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Watchdog finds the surprising truth about public officials’ salaries

By
Friday, August 26th, 2016

When Watchdog reports, other journalists take notice. In Mississippi, Watchdog’s recent report on public officials’ salaries made the local news, including a segment on Good Morning Mississippi.

Here’s a quick excerpt from a report on ABC 6 that cites our story:

You heard that right. A grand total of 36 school superintendents in Mississippi make more than the governor. Of course, he’s not doing too badly himself. But this raises an important question about education spending in the state: Are taxpayers getting their money’s worth?

Another report from Mississippi Watchdog examined that issue, finding that superintendent pay doesn’t correlate to school district performance. In fact, among the 36 superintendents who make more than the governor, nine of them — 25 percent — serve districts that receive a D grade from the Mississippi Department of Education.

Bloggers and citizen journalists descend on Denver to Amplify School Choice

By
Tuesday, August 23rd, 2016

Photo Credit: Josh Kaib

Fifty bloggers from across America joined the Franklin Center’s Amplify School Choice Conference

School choice is much more than a policy issue or a political football. For millions of students and their families, it’s a gateway to a better future. This was abundantly clear at the Amplify School Choice Conference, hosted by the Franklin Center earlier this month. 

Over 50 bloggers and citizen journalists joined us in Denver to learn from the city’s success with school choice and to take those ideas back to their communities across the country.

“I have a long list of potential topics for investigation and reporting thanks to the information presented at the conference,” said Tom Balek, who blogs at Rockin’ on the Right Side. “The conference also helped to shape my advocacy.”

Photo Credit: Josh Kaib

Franklin Center’s Nicole Neily explains why school choice matters.

On day one of the conference, attendees heard from a variety of speakers including Pamela Benigno and Ross Izard of the Independence Institute and political figures like State Rep. Angela Williams and State Sen. Kevin Lundberg.

In the afternoon, they were treated to informative talks from Ben Scafidi, a leading school choice economist with EdChoice and Kennesaw State University, and Tim Keller, one of America’s foremost school choice litigators with the Institute for Justice.

“The selection of speakers was great,” said Jim Shaw of Third Base Politics in Ohio.  

That evening at the Amplify School Choice Gala, Franklin Center’s president Nicole Neily addressed the audience, and EdChoice president Robert Enlow gave the keynote address.

The informative lectures and panel discussions gave everyone in attendance a unique opportunity to learn about many facets of education policy and how to apply that knowledge to their future reporting on the topic.

GET THE FACTS: Click here for Franklin Center’s School Choice Resource Guide

“The information was invaluable, a once in a lifetime experience,” explained D.C.-based blogger Mark Lerner. “I feel so fortunate to have been selected to attend.”

To end the conference, attendees visited two of the most innovative charter schools in the nation, STRIVE Prep and the Denver School of Science and Technology, to see school choice in action.

Photo Credit: Josh Kaib

Franklin Center’s Kevin Glass discusses how to best report on school choice.

They heard from Chris Gibbons, founder and CEO of STRIVE Prep, and Bill Kurtz, founder and CEO of the Denver School of Science and Technology.

Both schools serve diverse communities throughout Denver, and they do so in close cooperation with the Denver school district, which has helped them find suitable facilities for their schools. This is often a problem for charter schools in other cities, but not in Denver.

STRIVE and DSST are both expanding quickly, but without lowering their high standards for students. In fact, the Denver School of Science and Technology expects to soon serve 25 percent of Denver students in grades 6-12 while maintaining its 100 percent college acceptance rate.

Our attendees were excited to return home and bring the school choice message to their local audiences with their newfound knowledge and strategies. As they continue writing about school choice, you can find their work at AmplifySchoolChoice.com.

“Thank you for your efforts in blitzing the nation with stories about the value of school choice,” California Political Review’s Stephen Frank said. “It takes a massive information drill to get the attention of the public: this conference gave bloggers and writers from all over the country the tools they needed.”

Josh Kaib, Franklin Center’s Outreach Manager, was the organizer and emcee of Amplify School Choice.

Franklin Center interns reflect on the summer

By
Monday, August 8th, 2016

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Rather than making copies or fetching coffee, interns at Franklin Center and Watchdog have an opportunity to make substantive contributions to our work, building their skills and resumes even as they help us with the hard work of keeping government accountable.

This summer the Franklin Center had the privilege of hosting six interns. They worked with our journalism, marketing, and communications teams to do research, assist with social media, and even do some reporting of their own. If you’ve read a story on Watchdog.org the past three months, there’s a good chance one of our interns had a hand in the reporting.

As they depart the Franklin Center, Outreach and Content Manager Josh Kaib asked them to take a few moments to reflect on their experiences.

 

Grant Broadhurst

Grant Broadhurst intern 2016

Why did you want to intern with the Franklin Center?

The Franklin Center plays a unique role in the way it highlights stories that other news sources ignore. It has the freedom to break the 24-hour news cycle and keep government accountable at all levels, yet it manages to do so in an engaging way. I wanted to be a part of that and learn these skills from people with integrity.

What has been the most rewarding part of your internship?  

Writing stories and seeing them published has been the most rewarding aspect since the entire process fascinates me. I particularly like the way that I can call up strangers with much more experience and knowledge than myself and start asking them questions. “I’m a reporter” is a magic phrase: I can give people a voice and a platform to share their knowledge and professional opinions.

What would you like to say to Franklin Center donors and supporters?

Thank you. The people you support here truly care about what they do. They have invested a lot of time and expertise to equip the next generation of journalists. Wherever we go, they expect us to carry these ideas of accountability forward even if it’s under another banner or in a different role. You make that possible.

