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Broken Business

Giant Corporations, Giant Failures

July 4th 2014

Click to select Image

General Motors recently released the report it commissioned from the huge Jenner & Block law firm. The latter's chairman, Anton Valukas, investigated how and why GM failed - for over 10 years - to recall cars it produced while knowing they had defective ignition switches. The eventual recall of 2.6 million Chevrolet Cobalt cars in February, 2014, followed 13 deaths GM linked to those defective switches (many others were injured, and government officials believe there were more fatalities).

GM's chief executive, Mary Barra, admitted publicly this April what Valukas wrote in his report: GM failed systematically to identify, take responsibility for, and act properly in the face of life-threatening defects in millions of automobiles it sold since 2002. On June 16, 2014, GM recalled an additional 3.16 million defective vehicles across seven of its models. GM's total recalls in North America so far this year exceed 20 million vehicles.

Read more ..

America on Edge

"Boys Will Be Boys" Seems to be America's Campus Rape Policy

July 4th 2014

Woman

Before one even begins to discuss the root causes of rape-- the personal motivations, the sociocultural beliefs and practices that may attribute to the act; one has to realize and acknowledge that rape is a brutal act of violence. Rape, which can be defined as, penetration no matter how slight, of the vagina or anus with any body part or object, or oral penetration by a sex organ of another person, without consent of the victim (Per the FBI's Uniform Crime Reporting Program), can affect victims for many years after initial contact, and after any physical wounds have healed. Many rape victims subsequently have to cope with a form of post-traumatic stress disorder referred to as post traumatic rape syndrome; and the hallmark of this disorder is that it is psychological reaction to being exposed to an event (a brutal act of sexual violence) which is outside the range of normal human experience. The assault and trauma impacts the brain in such a way that it often leave victim's with impaired verbal skills, short term memory loss, memory fragmentation, and delayed recall, which exemplifies why rape victims have a great difficulty functioning and responding to a line of questioning in a courtroom setting. The following symptoms are often present in Rape Trauma Syndrome: Read more ..

Inside Washington

Saving Pennies Makes Cents for Zinc-backed Front Group

July 3rd 2014

Money Jar

Americans for Common Cents was created in 1990 to “inform and educate policymakers, consumers, and the media about the penny’s economic, cultural and historical significance.”

Members sought to rally support behind the penny in response to those who would prefer that it be done away with. Its “executive director,” Mark Weller, spoke before the House Financial Services Subcommittee on Domestic Monetary Policy and Technology in 2012.

He described the group as “broad-based and comprised of, and endorsed by, many of the nation’s leading coin and numismatic organizations, charitable organizations … and companies involved in the manufacturing and transport of the penny.” Read more ..


Broken Justice

Supreme Court Justices Earn Big Money On the Side

June 21st 2014

Supreme Court

Between legalizing gay marriage and sparring over campaign finance limits, the U.S. Supreme Court kept busy — and made money — outside the marbled halls of One First Street last year.

All but one of the nine high court justices earned teaching income or book royalties in 2013, hauling in a quarter of a million dollars for their work shaping young legal minds in the classroom or through the written word.

Top earner Justice Antonin Scalia raked in more than $100,000 in book royalties for his 2012 tome "Reading Law: Interpretation of Legal Texts" and teaching wages from Southern Methodist University, Duke University, Tufts University and Pennsylvania State University, according to new financial disclosure reports just released . Read more ..


Broken Healthcare

Why Medicare Advantage Costs Taxpayers Billions More than it Should

June 8th 2014

Medical bag

In South Florida, one of the nation’s top privately-run Medicare insurance plans faces a federal investigation into allegations that it overbilled the government by exaggerating how sick some of its patients were.

In the Las Vegas area, private health care plans for seniors ran up more than $100 million in added Medicare charges after asserting patients they signed up also were much sicker than normal — a claim many experts have challenged. In Rochester, New York, a Medicare plan was paid $41 million to treat people with serious diseases — even though the plan couldn’t prove the patients in fact had those diseases.

These health plans and hundreds of others are part of Medicare Advantage, a program created by Congress in 2003 to help stabilize health care spending on the elderly. But the plans have sharply driven up costs in many parts of the United States — larding on tens of billions of dollars in overcharges and other suspect billings based in part on inflated assessments of how sick patients are, an investigation by the Center for Public Integrity has found.

Read more ..

Broken Campaign Financing

Who is Bankrolling Secretive Liberal Group America Votes?

May 26th 2014

Money Bands=Happiness

Even as top Democrats denounce Charles and David Koch’s political “dark money” organizations, party operatives have built a secretive nonprofit network of their own — albeit a much smaller one — to advance liberal policies and win votes. America Votes, which seeks to build “a permanent advocacy and campaign infrastructure” to “promote progressive issues,” raised $12.7 million during its most recent fiscal year, according to new tax documents reviewed by the Center for Public Integrity.

The sources of America Votes’ funding are not clear.

