Texas Watchdog spurs investigation into UT admissions scandal

Wednesday, June 24th, 2015



The story of the University of Texas admissions scandal began nearly two years ago in a dire place. Wallace Hall, a Gov. Rick Perry appointee to the University of Texas Board of Regents, was about to be impeached for ethics violations, charges driven by University of Texas-Austin President Bill Powers.

Twenty months later, Bill Powers has resigned in disgrace and Wallace Hall is a hero in Texas. But what was the catalyst for change? It took great courage on Hall’s part to take a stand for integrity, but the story’s narrative did not change in his favor until Watchdog Texas bureau chief Jon Cassidy got involved.

When Cassidy started covering the story, Wallace Hall was being railroaded by the media, the university, and the legislature. As Hall blew the whistle on influence peddling at the university’s law school, he was accused of requesting documents frivolously, of making wild accusations, and even of trying to destroy the university, when in fact, as Cassidy would go on to prove, Hall was right. A bipartisan group of legislators had for years been using the UT admissions process as their own spoils system. Wallace Hall threatened that privilege.

Cassidy profile picCassidy (pictured, right) went to work developing sources in the legislature and the university. He began with a simple hypothesis – simple but difficult to prove: if he could identify students who were underqualified for admission into the prestigious school but who were admitted anyway, he could locate how each one was connected to the influence-peddling scandal. He built a database that tracked over a decade’s worth of academic data from students admitted to UT and traced the individual students who later performed poorly on the Texas Bar exam. Then he found the smoking gun: documents that linked each under-qualified student to a powerful lawmaker or state official.

A subsequent investigation by Kroll Associates into UT admissions standards confirms Cassidy’s findings, but “just like it took a judge to break Watergate wide open,” he wrote, “UT’s malfeasance may not be thoroughly exposed without a judge taking an active interest in the case.”

The outcome of Cassidy’s work speaks volumes. It became the evidence that other media – and eventually an official state investigation – relied on. He also proved that Bill Powers had been complicit with all this and that he was part of a well-established system of admissions corruption. Other media in Texas, forced to confront the truth, have called this one of the biggest admissions scandals in U.S. history. They’ve called Jon’s work a “tour de force” and have said that without him none of this would have ever come out.

“There are no longer two sides to the University of Texas admissions scandal story,” wrote Cassidy in a potent summary. “This long and tangled affair has become a very simple matter: either you favor accountability or impunity, honesty or secrecy, oversight or cover-up.”

And the best proof that Cassidy’s work has made a difference? One of the state lawmakers who found herself in Cassidy’s crosshairs pushed back hard against legislation that offer Jon and other reporters like him of more access to government documents and the protections of press freedom. There could hardly be better evidence that he has done his work well – an elected official wants to shut him down by force of law.

Click here to read the full “Trouble in Texas” series at Watchdog.org

SolarCity: Elon Musk’s empire of government subsidies

Tuesday, June 9th, 2015


Tech entrepreneur Elon Musk is not subtle about his business strategy: follow the government money.

That’s the conclusion, at least, of a recent article in the Los Angeles Times investigating how the businessman of SolarCity, Tesla, and SpaceX fame has built his multibillion-dollar fortune through companies that have benefited from an estimated $4.9 billion in government subsidies.

Politicians love latching on to the SolarCity, Tesla, and SpaceX brands, which promise to lead the way into a greener future. The result is dependence on a slew of government incentives, “including grants, tax breaks, factory construction, discounted loans and environmental credits,” reports the LA Times, adding that “it also includes tax credits and rebates to buyers of solar panels and electric cars.”

It’s gotten so egregious that states are actually competing to give Musk’s companies money, according to Musk biographer Ashlee Vance. “As his star has risen, every state wants a piece,” she said.

The story goes on to list some of the most egregious examples. The state of New York will spend $750 million to help SolarCity build a solar panel factory in Buffalo, which the company will lease for $1 a year and pay no property taxes on for a decade. And on the federal level, the Treasury Department has doled out almost half a billion dollars in direct grants to SolarCity.

Tesla, meanwhile, recently secured an agreement with Nevada to build a huge battery factory in Reno that includes $1.3 billion of incentives. In its home state of California, the company has made $517 million by selling environmental credits to other automakers, which must purchase credits from the state and federal government if they don’t sell enough zero-emission cars.

Hedge fund manager Mark Spiegel offers a devastating summary to the LA Times: “Government support is a theme of all three of these companies, and without it none of them would be around,” he said. Spiegel is betting that Tesla’s stock will fall, even though it has more than doubled over the last two years.

This raises a number of important questions for the taxpayer. How much longer will the public largesse continue? Will these companies survive without government subsidies? And even if they do, will the public ever recoup the value of the alleged benefits these green technologies will bring?

Readers who have been following SolarCity at Watchdog, however, shouldn’t be surprised by the LA Times’ findings. Watchdog reporter Tori Richards has written a series of stories over the past year that help fill in the picture of the Musk empire’s dependence on taxpayer funds.

In November of last year, for instance, she reported that SolarCity stock has soared since it went public, even though a company report admitted that business would be difficult to maintain without government help.