Read Grant’s stories for Watchdog.org

 

Nathaniel Crosser

Nate Crosser intern 2016

Why did you want to intern with the Franklin Center?

My initial phone interview with Josh Kaib sold me on the Franklin Center. He communicated a vision for the Franklin Center  — and what it can do for our society — that I ardently want to support. He described a culture of cooperation, diligent laborers, and camaraderie that I am grateful to be a part of. To be able to do meaningful and creative work in an organization like the Franklin Center is ideal.

What has been the most rewarding part of your internship?

The most rewarding aspect of working for the Franklin Center is the opportunity to support the mission. Other news outlets and companies care solely about ratings or ad sales and fail to promote a unifying, socially beneficial mission. The Franklin Center, unlike the mainstream media, wholeheartedly strives to make our country a better place.

What would you like to say to Franklin Center donors and supporters?

We are all truly grateful for your support. Every time you read an article or donate a dollar it is a blow of the hammer on the stake we hope to drive into the heart of the mass media and government complex that has so much power over the social, economic, and political structure of our society. Thank you for enabling us to shine the bright light of transparency into government’s darkest corners.

Read Nathaniel’s stories for Watchdog.org

 

Byron Solomon

byron solomon intern 2016

Why did you want to intern with the Franklin Center?

I had a gut instinct that it was the right place to be. More importantly, I believed in the mission, as my own home state (Alabama) is pretty corrupt. The Franklin Center can do a great deal of good across America, even in the most corrupt and financially irresponsible states.

What has been the most rewarding part of your internship?

The communication skills I have learned at the Franklin Center have helped me take the pro-liberty chapters I lead on my college campus to the next level. In general, I’ve been able to hone many professional skills at the Franklin Center.

What would you like to say to Franklin Center donors and supporters?

My time at the Franklin Center has encouraged me. There are bastions of hope in the media of which ol’ Ben can be proud. This is one of them. As long as Watchdog and the Franklin Center are around, state governments will be looking over their shoulders before wasting taxpayer money.

 

Graham Deese

Graham Deese intern 2016

Why did you want to intern with the Franklin Center?

As one of the few media outlets that shares my commitment to free markets, I was naturally attracted to the Franklin Center. By exposing waste, fraud, and abuse in government, the Franklin Center helps to shatter the illusion many people have that government can solve market failures without creating government failures of its own.

What has been the most rewarding part of your internship?

Working for the Franklin Center has given me the opportunity to raise awareness of a multitude of important issues throughout the state of Wisconsin. Additionally, working with Matt Kittle and the editing team has given me the chance to greatly improve my writing.

What would you like to say to Franklin Center donors and supporters?

You have made a great choice to support the Franklin Center. It brings into the media a perspective that all too often is forgotten or ignored. It keeps government officials accountable by exposing fraud and abuse to the public. I hope you continue your support so that the Franklin Center can continue its very important work for many years to come.

Read Graham’s stories for Watchdog.org

 

Michael Buse

michael buse intern 2016Why are you interested in journalism?

I think Journalism, especially watchdog journalism, is interesting because of its function as a check on power. Journalists tell stories, and the innate power of a story is framing a good guy and a bad guy. This power gives journalism the ability to hold people accountable, and that is very important to me.

Why did you want to intern with the Franklin Center?

As I read more and more into the focus of the organization, I came to realize that it is an organization dedicated to holding elected officials accountable, and that is something I am very passionate about, so everything just seemed to fall into place.

What has been the most rewarding part of your internship?

The most rewarding part has been filing information requests because, while preparing them can be tedious, getting them back and finding something comes with a massive “gotcha” moment.

What would you like to say to Franklin Center donors and supporters?

I would encourage you to continue to support this organization in any way you can. So many people I’ve spoken to this summer has spoken to the importance of what the Franklin Center does in establishing a critical check on state and local governments, and I think that is really indicative of the niche that Franklin has made for itself. Supporting Franklin Center is an investment with an impact.

 

Benjamin O’Connell

Benjamin oconnell intern 2016

Why did you want to intern with the Franklin Center?

The experience this internship provides in both the journalism and political field is unparalleled. It is a great organization to work for because of the work they do to keep the government in check and report injustices that affect the public.

What has been the most rewarding part of your internship?

The most rewarding part of my internship has been seeing the way we can give a voice to people that otherwise wouldn’t have one. Sometimes the articles we write can call attention to issues in order to make a difference in other people’s lives.

What would you like to say to Franklin Center donors and supporters?

I would like to say thank you, and please keep up the support because the work that this organization does is well worth it. All of our successes are because of your support.

Read Benjamin’s stories for Watchdog.org

Political hangover? Watchdog covers the conventions

By
Thursday, August 4th, 2016

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The national party conventions dominated the news for a week and a half, but while the clamor has died down, security and infrastructure costs from the national party conventions have saddled taxpayers with a “political hangover” that lives on.

Watchdog was in the thick of things in Cleveland and Philadelphia. Here’s a recap of our coverage:

A riotous RNC

Watchdog reporter Heather Kays showed up in Cleveland to a scene of chaos and protest – so much so that it was hard to figure out which person was protesting what cause.

Many of the usual suspects were there, such as Black Lives Matter and Code Pink, but others were harder to pin down. One proclaimed “The Pope is an Anarchist,” another offered “Free Hugs,” and a shirtless (but not braless) woman held a sign that said “BUST UP THE MILITARY BUDGET.”

Martha-Boneta-2016-RNC-photo-300x224On a more encouraging note, however, Republicans came out in strong support of school choice. Kays interviewed GOP House candidate Casper Stockham, who is running in Colorado’s 1st Congressional District on a platform that would create communities that provide school choice and “help kids learn the Constitution.” Stockham’s campaign is one example of the sharp contrast between the party platforms’ dueling visions of school choice. The current GOP platform pledges to “fight for school choice until all parents can find good, safe schools for their children,” while the Democratic platform doesn’t mention the term “school choice” at all.