“We do not disclose that information to the public,” said America Votes spokeswoman Liz Accola, adding that her group was “in full compliance” with the law. The new tax records show that a dozen anonymous donors provided the lion’s share of the budget for America Votes during its most recent fiscal year, with each giving between $300,000 and $1.1 million. Together, these 12 donors accounted for 60 percent of the group’s funds.

Read more ..

Broken Education

U.S. Pours Millions Into Failing Black Colleges, Breaks New Student Loan Rules

May 15th 2014

Ben Franklin one hundred dollar bills

The federal government violates its own student loan rules and wastes hundreds of millions of dollars to subsidize perpetually failing black colleges, an investigation has found.

The institutions are known as Historically Black Colleges and Universities (HBCU) and JW’s probe has uncovered documents that show American taxpayers are being forced to fund them even when their accreditation has been stripped, they have dismal graduation rates and rank among the nation’s worst medical schools. For instance, Meharry Medical College (where the late Jackson’s physician, Conrad Murray, got his degree) is renowned for producing an alarming number of inept doctors along with third-world institutions like Manila Central University in the Philippines and the Autonomous University of Guadalajara in Mexico, according to records obtained by JW.

Read more ..

Broken Politics

U.S. Chamber Targets Dems in State Attorney General Races

May 11th 2014

Money Bands=Happiness

The ads accuse Nevada Secretary of State Ross Miller, a candidate for state attorney general, of living a lavish lifestyle at the taxpayers’ expense.

Shots of Miller with Mike Tyson and Hugh Hefner’s former girlfriend flash across the screen as the narrator highlights more than $60,000 in gifts Miller has accepted from “special interests” since taking office in 2006. “He lives the life,” the narrator says. “You pay the tab.”

The $500,000 ad campaign is being paid for by a nonprofit from Virginia called the State Government Leadership Foundation. It’s an impressive sum, especially considering the ads ran three months before a primary in which Miller is running unopposed, and for an office that doesn’t normally get so much attention.

Miller’s campaign called on TV stations to pull the ads, challenging them as misleading.

So why is so much money being poured into the race and who is behind it? The biggest underwriter of the group behind the ad is the U.S. Chamber of Commerce and the affiliated Institute for Legal Reform, according to a Center for Public Integrity investigation.

The Chamber isn’t talking, but it’s not hard to figure out why state attorney general races are getting so much of its attention, not just in Nevada, but across the country.

First, the joke is that “AG” stands for “almost governor” in the 43 states where they are elected, as many go on to higher elected office. Spending on these races is an investment in the future. Eight current governors and eight current U.S. senators were previously state attorneys general. Read more ..


The Edge of Justice

Juvenile Injustice: Truants Face Courts, Jailing Without Legal Counsel

May 11th 2014

Kids Jail

She was barely 15 and scared at the prospect of being in court. She agreed to plead guilty to truancy. But when Judge Tim Irwin announced what he planned to do with her, the girl known as A.G. screamed in disbelief.

Guards forced the sobbing teen out of the Knox County Juvenile Court and clapped shackles on her legs. She had been struggling with crippling anxiety and what she said was relentless bullying at school. Now she was being led through a county juvenile detention center to a cell with a sliver of a window and a concrete slab with a mattress. For truancy.

“I cried all night long,” A.G. said. “It seemed like everyone was against us in court.”

Like tens of thousands of kids every year, A.G. was in court to answer for a non-criminal infraction that only a minor can commit. These infractions are called “status offenses,” and they can include skipping school, running away, underage drinking or smoking or violating curfews. But since status offenses aren’t technically crimes, indigent minors don’t benefit from the constitutional right to the appointment of defense counsel before they plead guilty. Read more ..


Broken Economy

Casinos and Offshore Companies Battle for Billions in Online Gambling

April 16th 2014

Roulette Wheel

Ever since Bugsy Siegel opened the Flamingo Hotel in 1946 and launched the Las Vegas Strip, gambling has held a tenuous position in American life, suggesting glamour, wealth, depravity and corruption all at once. Now that casinos have spread throughout the nation and allegedly shed their mafia ties, a new branch of the industry is fighting for legitimacy here.

Las Vegas-based casinos and overseas operators have begun an all-out battle over Internet gambling, which is mostly banned nationwide but carries with it the promise of billions of dollars in additional revenue for casinos and state governments. Three states began licensing online betting last year, and lawmakers are debating online gambling bills in seven others right now. In Washington, meanwhile, Congress is facing increasing pressure to either bar or regulate the fledgling industry federally.

The moves are coming in response to a concerted push orchestrated by a colorful cast of characters, including one of the most prolific political donors of the Super PAC era, an offshore company that only recently settled federal allegations of money laundering and bank fraud and a pair of benignly named groups backed by millions of dollars in casino cash. Read more ..


Oil Addiction

Report Offers Grim Predictions For South Texas Air Quality Amid Eagle Ford Oil Boom

April 14th 2014

Oil Barrels

What might the oil- and gas-rich Eagle Ford Shale region of South Texas look like in 2018?