“If, for any reason, we are unable to finance solar energy systems through tax-advantaged structures … we may no longer be able to provide solar energy systems to new customers on an economically viable basis,” it said.

Even with the help of $244 million in federal grants , SolarCity posted losses of $55 million in 2013, and was running a $166 million deficit at the time. This year, it doesn’t appear much has changed as the government has continued to prop up the solar industry – most recently through an extra $32 million in funding from the Department of Energy.

More recently, Richards covered Congressional leaders’ calls to end the “potentially deceptive sales tactics” of companies like SolarCity that use a zero-down, 20-year lease business model. Congress’ attention was drawn to solar companies by consumer complaints that their solar panels weren’t bringing them their promised savings. As Richards reported, many customers, such as northern California resident Jeff Leeds, have found themselves locked into costly deals thanks to under-producing solar panels on top of their homes. Leeds later received a notice from his bank informing him that SolarCity had placed a lien on his home, which held him up from closing a loan to buy another house.

Richards’ coverage of SolarCity’s $750 million plant deal in Buffalo found that many of the details of the contract were confidential – even though public money is at stake and the contract was acquired through a Freedom of Information request. State officials claimed the redacted portions of the contract protected trade secrets.

For now, Musk’s companies have “a great strategy, but the government will cut you off one day,” warns Dan Dolev, an analyst at Jefferies Equity Research.

If and when those government funds dry up, don’t say we didn’t warn you.


Digging deeper: plenty of citizens share news, but why don’t they create it?

Monday, June 8th, 2015


Inscribed over the main entrance to the Nebraska State Capitol is a saying taught to philosopher Hartley Burr Alexander by his father: “The Salvation of the State is Watchfulness of the Citizen.”

Alexander’s quote captures the bedrock philosophy of the Franklin Center and our journalism team at Watchdog.org. It is vital to have professional investigative journalists on the beat, but their stories only make a difference to the extent that citizens read and respond to them. As we discussed here last month, local news still matters to most Americans in the digital age. That post focused on a recent Pew study of the news consumption patterns of three small- to mid-sized American cities. In a follow-up blog post on that report, Pew researcher Jesse Holcomb has taken a deeper look into the study’s findings about citizen engagement in the news process. His conclusion is mixed: “News audiences spread the word, but few get involved in local journalism.”

“To what extent is the public directly engaging in acts of journalism?” Holcomb asks. Its case studies of Denver, Macon, Ga., and Sioux City, Iowa – along with previous research – suggest it’s a “small but measurable share.”

In all three of these cities Pew found that residents were much more likely to share news online than to actually post or submit news themselves. Sharing was highest in Denver, where just over half of residents had shared a news story through a digital channel like email or social media in the past year. A smaller but still significant portion of respondents in Sioux City (40 percent) and Macon (36 percent) also shared news digitally. However, the report found that “no more than one-in-ten residents of each city had submitted their own local news content to a news outlet or website.”

shutterstock_155584379This is consistent with a similar survey Pew conducted last year, Holcomb noted, which found that “half (50%) of U.S. adults who are social-network users share or repost news stories, videos or images. But fewer post photos (14%) or videos (12%) that they themselves took of a news event.”

Obviously it is easier to share news stories than to produce your own original reporting. But thanks to advancements in mobile technology, the barriers to producing original news content are coming down. The Pew article points to new video streaming apps such as Periscope and Meerkat that will allow laypeople to easily distribute news. Even with these powerful new tools, however, this obviously still requires citizen journalists to have the news savvy to be in the right place at the right time so as to have information that has genuine news value.

In any case, Holcomb notes, it’s clear from these findings that “at least on one fundamental level, the public clearly plays a large role in the local news ecosystem.” More than a third of Macon’s residents (37 percent), for example, get local news from friends and neighbors. That’s just as many as those who rely on their daily newspaper (36 percent). The balance is similar in Denver. In Sioux City the daily newspaper still holds a more central role among residents, but getting news from others in the community still comes in as a top-three source for local news.

What does this mean for you? The report’s findings have two major implications. The first is simple: share important news stories! Another Pew study from 2011 found that 55 percent of adults said they got news and local information through word of mouth at least weekly. Tell your friends and family about big stories you’ve read and share them online. With the rise of social media sites like Facebook and Twitter, every individual can have at least a small voice and platform.

Second, part of the beauty of America’s free speech protections is that ordinary citizens have the freedom to report news from their own perspective – providing you take initiative, put in the hard work, and stay truthful. To learn more about how you can become a citizen journalist in your community, check out our citizen stories at Watchdog Arena, and download our free Video Tipsheet for advice on capturing newsworthy moments from politicians, public meetings, protests and more.

Help us deliver better news to you by completing our quick survey

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What can we do about the decline of local news?

Friday, May 29th, 2015

newspapers vertical stack

Last week on NPR, outgoing CBS anchorman Bob Schieffer (pictured below) was asked about the biggest threat to the future of journalism. His answer spoke volumes about the precarious state of traditional journalism today:

“Unless some entity comes along and does what local newspapers have been doing all these years, we’re gonna have corruption at a level we’ve never experienced,” he said. “Because there’s nobody — so many papers now can’t afford to have a beat reporter.”