Kays also had the opportunity to speak with Liberty Farms’ Martha Boneta (pictured above right). The Virginia farmer has been an outspoken advocate of property rights and is no stranger to the spotlight, but the self-described “crunchy conservative” said her appearance at the RNC was one of necessity.

“I just wanted a farm and to be left alone,” she said, but that became impossible when local officials tried to block her from selling local vegetables produced on her own land. She pushed back, and her struggles against big government prompted the passage of a pair of property rights bills in Virginia. It was a huge victory for Boneta, but as she sees it, it’s only the beginning of her fight to ensure that no citizen is at risk of having their rights and privacy invaded by the government.

Stinky shenanigans at the DNC

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Milwaukee Mayor Tom Barrett having fun at the DNC.

Even with Donald Trump as their opposing candidate, the Democratic National Convention in Philadelphia kept pace with the newsworthy antics of their Republican counterparts in Cleveland. It started with the disgraceful exit of DNC chairwoman Debbie Wasserman Schultz, which leaders like Senator Tammy Baldwin said was “the right thing to do” to “keep the focus where it belongs, on Hillary.”

The threat of a “fart-in” by unflappable Bernie Sanders supporters capped off the convention with an absurd note, and Watchdog reporter Matt Kittle provided a rundown of all the associated fear and loathing in Philly. Even though the Vermont Senator has now endorsed Hillary, members of the Bernie revolt showed up to protest the DNC’s handling of the primary. As Kittle reported, they could still spell trouble for Clinton in November.

Flatulence aside, many of the ideas aired by serious Democratic leaders have much more worrisome implications for Americans. The platform put forth by the Democratic Party was billed as the “most progressive platform in history” and calls for a number of pricey initiatives, including universal health care, a shift to 50 percent “clean electricity” within ten years, and an increase of the federally mandated minimum wage to $15 an hour.

As a prime example of what this Democratic platform could look like, Philadelphia Mayor Jim Kenney showed up to brag on his city’s recently enacted soda tax, a “regressive” policy intended to help fund pre-K programs even as the Nanny State discourages consumption of sugary beverages.

But hey, at least Kenney stuck to his guns on the issue. Philadelphia can’t say the same for it’s approach to ridesharing. The city’s big-labor backed taxi lobby has tried to limit competition from sharing economy competitors like Uber and Lyft, but Philadelphia’s transportation regulator and ridesharing companies struck a “semi-legalized” agreement that allowed the companies to offer their services during the conventions.

Despite Bernie Sanders’ and many Democrats’ hostility to the free-market policies that allow companies like Uber and Lyft to thrive, they seemed more than happy to avail themselves of the ridesharing service.

Ten stories to understand Mississippi’s Kemper Project “clean coal” boondoggle

By
Thursday, July 7th, 2016

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Mississippi’s Kemper Project entered the world with the highest hopes of the Obama Administration: that coal could be cleanly processed even while serving as a power source. The first-of-its-kind integrated-gasification power plant functions by converting lignite coal to natural gas-like synthesis gas, which fire its 582-megawatt turbines, capturing and storing carbon much better than traditional coal-fired plants.

A recent investigation from the New York Times has drawn national attention to the travails of Kemper, finding that the plant has been plagued by technical problems, cost-overruns and blame-shifting. The Times’ findings that Kemper has failed to live up to its billing, however, should come as no surprise to readers of Mississippi Watchdog, which has been covering the plant’s travails every step of the way for more than two years running.

Here are the ten Mississippi Watchdog stories you need to read to understand the history of this “clean coal” boondoggle:

7/28/14 – $5.53 billion Kemper Project’s genesis a tangled path

Red flags surrounding Mississippi Power’s Kemper Project started to become painfully apparent in the summer of 2014, when delays in the plant’s construction began stretching so long that it cost the Southern Company $133 million in federal investment tax credits. At this point the plant’s estimated cost had risen from $2.2 billion when it was initially proposed in 2009 to $5.53 billion. To help pick up the tab for rising costs, local ratepayers were slammed with an 18 percent increase on their utility bills.

11/5/14 – Report on Kemper Project casts embattled power plant in poor light

Concerns over the plant’s viability became more founded a few months later when Mississippi Watchdog covered a report on Kemper from POWER Burns & Roe — an engineering firm that specializes in building utility projects. At this point the cost of the plant had risen to more than $6 billion. The report highlighted three problem areas with the coal-gasification plant that were largely to blame for the delays and cost increases:

  • Safety issues caught late in the project and fixed at great cost
  • Major delays in acknowledging cost increases and delays in plant startup when the causes for those delays were apparent early in the process
  • Poor project management

3/20/15 – Nation’s oldest integrated coal gasification plant might point to more Kemper trouble

As a point of reference to the travails of the Kemper Project, which seeks to harness a relatively new technology, consider the experience of the nation’s oldest integrated coal gasification power plant: Tampa Electric’s Polk Power Station. Like Mississippi Power’s Kemper Project, this older and simpler plant uses a gasifier to turn coal into synthesis gas, and it, too, was beset by problems. A report by the Department of Energy in 2002, four years after the plant went online, found a raft of technical problems that eerily foreshadowed the difficulties the Kemper Project was to face.

7/24/15 – Kemper Project makes for an expensive natural gas plant

By July of 2015, the cost of the Kemper Project had ballooned to $6.229 billion and implementation of its gasification technology had dragged two years behind schedule. Instead of using the gasifier to transform the abundant lignite coal mined nearby into synthesis gas, as Kemper was designed, Mississippi Power began using natural gas to fuel the turbines of the combined cycle plant. Yet even as a natural gas plant, Mississippi Watchdog pointed out, the plant was still about $300 million more expensive to build than an equivalent conventional combined cycle natural gas plant powered by the same fuel.

