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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.”

Click here to read more articles in this series

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.

Click here to read more articles in this series

The rise of the Google Administration

By
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

By
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.

Obamacare roadshow: Watchdog covers the cost of Gov. Kasich’s Medicaid expansion

By
Wednesday, April 27th, 2016

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Ohio Gov. John Kasich’s poll numbers may not be skyrocketing, but the cost of expanding Medicaid in his state certainly is.

For Watchdog readers, neither of these things will come as a surprise. When Kasich announced his bid for the presidency last year, Watchdog’s coverage of his major policy decisions as governor of Ohio had already been nearly a year in the making. Since then, Kasich’s presidential campaign has brought his controversial decision to take advantage of President Obama’s unpopular 2010 healthcare law into the spotlight as Republican primary voters decide whether the Ohio governor’s policies align with their values.

Kasich’s Obamacare expansion

Watchdog reporter Jason Hart first took up the story in September 2014. Ohio’s Medicaid enrollment under the expansion had just topped 367,000, passing Kasich’s initial projection for enrollment levels at July 2015. In the year and a half since, the governor’s projections for his state have continued to fall far short of the actual tally. Last March was the most expensive month yet for the expanded program, costing taxpayers $411 million as more working-age adults with no kids and no disabilities flocked to the Medicaid rolls. This puts Kasich’s Obamacare expansion on track to cost $28.5 billion by the year 2020 – more than twice as much as his administration projected.

This has raised questions from critics who worry that expanding health care for able-bodied adults could be a disincentive to work. How many of the Ohioans who have recently enrolled in Medicaid have jobs?

No one knows, not even the Ohio Department of Medicaid. Last Spring, the department told state Senate members that 43 percent of enrollees were employed, but it has no current data on how many of Ohio’s 673,000 Obamacare expansion enrollees are gainfully employed. ODM also doesn’t track how many of these new enrollees had private or employer-sponsored health insurance prior to enrolling in Medicaid – or how many of them are incarcerated.

Never mind that Kasich initially estimated 447,000 people would sign up under the expansion by 2020. That means that “if ODM capped Obamacare expansion enrollment at its current level,” wrote Hart, “the two-year-old program would already be 48 percent larger than the Kasich administration said it would be after seven years.”

Lest anyone be confused about how Medicaid expansion became part of Ohio law in the first place, Hart has a helpful breakdown of how the policy fight played out in 2013:

  1. The Ohio House stripped the Obamacare Medicaid expansion from its version of the 2014-15 budget.
  2. The Ohio General Assembly explicitly banned expansion in the final 2014-15 budget sent to Kasich’s desk.
  3. Kasich used a line-item veto to strike the legislature’s ban on expansion.
  4. The Kasich administration, with approval from the Obama administration, expanded Medicaid to the guidelines set in Obamacare.
  5. The Kasich administration asked the Ohio Controlling Board to appropriate funding to pay for the Medicaid expansion.
  6. The Ohio Controlling Board approved Kasich’s Obamacare expansion funding request.
  7. Six Republican legislators and two Right to Life groups sued over Kasich’s Controlling Board maneuver, but the Ohio Supreme Court ruled in the Kasich administration’s favor.

The end-run around the state legislature is not quite the story Kasich has been telling primary voters over the past year. He claims the legislature didn’t want to vote, so he convinced General Assembly leadership to pass Medicaid expansion through the Controlling Board, but ranking members of Ohio House leadership at the time tell a different story.

Read the past two years of Watchdog reporting on Ohio’s Obamacare expansion

The “Obamacare Roadshow”

Another favorite talking point of Kasich’s is the claim that he slowed the growth of Medicaid from 10 percent to 2  1/2 percent – a drastic reduction. A Watchdog analysis of the numbers from ODM (see chart below), though, found that Ohio’s Medicaid enrollment and spending have actually grown at a much faster rate since Kasich was elected governor in 2011. Actual enrollment growth during his time in office is above 9 percent.

Kasich also likes to claim that Medicaid expansion is paid for with “Ohio money,” but as Hart points out, this claim is misleading at best. There is no special lockbox of “Ohio money” that Kasich chose to bring “back to Ohio.” The program is paid for with billions in new deficit spending from the federal government (which has a massive debt of its own).