A newly released but largely unnoticed study commissioned by the state of Texas makes some striking projections:

***The number of wells drilled in the 20,000-square-mile region could quadruple, from about 8,000 today to 32,000.
***Oil production could leap from 363 million barrels per year to as much as 761 million.
***Airborne releases of volatile organic compounds (VOCs) could increase 281 percent during the peak ozone season compared to 2012 emissions. VOCs, commonly found at oil and gas production sites, can cause respiratory and neurological problems. Some, like benzene, can cause cancer.
***Nitrogen oxides — which react with VOCs in sunlight to create ground-level ozone, the main component of smog — could increase 69 percent during the peak ozone season. Read more ..


Defense on Edge

Air Force Seeks Less Perfection In Its Nuclear Missile Corps

April 14th 2014

Nuclear Missile in Silo

Every day, 90 uniformed men and women in their mid-twenties ride elevators forty to sixty feet below remote fields in Montana, Wyoming, Colorado, North Dakota, and Nebraska in rote preparation for improbable nuclear Armageddon.

They spend some of their 24-hour alerts seated in front of steel Minuteman III missile launch control panels mounted on shock-absorbers, with toggle switches capable of hurling ten to fifty nuclear warheads — each with twenty times the explosive force of the Hiroshima bomb — to the other side of the globe, at speeds of 15,000 mph.

But their day-to-day enemy, for decades, has not so much been another superpower, but the unremitting boredom of an isolated posting that demands extreme vigilance, while also requiring virtually no activity, according to accounts by missileers and a new internal review of their work. Read more ..


The Digital Edge

A Battle Royal Emerges in Congress over Internet Gambling

April 13th 2014

Click to select Image

Ever since Bugsy Siegel opened the Flamingo Hotel in 1946 and launched the Las Vegas Strip, gambling has held a tenuous position in American life, suggesting glamour, wealth, depravity and corruption all at once. Now that casinos have spread throughout the nation and allegedly shed their mafia ties, a new branch of the industry is fighting for legitimacy here.

Las Vegas-based casinos and overseas operators have begun an all-out battle over Internet gambling, which is mostly banned nationwide but carries with it the promise of billions of dollars in additional revenue for casinos and state governments. Three states began licensing online betting last year, and lawmakers are debating online gambling bills in seven others right now. In Washington, meanwhile, Congress is facing increasing pressure to either bar or regulate the fledgling industry federally. Read more ..


The Digital Edge

Battle for the Airwaves

March 23rd 2014

Smart phone

The setting was ornate, the subject esoteric, but the implications huge.

The crowd that filed last month into the wood-paneled room 226 in the Dirksen Senate Office Building included lawmakers, lobbyists, company executives, and a few mystery guests — a roster that reflected the enormity of the issue at hand: nothing less than control of the growing wireless market and the hundreds of billions of dollars that go with it.

Verizon Communications Inc. and T-Mobile USA Inc. were out in force, as were some of the most powerful lobbyists in Washington, D.C.  Along with those household names was the little-known but  quietly influential Jonathan Spalter.

The chairman of Mobile Future, a Washington, D.C.-based nonprofit group, sat at the witness table along with the big wireless carriers and well-known consumer advocates to tell senators how the government should auction valuable airwaves that the telecommunications companies say they need to keep up with the exploding use of smartphones and tablet computers.

Read more ..

Broken Banking

Kleptocrats Hiding Money in US Warned 'We Will Find You'

March 22nd 2014

Money Bands=Happiness

On March 5, the US Department of Justice unsealed a complaint alleging a brazen pattern of high level corruption. A former president had manufactured phony national security expenses and directed his associates to stuff cash from the Central Bank into bags and boxes, which was then spirited through offshore companies in the British Virgin Islands into accounts in the world’s leading banks in New York and London.

The total amount looted through this scheme and other official acts, alleged the Justice Department, was more than half a billion dollars. What made the announcement even more unusual than the vast sums of money involved was its target. The former president whose family’s assets were frozen was not an American, but the late Nigerian dictator Sani Abacha. The roughly half billion dollars being held was a record haul for the recently established Justice Department unit prosecuting his case: the Kleptocracy Asset Recovery Initiative. Read more ..


Broken Government

Washington Rocked by Thousands of Faked Security Clearance Reviews

January 24th 2014

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

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

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

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


The Edge of Climate Change

"Dark Money" Funds Climate Change Denial Effort

December 29th 2013

Money Stack

The largest, most-consistent money fueling the climate denial movement are a number of well-funded conservative foundations built with so-called "dark money," or concealed donations, according to an analysis released Friday afternoon.

The study, by Drexel University environmental sociologist Robert Brulle, is the first academic effort to probe the organizational underpinnings and funding behind the climate denial movement.

It found that the amount of money flowing through third-party, pass-through foundations like DonorsTrust and Donors Capital, whose funding cannot be traced, has risen dramatically over the past five years.