9/10/15 – Kemper no longer considered just a clean coal plant

Once the Kemper Project started operating with natural gas, Mississippi Power began labeling it a “dual fuel” power plant capable of generating electricity from natural gas or synthesis gas made from lignite coal by the gasifier. This represented a major shift in the company’s tone from earlier documents authorizing construction that insisted the Kemper Project was intended to run on lignite coal as an environmentally friendly way of achieving “fuel diversity.” Mississippi Power CEO Ed Holland tried to spin this as a positive development, saying “the opportunity is there because gas prices are much lower than anyone predicted at the time the Kemper Plant was built.”

10/1/15 – Mississippi PSC commissioner accused of accepting illegal contributions

The image problems at Kemper went from bad to worse last fall when Mississippi Watchdog reported that Mississippi Public Service Central District commissioner Lynn Posey was accused of illegally receiving campaign funds from contractors on the Kemper Project. It is unlawful under Section 77-1-11 (1) of the Mississippi Code for a PSC commissioner to accept any gift, pass, money or campaign contribution from any person or entity of a utility under the regulatory authority for the PSC. The violations allegedly took place two years earlier at a pair of simultaneous fundraising dinners at Tico’s Steakhouse in Jackson and Weidmann’s in Meridian.

10/26/15 – Expert: More delays likely for Kemper Project

If there are any common threads running through the Kemper saga, they can be summed up in two words: overruns and delays. That was the conclusion, at least, of Don Grace, an accountant and subcontractor working for the Public Utilities Staff who told the Mississippi Public Commission last October that Mississippi Power invested in only “minimal design” to determine its original cost estimates and operating schedule. The result was cost overruns and construction delays that Grace predicted would delay Kemper’s startup date in the second quarter of 2016, potentially leading to rate hikes and the loss of more federal tax breaks.

For those keeping score at home, at this point the cost of Kemper had risen to $6.267 billion, and the plant was still two years behind schedule.

2/16/16 – Former manager: Southern Company lied about Kemper schedule

Yet another bombshell fell on the scandal- and schedule-plagued power plant in February when a former project manager at the then-$6.36 billion plant ended his company-ordered silence. Brett Wingo, who previously worked as an engineer for Southern Company Services, told Mississippi Watchdog that the company lied to regulators about the Kemper Project’s construction schedule in an effort to hang onto more than $234 million in federal tax credits. Wingo said he went all the way up the company’s chain of command in 2014 after he started to suspect impending delays two years earlier, but his pleas were ignored at every turn. Wingo was placed on administrative leave in August 2014.

3/3/16 – Lawsuit alleges fraud over ‘goliath’ Kemper Project power plant

The Kemper Project has yet to generate any power from its integrated coal gasification technology, but it has generated one thing in bunches: lawsuits. The latest was filed in March by three plaintiffs — a Biloxi seafood processing firm, Island View Casino and a Gulfport resident — claiming Mississippi Power Co. damaged its roughly 186,000 ratepayers by avoiding accountability for “fraud and mismanagement while fleecing the public in the interest of profits” in building the “goliath” Kemper Project power plant. The suit takes a different legal route than some of the previous lawsuits filed against Mississippi Power in that it does not seek to change the utility’s rates. Instead it is seeking economic losses, punitive damages, attorney fees and court costs.

At this point, the cost of the plant had ballooned further still – to $6.644 billion.

3/25/16 – Monitor: Kemper Project might not make its start date

Several months into 2016, Mississippi Power has yet to get its act together concerning the Kemper Project. According to a report in March from AECOM, an engineering firm that independently monitors and supervises the construction of the Kemper Project, the facility might not make its scheduled start date in the third quarter of this year. Randall Hodges, who leads the monitoring team, said that progress “will have to improve to meet the reported operational date of third quarter of this year.” He added that if Mississippi Power continues its startup progress of about 1 percent per month so far this year, it will take another 13 months to finish, pushing the in-service date into 2017.

Any delays beyond the end of August – the company’s projected commercial operation date – could cost the company up to $30 million per month.

See all of the articles on Watchdog.org

Finding America’s Unsung Heroes

By
Wednesday, June 29th, 2016

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The news is so full of pontificating politicians, talking heads, and statements from spokespeople that it’s easy to lose sight of the American people who are supposed to be at the heart of it all. As it turns out, however, there are many citizens who are working hard to stand up for their freedom and keep government abuse in check. To highlight and celebrate their accomplishments on behalf of their communities and their country, The Washington Times has been running a series of stories by Watchdog reporters featuring America’s “Unsung Heroes” – citizens across the country who are successfully fighting for responsible government and individual rights.

Meet the “cookie ladies”

Kriss Marion was an organic farmer, not a fighter. But Wisconsin’s restrictive law on homemade baked goods forced this peaceful sustainable homesteader to fight back.

Like a lot of small farmers, Marion is constantly looking for ways to monetize her farm. Organic veggies don’t have a big profit margin, so she and others in her circle turned to baking. Before the business could get off the ground, however, Marion learned that in Wisconsin, selling muffins, cookies, brownies or any other such homemade baked goods could get her into trouble. In fact, she was told by inspectors at the Dane County Farmers Market not to do it – otherwise she would face a $1,000 fine and up to six months in jail.

It didn’t make sense to Marion that she could serve someone a muffin legally, but could not sell a muffin legally, so she became an activist against the absurd rule, helping to lobby legislators to pass the so-called “cookie bills.” The first proposal in 2013 failed, despite bipartisan support, so Marion is taking the fight to the courts, where the legal battle is moving through the slow discovery process.