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During the primary elections Kasich has brought his “Obamacare roadshow” all over the country, but it has not always been well-received by Republican primary voters. In Maryland, he said he would repeal Obamacare while keeping the largest part of the unpopular law – the expansion of Medicaid – in place. In Wisconsin, when a town hall voter challenged his decision to “choose the Washington-based solution,” Kasich bristled. He pulled out his 2 1/2 percent talking point and framed his decision to expand Medicaid as an opportunity to treat the mentally ill, drug-addicted, and working poor, even though the program isn’t targeted at any of those groups.

Kasich has tried making a similar argument in Virginia, Florida, and South Carolina on the campaign trail – all states that rejected Medicaid expansion, and all states that chose a different candidate for president.

Read more Watchdog coverage of Kasich’s “Obamacare Roadshow”

On empty: Watchdog covers demise of Mississippi gas tax proposal

By
Thursday, April 21st, 2016

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It began with Mississippi Gov. Phil Bryant’s state of the state speech at the Capitol in January. The governor wanted to sell voters on a middle-class tax cut, but there was a catch: a gas tax increase to offset the revenue loss.

“There is no reason we cannot balance an increase in fuel tax with an equal and sufficient tax reduction,” Bryant said. But it turns out he was wrong. Mississippi lawmakers would find plenty of reasons to avoid raising the gas tax.

Mississippi has a relatively low gas tax at 18.8 cents per gallon, which ranks 44th among states, but when combined with federal taxes it still adds up to a hefty sum – a tax of 36.4 cents on every gallon of gasoline.

It should come as little surprise, then, that public opposition to raising the tax remains high. A poll of 500 voters commissioned shortly after Bryant announced his push for a gas tax hike found that a decisive 86 percent of voters opposed increasing the gas tax. And in an implicit warning to lawmakers, the poll found that 73 percent of respondents would be less likely to vote for their representative if he or she voted to increase the tax on gasoline.

Elaine Vechorik, vice president of the conservative organization Mississippi for Liberty, said the governor’s plan was a “shell game” and outlined the case against a gas tax increase.

“Mississippi’s Department of Transportation is rife with corruption, incompetency and waste. We need transparency for departmental contracts and there is a need to better prioritize projects,” she said. “Throwing more money at a broken department will translate into even larger tax increases in the future.”

Bryant’s call for increasing the gas tax was prompted by a report by the Mississippi Economic Council that found the state needed to “invest” $300 million every year in additional highway spending for state roads, plus $75 million annually for counties and municipalities. The state could increase its revenue by this sum, the report said, at a cost to Mississippians of 37 cents per day.

The figure may seem low, at first glance, but Russ Latino, president of the Mississippi chapter for Americans for Prosperity, called on voters and taxpayers to have a little perspective. That 37 cents a day adds up to $135 a year for every person in the state, Latino said, so a family of four would effectively be paying an extra $540 in taxes every year.

Furthermore, Latino pointed out, the MEC report failed to account for Mississippi’s highway deficiencies relative to other states. The Reason Foundation’s highway report ranked Mississippi eighth among states with the highest performing road systems.

When it came time for lawmakers to introduce legislation in response to appeals by the governor and the MEC, one by one their proposals stalled and died. The first to go was Senate Bill 2859. Introduced by state Sen. Willie Simmons (D-Cleveland), it would have instituted an 8 percent tax on gas at the wholesale level, but Simmons quickly recognized that his bill was doomed. To give the gas tax issue a fighting chance, the Senate’s Highways and Transportation Committee voted to substitute in the text of a placeholder bill. As Mississippi Watchdog reporter Steve Wilson explained, passing a placeholder bill highlighted the code sections of state law that would have to be changed to raise the gas tax, allowing the measure to stay alive and keeping the debate open later in the legislative session.

The next two gas tax bills to die were on the House side. House Bill 1681, by state Rep. Robert Johnson III (D-Natchez) would model Mississippi’s gas tax after North Carolina by attaching a percentage rate of taxation (in this case 6 percent) on gasoline at the wholesale level. It would then reduced the set figure at the wholesale level to 15 cents per gallon. House Bill 1694, by state Rep. David Myers (D-McComb) would have simply raised the gas tax to 20 cents per gallon.