In all, 140 foundations funneled $558 million to almost 100 climate denial organizations from 2003 to 2010. Meanwhile the traceable cash flow from more traditional sources, such as Koch Industries and ExxonMobil, has disappeared. Read more ..


The Weapon's Edge

Obama Administration Understated America's Nuclear Costs

December 24th 2013

Nuclear Missile in Silo

The Obama administration's plan for maintaining and upgrading the U.S. nuclear arsenal will likely cost around 66 percent more over the next decade than senior Pentagon officials have predicted, according to a new assessment by the independent Congressional Budget Office.

Under the administration’s plan, operating, maintaining and upgrading the nuclear stockpile will cost a total of $355 billion from 2014 through 2023, said the CBO report, published just before the holidays and shortly after Congress finished action on a 2014 budget bill that restored some planned Pentagon spending cuts.

James Miller, the Pentagon’s outgoing policy chief, had said in 2011 congressional testimony that the 10-year tab would be around $214 billion, or an average of $21 billion a year, an amount he pegged at around 3 percent of the Pentagon’s likely overall budget for that period.

Read more ..

Broken Government

Credit Union Watchdog is Already Tight with Credit Unions

December 11th 2013

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Minutes after Rick Metsger took the oath of office to become the newest overseer of the nation’s credit union industry, he walked a few blocks up the street to break bread with executives and lobbyists for the firms he now regulates.

The luncheon in his honor was held at an elegant, $4 million Capitol Hill party and meeting space called Credit Union House. It drew a tightknit group of business leaders, advocates, and regulators — the most powerful people in a financial industry that holds more than $1 trillion but that most Americans know little about.

Metsger, whose ascent they had gathered to toast, was one of their own, a fellow-true believer in credit unions who would now police the industry full-time as one of three board members of the National Credit Union Administration. Read more ..


Financing the Flames

Confronting the New Israel Fund

November 23rd 2013

Edwin Black

At a time of ceaseless budget crises, it may astound many that American taxpayers are deploying their precious dollars not to pay for peace in Israel, but to achieve the exact opposite: confrontation.

Each year, American aid, taxpayer subsidies of 501(c)(3) organizations, and other financial programs richly support political confrontation between Palestinians and Israelis, vocal critics say. Tax experts estimate that for every one million dollars in donations received by a 501(c)(3), US taxpayers must subsidize approximately $440,000.

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Tax-exempt charitable organizations are supposed to be just that: charitable. But prominent Israeli critics claim that highly politicized American charitable organizations, including several operated by some of America’s most prominent Jewish personalities, are actually working hard to destabilize the Israel Defense Forces and erase Israel’s identity as a Jewish State. Rather than engaging in charitable programs, outspoken critics say, these charitable groups are focused on massive political lobbying and fomenting internal political upheaval that make peace between Arab and Jew seemingly impossible. Not a few of these critics point to the prestigious New Israel Fund (NIF) as the chief culprit.

NIF grants steer millions of US dollars to scores of confrontation-oriented Israeli NGOs. Among the controversial NGOs is one called B’Tselem, which circulates video cameras to Arab villages that are hotbeds for confrontation. Israeli military officials assure that they rely upon B'Tselem’s help to document IDF infractions. But many critics in the ranks charge the cameras are calculated to capture the scene after soldiers are taunted into finally reacting.

One such critic is Colonel Benny Yanay, who represents Consensus, an organization of several hundred IDF officers. "The New Israel Fund,” insists Yanay, “acts against Israel—against the soldiers of our country. It is important to me that people recognize the New Israel Fund for what it is. It is supported by foreign governments and organizations so that Israeli soldiers will be weakened." Yanay adds, "Their budget is more than anything we have—so it is not a fair fight. We are not a political organization. They are political." Read more ..


Financing The Flames

Financing Mideast Flames with Terrorist Salaries

November 17th 2013

Financing the Flames

Evyatar Borovsky, age thirty-one, was devoted to helping people across Israel—people of any background. His way was psychodrama and other role-playing techniques calculated to coax victims, especially children, out of their traumatic fog. Often the children were survivors of terrorism. Evyatar was part of a so-called therapeutic theatrical troupe. On April 30, 2013, Evyatar went to Tapuach Junction to catch a ride.

Salam Zaghal came from an impoverished Arab family in Shuka, a village near Tulkarm. Once, Salam tried to plant a bomb. That landed him in an Israeli prison for more than three years. When Salam was released earlier this year, he had no job and no economic prospects. His family lived on the edge. Money was scarce. As Salam became more disconsolate, his brother Abdulfattah remembered that his brother increasingly began "talking more and more about the martyrdom of the prisoners in Israeli jails."

