That includes the big PPP dataset and information on penalties imposed by the Labor Department’s Wage and Hour Division, one of the many agencies whose enforcement data can be found in Violation Tracker.
We are in the process of determining which PPP recipients are on the list of wage and hour violators, so we can highlight that in COVID Stimulus Watch along with other corporate accountability data.
88 Firms Spotted so Far
As a first step, I looked at the 4,800 companies identified as receiving the largest PPP loans–$5 million to $10 million. So far, I have found 88 of those recipients that paid wage theft penalties since 2010. Their penalties averaged about $100,000—which is roughly double the amount paid in back pay and fines in a typical wage and hour case.
The largest wage theft penalty I’ve found for a PPP recipient is the $1.9 million paid by Hutco Inc., a marine and shipyard staffing agency based in Louisiana. In announcing the penalty, Labor said the company had utilized improper pay and record-keeping practices, resulting in “systemic overtime violations” affecting more than 2,000 workers.
PPP recipient National Food Corp., a major egg producer, paid $435,000 in penalties for wage and hour violations at its operations in Washington State. The company also paid $650,000 to settle a sexual harassment lawsuit filed by the Equal Employment Opportunity Commission.
Hearth Management, a PPP recipient that manages assisted living facilities in four states, paid a total of $383,000 in wage theft penalties at several locations. At a facility in Tennessee, Labor reported the company made deductions from timecards for meal breaks even when employees worked through those breaks and it failed to include on-call and other non-discretionary supplements when calculating overtime rates.
Other PPP recipients with substantial wage theft penalties include the publisher O’Reilly Media, the electronics company Sierra Circuits, the restaurant chain Legal Sea Foods and Erie County Medical Center in Buffalo, N.Y., which also has been penalized for overbilling Medicaid.
Apart from the PPP money, the Erie County Medical Center has received more than $75 million in grants and loans from other federal programs related to COVID relief.
We will undoubtedly find many more companies with similar track records as we analyze the other hundreds of thousands of PPP recipients.
Not Illegal to Apply
It was not illegal for employers with a history of wage theft penalties to apply for and receive PPP assistance, yet the presence of these companies in the recipient list points to dual risks.
First, there is the possibility that these firms will cook the books when it comes to reporting on their use of PPP funds and submitting their requests to have the loans forgiven.
Second, these firms may feel that the current economic crisis will give them cover for returning to their old practices of wage theft. At a time of massive unemployment, these firms may assume that workers will not dare to complain about being shortchanged.
For these reasons, PPP employers with a history of wage theft penalties should be subject to additional scrutiny both by the Wage and Hour Division and the Small Business Administration.
Paycheck protection must mean not only the preservation of jobs but also the defense of fair labor standards.
ROBBING THE TAXPAYER, AGAIN!!!
‘Absolute robbery’: Gilead announces $3,120 price tag for COVID-19 drug developed with $70 million in taxpayer funds
June 30, 2020
By Common Dreams - RAW STORY
Consumer advocates reacted with disgust Monday to an announcement by Gilead Sciences that it will charge U.S. hospitals around $3,120 per privately insured patient for a treatment course of remdesivir, a drug which has proven modestly effective at speeding Covid-19 recovery times.
Peter Maybarduk, director of Public Citizen’s Access to Medicines Program, called Gilead’s pricing—which works out to around $520 per dose for non-government buyers like hospitals—”an offensive display of hubris and disregard for the public” and slammed the Trump administration for failing to ensure that the price of a drug developed with substantial taxpayer support is affordable for all.
Maybarduk pointed to Institute for Clinical and Economic Review research showing Gilead could still make a profit by pricing remdesivir at $310 per course.
“Gilead has priced at several thousand dollars a drug that should be in the public domain. For $1 per day, remdesivir can be manufactured at scale with a reasonable profit,” Maybarduk said in a statement. “Gilead did not make remdesivir alone. Public funding was indispensable at each stage, and government scientists led the early drug discovery team. Allowing Gilead to set the terms during a pandemic represents a colossal failure of leadership by the Trump administration.”
Public Citizen estimated in a May report that U.S. taxpayers contributed at least $70.5 million to the development of remdesivir.
Shortly after Gilead’s announcement, the U.S. Health and Human Services Department said it reached an agreement with the pharmaceutical giant to purchase more than 500,000 treatment courses of remdesivir for American hospitals.
The Wall Street Journal reported that the United States is “the only developed country where Gilead will charge two prices”—one for government buyers ($390 per dose) and one for non-government buyers like hospitals ($520 per dose). The typical remdesivir treatment course consists of around six doses.