For a brief period of time, it seemed like the two chambers were locked in a game of chicken, where the loser would be the first to pass a tax increase, observed Wilson. House Bills 1681 and 1694, however, both died in committee. That left Senate Bill 2921 as the lone chance for increasing the state’s gas tax. SB 2921 made it out of the Senate Finance Committee, and after a lively debate on the Senate floor, during which some Republican members questioned the need for a higher gas tax in the first place, passed with a 34-13 vote.

The problem with SB 2921 was that it was merely a placeholder – a vehicle for a gas tax increases that didn’t contain a concrete proposal or specific numbers. This eventually forced the Mississippi Legislature into considering a compromise that would tether the gas tax to the wholesale price of gasoline. In exchange, the state’s corporate franchise tax would be eliminated, along with some smaller changes to the tax code.

If there was window of opportunity for the bill, this was it. The next statewide election would not be held until 2019, giving Republican lawmakers who ran on not increasing taxes some wiggle room.

“This is the very first year of your term,” said Nathan Shrader, a political science professor at Millsaps College who explained the situation to Watchdog, “so I suspect if they’re going to put themselves on the line to vote for a tax increase, this is really the only time they can do it.”

Any lawmakers who promised not to raise taxes, however, ended up staying true to their word. The Mississippi House killed SB 2921, effectively exhausting any and all chances the state had to raise its gas tax this session.

Where’s the justice for juvenile detention workers in Colorado?

By
Thursday, April 14th, 2016

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Employees under attack

The story of juvenile justice problems in Colorado started a year and a half ago near the end of 2014. The headline from Colorado Watchdog resonated across the state: “Attacks on juvenile detention centers skyrocket after policy change.”

Over the prior four months, reporter Art Kane had found, 91 juvenile detention staffers in Colorado were injured in incidents with youths – almost twice as much as any four month span since 2012. Kane also found that the spike in incidents correlated with a policy change restricting the use of seclusion to handle violent youths at juvenile detention centers. This “Positive Behavioral Interventions and Support” method sought to “infuse positive reinforcement” into detention facilities rather than using harsher policies like inmate seclusion.

Colorado authorities didn’t want to make the connection, however. State Sen. Keith Lambert, who chairs the powerful Joint Budget Committee, said the figure showed the Colorado Department of Human Services was mismanaging its youth detention facilities, while Robert Werthwein, the acting chair of CDHS Division of Youth Corrections, said he wasn’t sure what caused the increase in attacks. Werthwein speculated that there were likely a variety of reasons.

As is often the case in government, the proposed solution to deal with the spike in attacks on staff was simplistic: throw more money at the problem. Even though the inmate population hadn’t increased along with the number of incidents at juvenile detention centers, Werthwein’s division sought a budget increase of $10 million over the following two years to hire 208 new employees.

Watchdog dug deeper into public records and found a troubling string of evidence that painted a picture of ineffective policies. It was often repeat offenders, for example, who kept attacking juvenile detention staff. At the Colorado Springs Youth Service Center, one of the most troubled facilities when it came to inmate attacks on staff, eight youths were responsible for almost half all recent fights and assaults at the time. Lawmakers responded by grilling human service supervisors, who failed to provide any decisive answers.

Soon after the first Watchdog stories were published, former employees of CDHS began telling Watchdog that state policy changes were primarily responsible for the increase in attacks. These employees claimed administrators had “coddled” inmates to the neglect of staff safety. Robert Suiter, for example, spent more than a decade working as a youth corrections staffer before leaving because he thought the work had grown too dangerous. He told Watchdog that after implementation of the new policy banning seclusion, inmates had started realizing there were few consequences for violence. To make matters worse, Suiter said, word had spread unofficially among employees that staff who used physical force or restraint to control violent inmates would face greater scrutiny.

shutterstock_96736993“You can’t touch kids, you can’t lock kids up,” he said. “But these are seasoned criminals who have been committed a number of times – veterans – and if you can’t lock them up, they’re going to start punching people in the face as often as they can get away with it.”