April 30, 2013, shortly after dawn, Zaghal jumped onto a bus for the long drive to Tapuach Junction. He carried a blue plastic bag. Two items were secreted inside the bag. Zaghal asked to be dropped about sixty meters down the way from the intersection. When he stepped off the bus, he lit a cigarette. Then Zaghal texted his brother Abdulfattah. "My dear brother, take care of dad, mom and my sister, and keep your head up." Zaghal sent a second text to his family: "Forgive me in life, in death, and in the end of days." Then he broke his phone so no one could call back and dissuade him.
At 8:15 a.m., Evyatar was standing about, looking somewhere over there, oblivious to the nearby Arab hitchhikers congregated about. Zaghal approached, carrying his blue plastic bag, which contained a piece of paper—a prosecution notice from a previous run-in with Israeli security, and a kitchen knife almost eight inches long.

Suddenly, Zaghal screamed, "Allahu Akbar!" and "There is no God but Allah and Muhammad is his messenger." Zaghal plunged the metal blade directly into Evyatar’s stomach and then again deep into his chest. A moment later, the medical clown lay on the ground, his life leaking quickly onto the asphalt. Salam then grabbed Evyatar’s gun, but before he could inflict more carnage, nearby Border Guards shot him. The killer was not shot in the head or upper body, but in the leg. In an instant, Evyatar—the clown with the big heart—was gone, stabbed to death. As for Salam, he was rushed to an Israeli hospital with a non-life-threatening leg wound. There, Salam received Israel’s world-renowned medical attention. Read more ..


Broken Government

Koch-backed Nonprofit Spent Record Cash in 2012

November 16th 2013

Money Bands=Happiness

Americans for Prosperity — the main political arm of billionaire industrialist brothers Charles and David Koch — spent a staggering $122 million last year as it unsuccessfully attempted to defeat President Barack Obama and congressional Democrats, according to a Center for Public Integrity review of documents filed in Colorado.

That's more than the total amount the group had previously spent from its formation in 2004 through 2011. During its previous eight years of existence, Americans for Prosperity spent a combined $72 million, a review of Internal Revenue Service records indicates.

The group’s unprecedented spending in 2012 is a fivefold increase over 2010, a year when a surge of conservative voters helped Republicans regain control of the U.S. House of Representatives. And it represents a more than 1,600 percent increase above the $7 million it spent in 2008, when voters first elected Obama to the White House.

Read more ..

Financing the Flames

Financing the Flames from a Mobile Home in Florida

November 4th 2013

Financing the Flames

A regular feature of West Bank confrontation between Israeli soldiers and Palestinians seems to be a corps of intrepid young women that villagers call “internationals.” They specialize in upfront and personal, in-your-face, and often nose-to-nose verbal taunting hoping to provoke a reaction that video cameras can record. If and when soldiers finally do react, these incidents are then uploaded to the Internet to prove “the brutality of the IDF.” These “internationals” often seem to appear out of nowhere at a village flashpoint. Just as suddenly, they melt into the background.

Using false names and seemingly untrackable movements, the skilled and stealthy internationals have managed to inspire and encourage videographed confrontation far beyond their numbers. Who are they? What is the font of their financial wherewithal? Who is financing these flames?

Searching for answers, one night in early May 2013, I traveled to the tiny West Bank town of Deir Itsiya where the internationals quietly maintain a base of operations. The women are known to many in that local Arab community, where they are provided logistical assistance and deferential hospitality. They receive many European guests. When I asked my taxi driver, "Do you know where the house is?" he answered, "Yes, Sheik Haider (neighborhood)." He took me there.

At an elbow in a dusty road, I found their compound behind long, ornate iron fencing. I knocked on all the doors, the ones with knockers and the ones without. No answer. I called out for anyone who was home. A neighbor strolled by to remark. The driver translated: "He said the European girls are not sleeping in town tonight. But he knows how to reach them. I will take you where he said." Read more ..


Broken Politics

Mudslinging the New Normal in Judicial Elections

November 3rd 2013

judge's gavel

Out-of-state political organizations spent millions on mudslinging television ads in state supreme court elections in 2012, according to a new report, marking a new and worrisome trend, say some legal experts.

The report found that total spending in states where high court judges are elected reached $56 million in the 2012 election cycle with more than $24 million of it — 43 percent — coming from non-candidate organizations, many from out of state.

The report was released by the Brennan Center for Justice and Justice at Stake, groups that are highly critical of judicial elections. The conclusions were based on data from the National Institute on Money in State Politics and the Campaign Media Analysis Group.

A record $33.7 million was spent on television ads, much of which came from outside groups — including super PACs and nonprofits — attacking judicial candidates on the airwaves.

In Michigan, the Judicial Crisis Network spent between $600,000 and $1 million on a television ad equating incumbent Democratic justice Bridget McCormack’s previous legal work defending a detainee at Guantanamo Bay to volunteering to “help free a terrorist.”  Read more ..


The Defense Edge

Widespread Problems in Security System Used by Navy

September 25th 2013

File Folders

For years, hundreds of thousands of contractors seeking regular access to key Navy installations have merely paid a fee and typed identifying information into ATM-like machines installed on those bases. They were then able to gain temporary access without first going through a background check, even though Navy and White House regulations require such checks be completed beforehand.