Unlike the U.S., the Journal notes, the governments of other advanced nations “negotiate drug prices directly with drugmakers.”
Rep. Lloyd Doggett (D-Texas), chair of the House Ways and Means Health Subcommittee, said in a statement that “Trump’s refusal to stop pandemic profiteering with a stroke of a pen is a green light to other manufacturers to exploit this tragedy.”
Doggett said he is pressuring the Trump administration and Gilead to disclose the details of their agreement, including the sum the government paid for the 500,000 treatment courses of remdesivir.
On Twitter, Sen. Bernie Sanders (I-Vt.) condemned Gilead’s price-tag as “beyond disgusting.”
“Taxpayers provided funding for the development of this drug. Now Gilead is price-gouging off it during a pandemic,” said Sanders. “Coronavirus treatment must be free to all.”
Peter Maybarduk, director of Public Citizen’s Access to Medicines Program, called Gilead’s pricing—which works out to around $520 per dose for non-government buyers like hospitals—”an offensive display of hubris and disregard for the public” and slammed the Trump administration for failing to ensure that the price of a drug developed with substantial taxpayer support is affordable for all.
Maybarduk pointed to Institute for Clinical and Economic Review research showing Gilead could still make a profit by pricing remdesivir at $310 per course.
“Gilead has priced at several thousand dollars a drug that should be in the public domain. For $1 per day, remdesivir can be manufactured at scale with a reasonable profit,” Maybarduk said in a statement. “Gilead did not make remdesivir alone. Public funding was indispensable at each stage, and government scientists led the early drug discovery team. Allowing Gilead to set the terms during a pandemic represents a colossal failure of leadership by the Trump administration.”
Public Citizen estimated in a May report that U.S. taxpayers contributed at least $70.5 million to the development of remdesivir.
Shortly after Gilead’s announcement, the U.S. Health and Human Services Department said it reached an agreement with the pharmaceutical giant to purchase more than 500,000 treatment courses of remdesivir for American hospitals.
The Wall Street Journal reported that the United States is “the only developed country where Gilead will charge two prices”—one for government buyers ($390 per dose) and one for non-government buyers like hospitals ($520 per dose). The typical remdesivir treatment course consists of around six doses.
Unlike the U.S., the Journal notes, the governments of other advanced nations “negotiate drug prices directly with drugmakers.”
Rep. Lloyd Doggett (D-Texas), chair of the House Ways and Means Health Subcommittee, said in a statement that “Trump’s refusal to stop pandemic profiteering with a stroke of a pen is a green light to other manufacturers to exploit this tragedy.”
Doggett said he is pressuring the Trump administration and Gilead to disclose the details of their agreement, including the sum the government paid for the 500,000 treatment courses of remdesivir.
On Twitter, Sen. Bernie Sanders (I-Vt.) condemned Gilead’s price-tag as “beyond disgusting.”
“Taxpayers provided funding for the development of this drug. Now Gilead is price-gouging off it during a pandemic,” said Sanders. “Coronavirus treatment must be free to all.”
EPA Gives Farmers Another Month To Use Widely Banned Poison
A Court Threw Out the Agency’s Approval of Deadly Dicamba Herbicide, But the Maker Is Pushing for Another Year of Use
By Sarah Okeson - dc report
6/28/2020
Bayer, the giant German chemical company, has agreed to pay up to $400 million to U.S. farmers whose crops have been damaged by the deadly herbicide dicamba.
The poison is still being used on genetically modified crops until July 31, despite a court order that threw out the Trump EPA approval.
The claims that Bayer will pay are for 2015 through this year or for lawsuits filed in federal court in the eastern district of Missouri. Bayer plans to try to get XtendiMax, its dicamba spray, approved for the 2021 growing season.
The settlement does not include a case in Missouri where a jury awarded the owner of a peach orchard $250 million in punitive damages and $15 million in compensation from Monsanto, which was bought by Bayer, and BASF, another maker of dicamba. Bayer is contesting that verdict.
The EPA “is recklessly allowing ongoing in-season use of a pesticide it knows has already harmed millions of acres of farmland,” said Stephanie Parent, an attorney for the Center for Biological Diversity.
After the decision from the 9th Circuit Court of Appeals, EPA Administrator Andrew Wheeler ordered dicamba that already had been sold could be used until July 31. He called it “a mistake” to issue restrictions on existing supplies of the herbicide unless companies or people who owned the herbicide were notified of the restrictions and are likely to comply with them.