A former teacher and principal at schools in youth detention centers named Larry Farmer reached out to Watchdog to echo this sentiment. “I don’t think the kids are held accountable like they need to be,” he said. “Kids live up to or down to the expectations that you put on them.”

One former juvenile detention worker who had been attacked twice told Watchdog that she was threatened with firing. Sonia Huerta worked at the Marler center at Mount View Youth Services Center, which is run by a private contractor called Rite of Passage Inc. She felt that the first attack on her encouraged inmates to attack her a second time, and that if she stayed at the facility it would make her a target for future violence. Rite of Passage, however, told her she would lose her job if she didn’t return to Marler, Huerta said. Both Rite of Passage and CDHS, which owns the Marler facility, declined to comment on the incidents involving Huerta.

In response to criticism over the Division of Youth Corrections’ handling of the new policy, Werthwein stressed that “we can’t violate (anyone’s) rights.” Explanations beyond that have been hard to come by.

The experiences of Huerta, Farmer, and Suiter do not appear to be uncommon among employees. The Division of Youth Corrections saw a 23 percent turnover rate over the prior fiscal year, making it difficult to fill open positions even with the $10 million increase in funding CDHS was asking for.

Troubles in the statehouse

A month after Watchdog’s initial reports, the woes of CDHS took on a new form in the Colorado legislature when the join Budget Committee voted unanimously to rescind $1.2 million from the department after it used the funds to hire new staff without telling lawmakers. This brought on a new level of scrutiny from the statehouse, forcing two top members of Gov. John Hickenlooper’s staff to come before the Joint Budget Committee and apologize for the “miscommunication.” Lawmakers began calling for greater scrutiny over the state’s juvenile detention facilities in light of Watchdog’s reports about the increase in attacks.

Frustrated by CDHS’ refusal to provide him with information about the problem, State Sen. Kent Lambert sponsored a bill that would used open records laws to require CDHS and other agencies to release “specified information related to incidents that occur in a facility operated by the Division of Youth Corrections, so long as all identifying information has been redacted.” The bill’s intent was to clarify that CDHS can withhold the identities of youth offenders yet still must provide information about what is happening in its juvenile detention facilities.

By September 2015, the rate of attacks had dropped about 40 percent from the previous year’s record levels, but the improvement came at a price. It cost Colorado taxpayers an extra $3.5 million to hire 75 new employees to reduce incidents to the level they were at before the state banned seclusion as a punishment for violent inmates. And despite an overall decrease in attacks, Watchdog found the rate of most violent attacks remained high.

Six months later, violence in the face of staffing issues continues to plague Colorado’s juvenile detention system. Even though the state legislature appropriated extra funding to increase staffing, Watchdog obtained figures showing CDHS had hired only half of the 22 positions it was authorized to fill this fiscal year.

Meanwhile, Watchdog continues to hear stories like that of juvenile corrections officer Gregory St. Martin. In August 2014 St. Martin herniated two discs in his back while trying to break up a fight between inmates. The injury effectively ended his career.

“We were undermanned,” he told Watchdog. “There’s no accountability. If you punch them, you’re going to get in trouble, but if they break your back, they won’t even face charges.” According to sheriff’s records, the incident was never reported to police for investigation and potential prosecution despite the severity of St. Martin’s injury.

“This guy tried to hurt me, meant to hurt me and they don’t even write this up,” he said. “They say this is obstruction of government operations instead of a violent assault.”

Read the entire story series about Colorado’s juvenile justice woes at Watchdog.org

Vermont’s environmental civil war

By
Wednesday, April 6th, 2016

Solar panels vermont

With its beautiful northeastern scenery and idyllic towns, the state of Vermont has long been a bastion of environmental rectitude and environmentally-conscious policies. But whatever sort of coherence there may have been in the environmental movement in prior decades has been shattered in recent years. The rift in environmental priorities springs from the state’s ambitious goal of achieving 90 percent of its electricity from renewable energy by the year 2050. This staggering aim entails a massive expansion of green power sources like wind and solar, but these technologies have downsides. Vast solar arrays create unsightly breaks amid Vermont’s landscape, and wind power can be a noisy annoyance when sited near a community – not to mention the danger it poses to birds in the area.