Known as Rapidgate, the access control system is now in operation for contractors, vendors, service workers, and suppliers who regularly pass through not just Navy checkpoints — but also those at more than 150 military and government installations around the country, including the Washington Navy Yard, the site of the Sept. 16 shooting rampage.

Last week, an internal Pentagon report called into question how the Rapidgate system became so widely used by the Navy and urged its immediate cancellation at those sites, saying it provides a false sense of security that puts government personnel at risk. The Navy, it said, had contracted for the system through irregular acquisition practices. Read more ..


Afghanistan on Edge

Obama Administration Props Up Afghanistan's Health System Despite Waste and Fraud

September 7th 2013

Medical bag

The U.S. Agency for International Development is propping up Afghanistan’s national health care system with millions of dollars in direct assistance even though its effort lacks the sort of controls and oversight needed to prevent waste, fraud and abuse, according to the U.S. government’s chief auditor of financial assistance to the country.

The funds are being disbursed to Afghanistan’s Ministry of Public Health for doctor’s salaries, immunizations, prenatal care, hospitals, rural health care facilities and other urgent medical needs. They constitute a small but critical portion of the more than $90 billion Washington has pumped into the country since 2001, the lion’s share of which has gone to direct assistance for the Afghan military and police forces. Read more ..


The Edge of Health

World Bank Approves Loan To Sugar Plantation Amid Concerns About Kidney Disease

September 1st 2013

cane_worker

A mysterious kidney disease that is afflicting Central American agricultural workers has been raising growing alarms among governments, and in April the region’s health ministers jointly declared that the ailment was among their top public health priorities.

Yet only weeks after the health ministers issued their declaration, the World Bank approved a new loan to expand a sugar plantation in Nicaragua, renewing its support for an industry whose workers have been devastated by the disease. The $15 million loan to the Montelimar plantation in Nicaragua is estimated to create 1,300 new rural jobs, according to World Bank documents.

Over the last two years, the International Consortium of Investigative Journalists has examined how a rare type of chronic kidney disease (CKD) is killing thousands of agricultural workers along Central America’s Pacific Coast, as well as in Sri Lanka and India. Scientists have yet to definitively uncover the cause of the parallel epidemics, which have caused tens of thousands of deaths worldwide and are suspected to be linked to dehydration and toxic exposure.

ICIJ’s initial report, Island of the Widows, focused on a leading Nicaraguan sugar plantation that received substantial loans in 2006 from the World Bank’s private sector lending arm, the International Finance Corporation. Sick former workers from the plantation filed a complaint to the IFC’s ombudsman alleging that the loan violated the Bank’s guidelines by failing to consider the epidemic. The complaint resulted in a recently concluded study of the epidemic’s causes by a team from Boston University, which found that there was still not enough evidence to get to the bottom of the mystery.

Read more ..

Broken Government

Veterans Affairs, Defense Depts. Spend Billions in Effort to Coordinate Records

August 28th 2013

Paper Stack

The Department of Veterans Affairs and the Department of Defense spent at least $1.3 billion during the last four years trying unsuccessfully to develop a single electronic health-records system between the two departments — leaving veterans’ disability claims to continue piling up in paper files across the country, a News21 investigation shows.

This does not include billions of other dollars wasted during the last three decades, including $2 billion spent on a failed upgrade to the DOD’s existing electronic health-records system.

For a veteran in the disability claims process, these records are critical: They include DOD service and health records needed by the VA to decide veterans’ disability ratings and the compensation they will receive for their injuries. Stacks of paper files — including veterans’ evidence from DOD of their military service and injuries — sit at VA regional offices waiting to be processed instead of being readily accessible in electronic files. Read more ..


Broken Labor

OSHA Rule Targets Worker Exposure to Silica

August 24th 2013

Health and Human Services Washington D.C.

The Occupational Safety and Health Administration on Friday proposed a long-awaited rule to control worker exposures to silica, a toxic mineral that can cause the deadly lung disease silicosis, lung cancer and other ailments.

The rule could save nearly 700 lives and prevent 1,600 new cases of silicosis each year, OSHA chief David Michaels told reporters in a conference call. Tiny silica particles are unleashed through activities such as sandblasting, concrete-cutting and a form of oil and gas drilling called hydraulic fracturing, or fracking.

“This proposal is long overdue,” Michaels said. “OSHA’s current standards are dangerously out of date and do not adequately protect workers’ health.” The agency estimates that 2.2 million workers, most of them in construction, are exposed to silica in the United States. The rule will likely take “many months” to become final, Michaels said, with public hearings planned for March. Read more ..


Montenegro on Edge

Bankruptcy, Layoffs, And Lawsuits Plague Montenegrin Aluminum Plant

August 19th 2013

Euro Bills

The no-holds-barred conflict over a key piece of Montenegro's economy has just taken a billion-euro turn for the worse. That much became clear in a video press conference from Moscow for journalists in the Montenegrin capital, Podgorica.