Dicamba tricks weeds into growing so fast they die. Dicamba can damage soybeans that aren’t genetically modified to resist it at concentrations as low as one billionth of a gram per cubic meter. It also damages or kills fruit trees, grapes, beans, peas, potatoes, tobacco, flowersand ornamental plants.
Obama-Era Approval
Under Obama, the EPA approved new dicamba sprays for use on genetically modified soybeans and cotton without independent testing of how prone the herbicide was to drift to damage other fields.
The Trump EPA approved those sprays for two more years in 2018 with additional restrictions, concluding that dicamba “will not cause unreasonable adverse effects on the environment.” The acting chief of the EPA’s herbicide branch, Reuben Baris, later went to work for Corteva, which used to be the agricultural unit of DowDuPont and also makes dicamba.
Understated Risks
Judge William Fletcher and two other federal judges in early June threw out the 2018 approval. Fletcher wrote the EPA substantially understated the risks to plants that hadn’t been modified genetically to resist harm from dicamba and entirely failed to acknowledge other risks.
Monsanto, which was bought by Bayer in 2018, received hundreds of telephone calls about drifting dicamba during the 2017 and 2018 growing seasons. Monsanto evaluated 450 of the calls and concluded its dicamba spray was never, or almost never, at fault. The company identified only eight incidents, or less than 1%, where volatility even possibly could have been the cause.
The EPA said the “agency does not know the extent of the damage to sensitive crops.”
The EPA increased restrictions on spraying in the 2018 decision to try to limit the damage. The 40 pages of restrictions prohibited spraying if the wind was less than 3 mph or more than 10 mph and permitted application only between one hour after sunrise and two hours before sunset.
The poison is still being used on genetically modified crops until July 31, despite a court order that threw out the Trump EPA approval.
The claims that Bayer will pay are for 2015 through this year or for lawsuits filed in federal court in the eastern district of Missouri. Bayer plans to try to get XtendiMax, its dicamba spray, approved for the 2021 growing season.
The settlement does not include a case in Missouri where a jury awarded the owner of a peach orchard $250 million in punitive damages and $15 million in compensation from Monsanto, which was bought by Bayer, and BASF, another maker of dicamba. Bayer is contesting that verdict.
The EPA “is recklessly allowing ongoing in-season use of a pesticide it knows has already harmed millions of acres of farmland,” said Stephanie Parent, an attorney for the Center for Biological Diversity.
After the decision from the 9th Circuit Court of Appeals, EPA Administrator Andrew Wheeler ordered dicamba that already had been sold could be used until July 31. He called it “a mistake” to issue restrictions on existing supplies of the herbicide unless companies or people who owned the herbicide were notified of the restrictions and are likely to comply with them.
Dicamba tricks weeds into growing so fast they die. Dicamba can damage soybeans that aren’t genetically modified to resist it at concentrations as low as one billionth of a gram per cubic meter. It also damages or kills fruit trees, grapes, beans, peas, potatoes, tobacco, flowersand ornamental plants.
Obama-Era Approval
Under Obama, the EPA approved new dicamba sprays for use on genetically modified soybeans and cotton without independent testing of how prone the herbicide was to drift to damage other fields.
The Trump EPA approved those sprays for two more years in 2018 with additional restrictions, concluding that dicamba “will not cause unreasonable adverse effects on the environment.” The acting chief of the EPA’s herbicide branch, Reuben Baris, later went to work for Corteva, which used to be the agricultural unit of DowDuPont and also makes dicamba.
Understated Risks
Judge William Fletcher and two other federal judges in early June threw out the 2018 approval. Fletcher wrote the EPA substantially understated the risks to plants that hadn’t been modified genetically to resist harm from dicamba and entirely failed to acknowledge other risks.
Monsanto, which was bought by Bayer in 2018, received hundreds of telephone calls about drifting dicamba during the 2017 and 2018 growing seasons. Monsanto evaluated 450 of the calls and concluded its dicamba spray was never, or almost never, at fault. The company identified only eight incidents, or less than 1%, where volatility even possibly could have been the cause.
The EPA said the “agency does not know the extent of the damage to sensitive crops.”
The EPA increased restrictions on spraying in the 2018 decision to try to limit the damage. The 40 pages of restrictions prohibited spraying if the wind was less than 3 mph or more than 10 mph and permitted application only between one hour after sunrise and two hours before sunset.
funnies