It should come as no surprise, then, that the expansion of renewable energy in Vermont doesn’t always sit well with citizens – even those that place a high value on preserving the environment. The environmentalist movement thus finds itself in a civil war, of sorts, in which Big Renewables is pitted against average citizens and local municipalities.

More than one hundred towns in Vermont have banded together to form an “Energy Rebellion” against the unchecked spread of Big Renewables. Fueled by citizens and activists tired of moneyed interest groups disrupting their homes and their way of life, these towns are pushing back against the installments of vast solar arrays that take up acres of forests or farmland, and they’re resisting the construction of wind turbines that threaten local bird populations and make a lot of noise near residential areas.

wind turbine vermontTheir main concern is that the state’s Public Service Board is essentially rubber stamping the siting of new renewable energy projects without regard to the well-being of local citizens who might be affected by such projects. Since the Vermont Energy Rebellion began gaining steam, only one proposed project site has been rejected by the PSB, but activists worry that it doesn’t signify any meaningful change of priorities by the decision-makers at the PSB. The procedural process for towns that want to oppose the siting of proposed renewable energy projects remains complex, and towns still have virtually no authority of their own to counter the will of the PSB.

Legislation has been introduced in the statehouse to give the PSB incentives to choose locations that won’t harm rich farm land, property values, or, ironically, the environment. But activists again worry that it does little to actually grant towns more control of where and how new energy projects are sited.

Indeed, despite these limited victories, money and political will has not been on the side of local activists, and that is not likely to change. Renewable energy projects qualify for massive federal and state subsidies, making them quite lucrative. And with the pressure for Vermont to achieve 90 percent renewable energy use by 2050, government officials are eager to bring as many new renewable energy projects as possible online.

Could this clash between local environmentalists and Big Renewables be a portent of things to come in the rest of the country? Vermont is unique among states in its 90 percent renewables goal, but similar concerns over the unintended environmental effects of renewable energy projects, such as wind turbines, have been raised elsewhere.

Download Watchdog’s in-depth whitepaper to learn more about Vermont’s energy siting war

Watchdog finds ghost teachers doing union work on taxpayer dime

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Wednesday, March 30th, 2016

Ghost man stock

Pennsylvania may be full of ghost stories, but a much more tangible kind of “ghost” has been haunting the state’s school districts lately. These ghosts are found in the form of teachers working for their local teachers union – nowhere to be found in the classrooms in which they were originally hired to teach.

The term “ghost teachers” (also known, more tactfully, as “release time” or “official time”) refers to a practice common in school districts across the country of allowing teachers to leave the classroom to work full time for their local teachers union. This is problematic from the perspective of taxpayers because those teachers remain employed and paid by the school district even though they aren’t spending any time teaching.

Philadelphia schools, for example, paid at least 18 teachers $1.7 million while they worked for the Philadelphia Federation of Teachers last year. For many of these teachers, it’s been years since they taught in the classroom; some have even been on release time for decades. The school district’s rules currently allow the PFT to pull up to 63 teachers from the classroom each year for union purposes. The PFT has said most of those teachers simply work as information officers, but it later revealed that some work as political operatives.

Granted, in the case of Philadelphia, the PFT says it reimburses the school district for the salaries of teachers who spend their workdays with the union. But there’s still a catch for taxpayers. Ghost teachers continue to accrue seniority while working for their union, even though they aren’t gaining any experience teaching, and they continue to earn a pension because they are still technically employed by the school district. On top of that, students must pay the priceless opportunity cost of losing out on an education from qualified, experienced teachers. This is especially significant in Philadelphia, where the school district has openings for 200 full-time teaching positions and lacks enough subs to regularly fill classrooms when teachers are absent. There is also no official requirement that teachers unions reimburse taxpayers for ghost teachers.

classroom schoolWatchdog reporter Evan Grossman has covered multiple efforts over the past year to rein in the ghost teachers practice. The Fairness Center, a free legal service that represents employees with cases against unions, has two lawsuits making their way through the courts targeting ghost teachers in the school districts of Philadelphia and Allentown. Last year a judge ruled that the first lawsuit, filed in Philadelphia County Court, “lacked sufficient facts to support the case,” but the Fairness Center intends to appeal the ruling.