Read more about Marion’s story in The Washington Times.

Mississippi activist making a difference for liberty

A mere three years ago, Elaine Vechorik didn’t imagine herself becoming a political activist. She was a small business owner, satisfied with making a success of her motorcycle restoration and parts shop. Then she decided to get involved in the political process.

Mississippi hasn’t been the same since.

Rather than focus on national issues, Vechorik prefers to stick with ones that directly affect Mississippi taxpayers. She’s done a lot to save her fellow citizens money. One of her biggest successes was helping to kill the state’s inspection sticker law, which charged $5 per sticker and cost the state money every year. For several years, the Mississippi House had passed bills to end the program, which gave garages $3 for the cursory inspection and $2 back to the state, but each year the bills died in the Senate. Vechorik’s photo illustrations and persistent calls to key legislators for action finally helped goad the Legislature into killing the program in 2015, a statewide election year.

Read more about Vechorik’s story at Watchdog.org.

Kristi Rosenquist tilts at windmills

Minnesota resident Kristi Rosenquist isn’t one to rest on her laurels.

This past spring, for example, she was hard at work battling the wind industry (yet again), trying to persuade members of the Minnesota Legislature that the state needs better noise standards for siting wind turbines because those spinning noise-makers are now allowed as close as 500 feet from residents’ homes.

The problem is that the state uses noise standards not designed for turbines, Rosenquist argues. She said the Minnesota needs to eliminate the standard and create a new one.

“That means, in my opinion, they shouldn’t build any more turbines until they have new siting standards,” she said.

This latest fight is just one of a long list of Herculean efforts by Rosenquist in the fight against big government and the green energy industry. The battle began with a personal battle to protect her own hobby farm…

Read more about Rosenquist’s story at Watchdog.org.

Help us find more heroes!

Do you know an unsung hero in your state? Our friends at State Policy Network are currently accepting nominations for the sixth annual Unsung Hero Award, generously sponsored by the Vernon K. Krieble Foundation.

The Unsung Hero Award honors an individual whose work defines entrepreneurial public policy action in the spirit of the Vernon K. Krieble Foundation’s founder and president, Helen Krieble. The winner will receive a cash prize of $25,000, an all-expense paid trip to this year’s Annual Meeting in Nashville, TN, and recognition during the conference. Additionally, the nominating organization will receive a $5,000 prize.

To nominate someone for SPN’s Unsung Hero Award, please submit your form here by July 6, 2016. All nomination details and response questions are available here.

Puerto Rico is bankrupt: Is your city or state next?

By
Wednesday, June 22nd, 2016

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Cracks in the dam

“A new crack has appeared in the dam that restrains a great lake of federal, state, and local debt from inundating the country.”

So reads the ominous lede of Watchdog reporter Jon Cassidy’s story about the implications of Puerto Rico’s recent bankruptcy. As May began, the harsh reality of the U.S. commonwealth’s massive $70 billion debt hit the fan as the government defaulted on a $422 million bond payment.

Puerto Rico has no viable means of ever digging itself out of the hole, a fact that has led to calls for some type of federal bankruptcy declaration and Congressional action. The current bill on the table in Congress, the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), would confer a large degree of power over Puerto Rico’s finances to a seven-person Oversight Board. This board would have authority over debt restructuring and the ability to override the territory’s laws, executive orders, and existing contracts.

Critics in Congress say the creation of such a board is problematic because it undercuts the authority of Puerto Rico’s constitution, which backs its bonds with the “full faith credit and taxing power of the Commonwealth.” This means, these critics argue, that bondholders should get first priority for repayment. Despite their protests, the House has refused to take this constitutional “guarantee” language seriously, undercutting the “full faith” guarantee.

Think about it this way, Cassidy wrote, “as long as your monthly income exceeds your credit card minimum, you’ve got a balanced budget, Puerto Rico style.”

The cities and states to follow

The great danger of any Congressional proposal to help bail out or otherwise fix Puerto Rico’s debt crisis is the precedent it could set for other state and local governments.

“PROMESA sets a political precedent, although not a legal one,” wrote Heritage Action in a critique of the bill. “States may reasonably conclude that Congress will be willing, when the time comes, to change bankruptcy law in their favor, offer a stay of litigation, and/or offer them novel mechanisms for restructuring debt.”

In his coverage of a study from the Mercatus Center, Cassidy lists the ten states and cities that are most likely to follow Puerto Rico’s example and come crawling to Congress for help with their debt. The bottom ten states – Kentucky, Illinois, New Jersey, Massachusetts, Connecticut, Maryland, New York, Maine, California, and Hawaii – are much closer to the basket case of our Caribbean commonwealth than they are to states in relatively good fiscal health like Texas, the Dakotas, Florida, and Nebraska. However as states they are forbidden by federal law from declaring bankruptcy. This makes them less likely than a place like Puerto Rico to fall into insolvency (at least in the short term).

Cities, though, are another matter entirely, and much more likely to try shirking their obligations to creditors. Recent years have given us a number of examples of this (Detroit, MI; Alabama’s Jefferson County; and Stockton, CA, for starters), and many more cities appear to be on the fritz. These include New York City, with a whopping $46,400 debt per capita; Jersey City, where state and local debt weighs in at $41,800 per person; and Chicago, with a crushing $46,900 in state and local pension debt per person.

Click here to read the full list of the bottom ten states and cities facing bankruptcy.

Public unions play their game

As debt talks continue to stall, Puerto Rico’s public employee unions have been hard at work pushing to protect themselves in the bankruptcy. As Kevin Glass, Director of Policy and Outreach at Franklin Center, recapped in a op-ed for the Daily Caller, a commission established by the Puerto Rican government recently released a report suggesting that a portion of the debt involved was issued illegally. The report recommended a full audit was needed before attempting any further resolution to the debt crisis.