Yury Moiseyev, the former director of the Podgorica Aluminum Plant (KAP), said the plant's Russian shareholder that he represents was preparing an enormous lawsuit against the Montenegrin government, seeking compensation for alleged unfulfilled promises and lost profits.

"The government of Montenegro did not give us the chance to realize our plans for developing the plant and we, of course, are applying to arbitration courts. We have hired several law firms," Moiseyev said.

"We at present have submitted a lawsuit [in Podgorica] for 93 million euros ($123 million) and we will be filing with [an arbitration court in] Frankfurt a complaint on the falsification during the privatization of KAP, of the lack of fulfillment of the civil agreement. So far, preliminarily, we set the sum of damages at 1 billion euros." Read more ..


Inside Politics

William Koch Emerges from Shadow of Famous Siblings

August 13th 2013

Bundles of Money

Billionaire businessman William Koch once operated green energy plants on multiple continents and had a reputation for being more politically moderate than his better-known brothers, Charles and David — the principal owners of Koch Industries, Inc..

But William now rejects the “apocalypse of global warming.” He says investing in alternative energy is “foolhardy.” And ahead of the 2012 election, he criticized President Barack Obama for trying to “socialize” the country.

Koch is putting his fortune where his mouth is and is also using his companies’ funds to do so. He has spent millions of dollars to aid politicians he sees as more business-friendly and to fight the Obama administration’s moves to combat climate change, which could mean costly new regulations for Koch’s expansive Oxbow Carbon LLC business network.

Unlike his brothers who have favored politically active nonprofits as their vehicles of choice to back conservative causes, William Koch has poured resources into super PACs, with millions of dollars coming straight from the corporate treasuries of his firms. Meanwhile, donations from his company’s traditional political action committee are at an all-time high — as are Oxbow’s lobbying expenditures. Read more ..


Broken Elections

Washington DC Groups Spent Big In Special Elections

July 18th 2013

Money Bands=Happiness

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

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

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


The Digital Edge

How Hackers Can Take Control of Your Car

July 12th 2013

car door

You might have seen that frightening episode of the CBS series, Person of Interest, in which a fictional social media company's billionaire founder loses control of his car. From the street, the driver appears to be either a total nutcase (well, in this case, he is) or heavily intoxicated. His car weaves through traffic left and right, crossing lanes willy-nilly and clipping other cars. But inside the car, the driver is helpless. Any control he tries, especially the brakes, is overridden, apparently by the car itself. Unbeknownst to the driver, of course, the car is under remote control.

Inevitably, the car blows up (creating an exciting visual). However, the software genius escapes in the nick of time.This, of course, is TV drama. It's fiction. A remotely compromised car is a scenario that makes a good thriller and scares the bejesus out of viewers. But possible in real life? No way.Well, wait a minute.Way. Read more ..


Inside Washington

Majority of Supreme Court Members Millionaires

June 17th 2013

Supreme Court

At least five and perhaps as many as eight of the nine members of the U.S. Supreme Court are millionaires according to recently released financial disclosures, and only two hold any consumer debt.

Assets on the forms are reported in a range making it impossible to say precisely how much each justice is worth, but suffice to say, none of them are hurting financially.

Ruth Bader Ginsburg boasts the highest potential net worth at $18.1 million with Stephen Breyer a close second at $17.1 million. Both were appointed by former President Bill Clinton.

However, Ginsburg’s actual net worth may be as low as $4.4 million and Breyer’s as low as $5 million. Federal officials are also exempt from disclosing the value of their homes, making an accurate calculation even more difficult. After collecting nearly $2 million in book advances, Justice Sonia Sotomayor's assets rose to between $1.7 and $10.3 million, ranking her No. 3 in terms of highest potential net worth. Sotomayor is an appointee of President Barack Obama. Read more ..


Obama's Second Term

Secret Court Judge Attended Expenses-Paid Terrorism Seminar

June 8th 2013

File Folders

U.S. District Judge Roger Vinson, who signed an order requiring Verizon to give the National Security Agency telephone records for tens of millions of American customers, attended an expense-paid judicial seminar sponsored by a libertarian think tank that featured lectures from a vocal proponent of executive branch powers.

Vinson, whose term on the secret Foreign Intelligence Surveillance Court began in 2006 and expired last month, was the only member of the special court to attend the August 2008 conference sponsored by the Foundation for Research on Economics & the Environment, according to disclosure records filed by the federal judge.

Disclosure records were collected as part of an investigative report that revealed how large corporations and conservative foundations routinely sponsor ideologically driven educational conferences for state and federal judges.

It’s unclear which lectures Vinson attended during the “Terrorism, Civil Liberty, & National Security” seminar. FREE’s website only provides a general agenda for the program and no lecture transcripts. Read more ..