“Unfortunately, this ruling perpetuates the PFT’s abusive ‘ghost teacher’ scheme and turns a deaf ear to the voices of Philadelphia teachers,” said David Osborne, general counsel for the Fairness Center. “The PFT is intent on making teachers’ jobs even more difficult by raiding the classroom as a means to staff union offices. Teachers, students and taxpayers are harmed when union leaders are allowed to take school district employees out of the classroom for decades, even while they receive all incidences of district employment.”

In Allentown, the cash-strapped school district has dished out more than $1.4 million in public funds since 1999 to pay the salary of the president of the Allentown Education Association, the local teachers union. In response, the Fairness Center is bringing a lawsuit on behalf of Allentown taxpayers Steven Ramos and Scott Armstrong to end the practice of allowing the AEA president to work full-time for the union while drawing a salary and benefits from taxpayers.

“It’s absurd that Allentown taxpayers are being forced to pay a union employee’s salary along with health and pension benefits,” Ramos said in a statement. “How many students could be educated with the more than $1 million the district has given to a private organization? This misuse of public money must end.”

The lawsuit, however, didn’t stop the Allentown Board of School Directors from forging ahead and approving a new teachers contract that keeps the practice of using ghost teachers intact. Out of the eight-person board of directors, only one voted against the contract, citing concerns over the release-time provision that continues to divert public funds away from classrooms.

In response to Watchdog’s reporting on the issue, Pennsylvania lawmakers in both the House and Senate have taken legislative action to try to end the practice. The latest attempt on this front is SB1140. Recently introduced by Sen. Pat Stefano, R-32nd district, it would ban the practice of using ghost teachers across the entire state.

“During an era of tight budgets and taxpayer concerns over increasing education costs, it is imperative that teachers on a school district’s payroll actually be in a classroom, teaching students,” Stefano said. “By banning this provision in collective bargaining agreements, this legislation will ensure a more effective use of public school resources and funds.”

A similar bill, HB1649, was introduced in the House last year by Reps. Kristin Phillips-Hill, R-York, and Jim Christiana, R-Beaver/Washington, but it is still awaiting action in the House Education Committee.

“This measure will close a loophole that allows public school teachers to take leave from the classroom and work full-time for their union while they continue to earn salary, benefits, accrue seniority and time toward their pension,” Phillips-Hill said. Her office also noted that Watchdog’s reporting on the issue provided a “starting point” for crafting the bill.

Read the full series of stories and stay up to late with the latest news about Pennsylvania’s “ghost teachers” at Watchdog

Accountability beyond the horse race

Tuesday, March 22nd, 2016

Nicole Neily headshot1A word from our new president:

It’s my pleasure to officially introduce myself to you as the new president of the Franklin Center for Government and Public Integrity. It’s a great honor and privilege to take the helm from Erik Telford, and to continue leading Franklin in the pursuit of bringing accountability and transparency to state and local governments. I’m excited for the challenge and look forward to seeing what the future has in store for the Watchdog team.

When I was first asked to consider becoming the next president at Franklin Center, I immediately knew that this was just the opportunity I’d hoped to find: an organization that would enable me to both stand up for a free press and to expand the free market principles that I’ve promoted throughout my career. The timing couldn’t be better: as smaller legacy media outlets recede with the digital evolution of the news industry, our mission here at Watchdog is more important than it has ever been. The national media is preoccupied with covering the presidential horse race, but we still desperately need an informed citizenry committed to keeping government accountable – regardless of who’s up or down in the polls.

Rest assured I will do the best I can to not just continue but to grow the excellent work of the investigative journalists here at Watchdog. Their stories expose threats to our freedom and provide a valuable alternative to the narrative perpetuated by the legacy media at both the national and local level. Given the talented staff we currently have in place at Watchdog and the fact that outgoing president Erik Telford has joined our board of directors to provide ongoing support and leadership, I’m confident that Franklin’s best days are ahead!

In Liberty,

Nicole Neily
President