The problem with that recommendation, Glass argued, is that the head of this supposedly “independent” commission is also the president of the Puerto Rico chapter of the Service Employees International Union. This group has a huge vested interest in the outcome of the debt crisis. If only some debts are going to be paid, public sector unions want the government to prioritize its obligations to their pension funds.

“In any resolution to the debt crisis, unions will want to see every single dime of their own debt obligations to be saved, while finding ways to discount or invalidate other components of the island’s debt,” Glass noted, so having a union leader head up a government-established commission on the issue seems like a conflict of interest.

Just as unions fought to dispute the math surrounding Detroit’s pension obligations when that city went bankrupt, Glass said, “Union shops are trying to obstruct and gum up the works for any potential solution to Puerto Rico’s crisis; what’s needed is an honest accounting by those who do not have such obvious conflicts of interest.”

If more cities go bankrupt, their local public employee unions may look to Puerto Rico’s “independent” commission to see how they can protect their own interests at the cost of other creditors.

A bad odor at ODAR: Whistleblowers expose Social Security Administration

By
Thursday, June 16th, 2016

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Madness in Milwaukee

It all began, as many stories of scandals do, with a single gutsy act.

For years, Ron Klym had worked as senior legal assistant for administrative law judges at the Milwaukee Office of Disability Adjudication and Review (ODAR). As part of the Social Security Administration, these judges are tasked with granting or denying Social Security benefits.

Reviewing and dispensing Social Security benefits is an important responsibility, and one that was being plagued by management problems, Klym realized. He alerted senior officials about the problem, but then things started to get rough.

The SSA’s ODAR isn’t exactly known for its efficiency and timeliness. As of October, the average wait time for processing disability claims was 450 days. The pace gets even slower, however, if one tries to appeal the agency’s decision. At the Milwaukee office where Klym worked, records obtained by Wisconsin Watchdog showed that dozens of cases on appeal took more than 700 days to complete. Some even stretched to more than 1,000 days. Klym said the backlogs had grown to record levels and worried that the delays were impairing applicants’ civil rights. They may not have a right to the benefits, he reasoned, but they have a right to due process. So he blew the whistle.

“No one can guarantee the benefit. I know a case where someone has filed for a benefit 26 times,” he said. “It’s not the result, it’s the opportunity. If your opportunity has been waylaid, to paraphrase (George) Orwell, we’re all equal, but some are more equal. That’s a process issue.”

Doug Nguyen, communications director for the Social Security Administration Chicago region (which includes Milwaukee), said the agency was aware of the long waits for disability appeals hearings and was “working to address the issue.”

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As Klym tells it, however, the Milwaukee office was doing just the opposite. Rather than trying to address his concerns, he said the agency played a shell game by dumping scores of cases off to other regional offices, giving the impression that the Milwaukee office was performing better than it actually was. Worse, he said, the agency retaliated against him for blowing the whistle with harassment, additional work assignments, and unreasonable deadlines. He took his concerns to lawmakers in the U.S. Senate, and then went public to the press.

Shortly after Wisconsin Watchdog published a story detailing his allegations, he was placed on administrative leave.

Coming out of the woodwork

Innocent-1-225x300More whistleblowers have since come forward. After speaking anonymously with Wisconsin Watchdog in its initial report, Mary Brister went public with her story. She says that just a few days after she was anonymously quoted about alleged bullying and harassment within the Milwaukee ODAR, she was suspended for five days and given a one-year suspension from teleworking.

“I do believe this suspension is the result of me going forward with my story,” she said. As a veteran with PTSD, she added that she wanted to take her story to the public in order to stand up against an environment of intimidation in the ODAR workplace.

Celia Machelle Keller had a similar experience. A week after she went public with claims of misconduct and intimidation among managers at the Madison ODAR, she said a pair of federal investigators from the SSA showed up at her door and peppered her with questions. As the lead case technician at the Madison office for several years, Keller says management retaliated against her after she was called to testify in an inner-office misconduct case last year.

Like Brister, Keller was first quoted anonymously by Wisconsin Watchdog when she blew the whistle on misconduct, and she claims she experienced alleged bullying, harassment, intimidation and retaliation in response. She decided to go public, she said, because she was tired of living in fear.

News of the abuses at the Madison ODAR got worse last week when Wisconsin Watchdog reported that Administrative Law Judge John Pleuss is accused of extremely “inappropriate conduct,” including sexual harassment, at the Madison ODAR operations. In that story, a whistleblower told Watchdog that there is a “culture of corruption and cover-up” in the SSA offices, “and it begins at the top.” File notes from cases support this accusation that the judge determined disability claims on whether he believed a claimant was sexually attractive.

UPDATE: A source close to the situation has told Wisconsin Watchdog that Pleuss appears to have been suspended over the allegations. His hearings in recent days have been canceled amid a looming SSA Office of the Inspector General investigation into the Madison ODAR.

If Klym’s experience is anything to judge by, the fears of Brister and Keller are not groundless. His administrative leave status soon grew dire in the aftermath of his revelations. Less than a month after Wisconsin Watchdog’s first report, he said he was forced to sign what was effectively his employment death warrant.

He told Watchdog what happened when he was called into the office of Chief Administrative Law Judge Christopher Messina:

“He had a stack of papers in front of him. I said, ‘Well, it looks like a disciplinary action. Can I speak to my union rep? He said, ‘This is not a disciplinary action. This is a proposal to terminate. I need you to sign off on this.”