Broken Banking

‘Fatal Blow’ Against Sham Corporate Directors Not So Fatal After All

May 27th 2013

Island of Sark

UK’s crackdown on Channel island ‘Sark Lark’ simply scattered key players to other tax havens.

Many Britons who make a living from ‘the signing’ as they call it, originate from the tiny Channel island of Sark, a notorious British tax haven.  Following scandals a decade ago about the “Sark Lark,” the group scattered, often setting up residence in far-flung jurisdictions such as Cyprus, Dubai, Vanuatu, Mauritius, or Nevis in the Caribbean. Many still keep in touch on Facebook.

They make up teams of sham company directors, according to documents we have seen, taking money to disguise the real ownership of thousands of international companies. This is not illegal, and they generally say they are helping owners preserve legitimate privacy. Sarah and Edward Petre-Mears, who moved residence to Nevis, worked through an agency in Northamptonshire. Some of their companies have been registered in the UK, at Companies House in Cardiff. Read more ..


Broken Banking

Inside the Shell: Drugs, Arms and Tax Scams

May 27th 2013

Indian Currency

On December 11, 2009, a former Soviet air force transport plane flying from North Korea to Iran stopped to refuel in Bangkok. The flight listed its cargo as spare parts for oil-drilling equipment. Instead police found 30 tonnes of explosives, rocket-propelled grenades and components for surface-to-air missiles, all being transported in breach of United Nations sanctions.

Three months later in a Miami courtroom, the U.S. Department of Justice revealed the country's largest money-laundering scheme involving billions of dollars from Mexican drug lords. Then, last April, documents emerged in London concerning Russia's largest tax fraud, an alleged $230 million heist that led to the untimely deaths of four people and threatens to damage the Russian government.

The story behind the three events is many degrees stranger than fiction, but it includes one common element – a number of shell companies associated with 68-year-old Queensland businessman Geoffrey Taylor or members of his family. Shell companies – that is, corporations with no apparent operations, no apparent employees and no apparent physical assets – are used by those who register them for a range of nefarious activities around the world. Read more ..


Broken Banking

British Virgin Islands Well-Known for Sunny Beaches – and Strict Secrecy

May 26th 2013

British-Virgin-Islands

Caribbean island chain is a favorite haven for attention-shy company owners. The British Virgin Islands are a micro-state whose national anthem is “God Save the Queen.” The islands consist of little more than a few stretches of tropical beach, with a population about the same size as that of the London suburban town of Windsor. 

British lawyers first realized during the 1980s Thatcher era that they could legally make money by selling financial secrecy there. Mrs. Thatcher’s abolition of exchange controls allowed British capital to move around freely. A few years later, when nearby Panama, the traditional location for obscure offshore entities, was disrupted by the 1990 U.S. invasion, worldwide demand for the corporate anonymity on offer from the BVI took off like a rocket. Read more ..


Broken Banking

Post-Soviet Billionaires Invade UK ... Via British Virgin Islands

May 26th 2013

Big Ben

Questions arise as mega-rich from Russia and former Soviet republics descend on London.

Britain’s friendly regime of offshore secrecy has tempted an extraordinary array of post-Soviet billionaires to descend on London, sometimes to the sound of gunfire.

Vladimir Antonov fled permanently to Britain after his father, Alexander, was gunned down in a Moscow street in 2009. Another associate, German Gorbuntsov, narrowly survived a volley of shots in London last March.

When Antonov bought a luxury yacht in Antibes, the Sea D, he was careful to register its ownership to an anonymous British Virgin Islands (BVI) entity, Danforth Ventures Inc. He also got his hands on enough cash to try to take over the ailing Swedish car manufacturer Saab, though he did not take control. He did succeed for a while in owning Portsmouth FC, the even more ailing British football club. Antonov is currently on bail in Britain. Lithuanian authorities are trying to extradite him for allegedly looting their collapsed bank Snoras, which he denies. Read more ..


Art News

Mega-Rich Use Tax Havens to Buy and Sell Masterpieces

May 24th 2013

Watermill-Van Gogh

Famed Spanish art patron uses island haven in South Pacific to manage her collection. Tourists who come to Spain’s capital often make a pilgrimage to the museums in Madrid’s so-called Art Triangle. After the Prado and the Reina Sofia, the next stop usually is the Thyssen-Bornemisza. The Spanish state owns the majority of the paintings inside this museum, but it also holds much of the private collection of Carmen Thyssen-Bornemisza, one of the world’s biggest art collectors.

What visitors don’t know as they look at these Monets, Matisses and other masterpieces is that many of them are legally owned by secrecy-guarded companies in tax havens: Liechtenstein, the Cayman Islands, the British Virgin Islands and the Cook Islands.

Van Gogh’s 1884 painting, Water Mill at Gennep, is one of the works Thyssen-Bornemisza purchased with the help of an offshore operative based in the Cook Islands, a South Pacific haven more than 10,000 miles from Madrid. Read more ..



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