The Senate wants answers

Credit Image: © Jay Mallin/ZUMAPRESS.com

Amid the difficulties with their immediate employers at the SSA, these whistleblowers have found an important and powerful ally: U.S. Senator Ron Johnson (pictured), chair of the Senate Homeland Security and Governmental Affairs Committee. Johnson’s committee has received a number of complaints from employees at ODAR since Wisconsin Watchdog broke news of the scandal, and it has been briefed by SSA officials about the million-plus case backlog plaguing the disability claim system.

There are a lot of issues the agency isn’t talking about, however, and Johnson’s committee is pushing for answers. When asked about the accusations of retaliation, the SSA has cited the Privacy Act, claiming the law prevents it from disclosing information to Congress unless the whistleblower signs a waiver or the chairman of the committee signs on.

There’s just one problem with that argument, the Homeland Security committee says: nothing in the law throws up such obstacles to fact-finding.

The SSA’s feet-dragging has only made Johnson more determined to get to the bottom of the scandal. He says his committee will continue to push for answers. Earlier this week, after a month of trying to get information, Johnson sent a formal letter to the Social Security Administration asking for its “unfettered cooperation” in turning over information about allegations of misconduct and retaliation in its disability claims review offices.

“I write to you concerning reports of whistleblower retaliation within the Milwaukee and Madison hearing offices of the Social Security Administration’s Office of Disability Adjudication and Review,” Johnson said in the letter to Carolyn Colvin, acting commissioner at the SSA. He went on to show how SSA officials have systematically refused to address questions about media reports quoting whistleblowers claiming harassment and retaliation.

“Despite the serious issues that these media reports highlight, SSA has refused to provide information to the committee about these personnel actions,” he wrote.

Here’s what the senator’s entire request formally seeks:

  • All documents and communications concerning allegations of whistleblower retaliation within the Chicago region, including but not limited to all personnel documents pertaining to Ron Klym, Celia Machelle Keller, and Mary Brister.
  • All documents and communications between or among the office of the acting commissioner, the counselor to the commissioner, the Office of Disability Adjudication and Review, and the office of General Counsel, concerning the termination of Ron Klym.
  • An explanation of what SSA is doing to investigate the reported whistleblower retaliation within SSA ODAR.
  • An explanation as to whether SSA has disciplined any employees for retaliating against whistleblowers.
  • An explanation of how SSA will ensure that whistleblowers do not experience retaliation as a result of speaking to Congress or the media.

Johnson wants the information by July 28. Read the full letter here.

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The rise of the Google Administration

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Wednesday, May 25th, 2016

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A White House regular

Watchdog rocked the news cycle last week when content editor Johnny Kampis reported that Google has enjoyed unrivaled access to the White House during the presidency of Barack Obama.

The story found that Johanna Shelton, Google’s director of public policy (effectively the company’s top lobbyist), had visited officials from the White House a whopping 128 times since Obama took office in 2009.

If that sounds like a lot, well, that’s because it is. As a comparison, consider that the top lobbyists from other companies in the telecommunications and cable industry such as Comcast, Facebook, Amazon, and Verizon have visited the White House a total of 124 times over the same period.

Drudge Report picked up the story, and the Internet responded in outrage.

Fox Business host Lou Dobbs, for example, had a few simple questions:

Actor Rob Lowe also chimed in:

Watchdog’s findings stem from information uncovered by the Campaign for Accountability’s Google Transparency Project. The Campaign for Accountability is a nonprofit, nonpartisan organization that works to expose corporate influence on government. In this case, that meant identifying the 50 biggest lobbying spenders’ policy pushers and tracking the number of times they appeared in White House visitor logs. In 2015 Google’s parent company Alphabet Inc. spent $16.6 million on lobbying – the twelfth most of any company and more than any other technology firm. All told, visits to the Obama White House by employees of Google and its related companies over the past seven years add up to 427. That’s an average of more than once a week while Obama has been in office.

Many of these meetings have been with high-level officials. At least 21 included Obama himself, and about an equal number included higher-ups like White House chief of staff Denis McDonough; former chiefs of staff Jack Lew, Bill Daley, Pete Rouse, and Rahm Emanuel; senior adviser Valerie Jarrett, and economic adviser Jeffrey Zients.

“You don’t know what the meetings are about, but the fact that someone has that level of access at the White House is revealing,” said Anne Weismann, executive director of the Campaign for Accountability. “It certainly suggests a level of influence.”

The visitor logs are only the beginning of the story here. The White House isn’t subject to the Freedom of Information Act, so the public can’t verify that the logs reveal all such visits.

Antitrust allegations drag on

Information from the White House visitor logs suggests that some of those visits could have been particularly helpful to Google in 2011 and 2012, when the company was navigating a case brought by the Federal Trade Commission. The FTC was investigating the company’s search-engine practices over concerns that Google was gaming search results to favor its services over competitors. The FTC found no wrongdoing, but Google reached a settlement with the commission in 2013 that granted its competitors access to important standardized technologies necessary for devices like phones and laptops.

Around the time the FTC was considering the case in 2011, Google Transparency Project found that Sheldon and a number of other top Google representatives held a flurry of meetings at the White House. In his story for Watchdog, Kampis highlighted one in particular that stands out: “Shelton, Google director of product management Hunter Walk and Raben Group lobbyist Courtney Snowden met with White House domestic policy counsel Steve Robinson on April 17, 2012. Raben Group was one of the lobbying firms Google retained to help with the FTC antitrust case.”

Even with the 2013 settlement, however, Google may not quite be out of the woods with the FTC. As Politico recently reported, officials from the FTC are again questioning whether Google has “abused its dominance in the search engine market.” Sources said this may be a sign that the agency intends to reopen the investigation.

The company currently faces a similar situation in an antitrust case with the European Commission. That legal battle has dragged on since 2010 as the company has repeatedly sought to reach a settlement with the European Commission. If no settlement is reached, which looks increasingly unlikely, it could result in Google being slammed with a 3 billion euro fine (around $3.4 billion in US dollars). That would be three times as large as the previous largest antitrust fine.

Read more from Watchdog’s series The Google Administration

Government regulators vs. the people: Texas Watchdog covers ridesharing regulations

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Wednesday, May 4th, 2016

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With their efficient services and innovative crowdsourcing business model, ridesharing companies like Uber and Lyft have captured the affection of an new generation of consumers. Local governments, however, have not been so quick to warm up to these disruptive new companies.

Consider the story of Uber. After launching in June 2010 in San Francisco, the company’s value has skyrocketed to more than $62 billion – making it the world’s most valuable startup. And yet it has been opposed by government at nearly every turn. Shortly after launch, the San Francisco Municipal Transportation Agency and California Public Utility Commission tried to shut down the burgeoning company. In New York, the Taxi and Limousine Commission threw its full political weight against Uber. In Chicago, the company caught a break only when local newspapers found that local transportation authorities were trying to change their own regulations to keep Uber out. And in Washington, D.C., the City Council tried to force the company into a rate five times as high as that charged by taxis.

You might think that Texas, a state whose business-friendly reputation has long been championed by Governors Rick Perry and Greg Abbott, would welcome innovative new companies like Uber and Lyft with open arms. But many cities in the state have been downright hostile to the ridesharing business by passing ordinances that require all ridesharing drivers to be fingerprinted by the city – a costly and time-consuming process – before they can drive.

The people rise up in Austin

After Uber and Lyft said that they would leave the Austin market if the city’s fingerprinting requirements for ridesharing drivers went into effect, Mayor Steve Adler pushed for a delay in the implementation of the new regulations to buy time to find a compromise. His hand was forced, however, by a remarkably successful petition effort among citizens. Ridesharing Works, an advocacy group that supports ridesharing, spent just three weeks gathering 65,000 signatures for a petition calling for the council to either remove the fingerprinting rules or let citizens vote on whether to keep them.  The vote will be held on Saturday, May 7th.

The groundswell of public support for the companies seemed to come as a surprise to pro-government Austin officials. As Austin writer Neal Pollack observed, “the city council proved itself to be remarkably tone-deaf to the actual needs of its citizens. They still seem stunned by the outcry.”

“You’ll still hear that this was some sort of corporate scheme, but look at these people,” said Austin City Council Member Ellen Troxclair, referencing petition supporters, many of whom are ridesharing drivers who testified against the fingerprinting rules. For her part, Troxclair voted against the ordinance.

Even the editorial board of the Austin American-Statesmen, which usually takes the side of government regulators, called on the city to surrender to the people.

Despite the public outcry, the council refused any compromise. Adler said he offered a system that would merely incentivize fingerprinting for drivers without making it a requirement, but the city council majority buried it. Rather than reverse their positions, they punted to a special election, which will cost taxpayers around $500,000 to $900,000 to hold.

With the election just a few days away at this point, Texas Watchdog bureau chief Mark Lisheron distills the issue down to this: “No matter what you see or hear or read from now until election day on Saturday, Proposition 1 asks whether or not people of free will want ridesharing companies to offer their services in Austin. Everything else is politics.”

It’s as simple as that.

Corpus Christi “reconsiders”…

While ridesharing advocates have reason for optimism going into Saturday’s election, the story looks decidedly less promising for ridesharing companies in Corpus Christi, where Uber already pulled out in March after failing to convince the city council that its drivers shouldn’t have to submit to and pay for fingerprinting. That made Corpus Christi the third Texas city in a six week span to see Uber depart (the other two were Galveston and Midland).

Uber argues that such regulations are costly, redundant, and deter drivers. It seems lost on the council that Uber already performs criminal background checks on all of its drivers apart from fingerprinting.

“The proposed ordinance,” wrote Uber regional general manager Sarfraz Maredia, “would require drivers to complete unnecessary and duplicative steps that make it difficult for them to earn extra money and hurt our ability to ensure that riders have access to reliable and affordable transportation.”

There was apparently enough pushback to prompt the Corpus Christi City Council to reconsider its fingerprinting ordinance, as three weeks after Uber pulled out City Councilman Chad Magill asked that the issue be brought up again. It was unclear exactly what this reconsideration would look like, but Magill mentioned that Uber officials had met with him for the first time to offer alternatives to the city’s policy.

“The motion to reconsider is a clear message that we are listening, and new information reopens the conversation – and rightfully so,” said Magill, who may have also had in mind a website called Save Uber in CC, which is gathering signatures online to push the council to roll back its fingerprinting ordinance.

One of those signers is Steve DeAses, co-founder of Corpus Christi Digital, who set up the website. He told Watchdog that every one of the 1,300 signatures signed on the website (which was only a week old at the time) went directly to Mayor Nelda Martinez.

“There is a big disconnect between the council and the public,” he said. “I don’t think most of the people on the council have ever used Uber. They haven’t given a whole lot of thought to what the public is interested in.”

Despite the efforts of Magill and many others, the reconsideration went nowhere. A two-hour marathon of renewed debates at the end of March failed to convince Mayor Martinez and four City Council members to reconsider the ridesharing ordinance. Martinez made it clear that if you don’t fingerprint, you don’t drive.

Ridesharing advocates felt ambushed, and have vowed to start gathering written signatures for a petition to get the ridesharing question put to a popular vote. Even if their petition is successful, the earliest the issue could be voted on is Nov. 8, on the general ballot.

Until then, Corpus Christi residents will have to content themselves with taxis.