Both anecdotal experience and the latest studies on the value of newspapers confirm Schieffer’s observation. Washington Post blogger Chris Cillizza noted that just in the past two weeks, the Louisville Courier-Journal closed its D.C. bureau, and in Montana, the company that owns the state’s five biggest newspapers shut down its Helena statehouse bureau.

Bob SchiefferMeanwhile, a new Pew report catalogs the sharply declining value of U.S. newspapers. As the Washington Examiner wryly summarizes, it is “short and very unsweet.” Last year alone, for example, three different media companies decided to let go of more than 100 newspaper properties – largely to protect their digital and broadcast divisions, which continue to be robust. The numbers are devastating, but given that weekday circulation has dropped 17% and ad revenue has declined by more than 50% over the past ten years, should it really come as a surprise?

Amazon founder Jeff Bezos’ purchase of The Washington Post last year for $250 million is a small bright spot, but for other papers of record the road ahead looks rough. For example, the Boston Globe, Philadelphia Inquirer, Chicago Sun-Times, and Minneapolis Star Tribune all have seen their values plummet by hundreds of millions of dollars in the past two decades and (with the exception of the Boston Globe) filed for bankruptcy.

Scheiffer goes on to summarize what this decline of local news looks like on the ground:

“Many papers don’t have a city hall reporter anymore. They send somebody to cover the city council meetings, but to cover city hall, you have to be there every day and you have to know the overall story, not just report whatever happens on a particular day.

In light of this trend, we at Watchdog are interested in hearing from you about how to accomplish our mission of providing quality investigative journalism at the state and local level.

Help us deliver better news to you by completing our quick survey

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Police took $4.1 million from motorists and built a police station: Watchdog covers civil asset forfeiture

Wednesday, May 27th, 2015

Richland PD sign civil forfeiture

What’s the deal with the Richland’s new police station?

At first glance, residents of Richland, Mississippi were probably thankful for their new $4.1 million police station, complete with a top-level training center and a fleet of black-and-white Dodge Charger police cars, especially with the sign announcing that funds for it were “tearfully donated by drug dealers.” It seemed like a win-win. After all, who could argue against money from bad guys going to keep us safe?

Mississippi Watchdog reporter Steven Wilson, however, took a deeper look at the Richland Police Department, and uncovered a much different story behind the new station. While much of the money may have come from drug dealers, it was acquired through a much more controversial practice: civil asset forfeiture – property and cash seized from during traffic stops from motorists on the mere suspicion that they had committed a crime – no conviction necessary.

The sheer egregiousness of the practice launched Steve’s story up the ranks of top posts to reach the number two spot on Reddit, the “front page of the internet,” where nearly 6,000 readers upvoted the story and more than 3,000 commenters chimed in, driving tens of thousands of readers to learn about the huge forfeiture numbers racked up by Richland’s four-officer interdiction team, whose total civil forfeiture collection averages out to $72 per resident of the small town.

Watchdog Opinion contributor Logan Albright explains how civil asset forfeiture works: “If police or federal agents suspect that property has been involved in the commission of a crime, they can simply take it. No charges need be filed against the property owner, no trial must occur. In effect, the property itself is accused of a crime, and it’s up to the owner to prove its innocence if they ever wants to see it again.”

A long list of abuses

This story is hardly an isolated incident. Last year in Philadelphia, for example, Chris Sourovelis and his family lost their home after his son was caught by police selling $40 of heroin – a punishment that hardly seems commensurate to the crime. Reporting on the case exposed some of the worst aspects of Philadelphia’s civil asset forfeiture program, showing how the city’s police department and district attorneys’ office regularly seizes homes, cars and other property from suspected criminals without any conviction. In some cases this even took place without any charges being filed.

shutterstock_25312519At the federal level, many innocent business owners have been targeted by the IRS through civil asset forfeiture laws, such as the Hirsch family from Long Island, NY, who own a distribution company. They had more than $446,000 in assets and cash seized by the Internal Revenue Service in 2012, even though they were never charged with a crime. The federal government eventually dropped its case against the Hirschs, but it took nearly three years of legal battles for them to get their money back.

The issue has been steadily rising in the national consciousness lately, thanks to efforts by civil rights advocates and in-depth investigations by prominent mainstream publications like The New Yorker, The Washington Post, and The New York Times. It doesn’t take much political savvy to understand why civil asset forfeiture inspires activists and strikes a nerve with readers. The practice runs counter to many Americans’ sensibilities about property rights and the principle that citizens should be presumed innocent until proven guilty. It has its legal origins in British maritime law in the mid-1600s and first came into use widely in America during the Prohibition years, when police used it to seize cash and property from bootleggers. Since the war on drugs escalated in the 1980s, law enforcement has revived civil asset forfeiture to crack down on drug trafficking, and the practice has become steadily more lucrative. Justice Department seizures from a single program, for example, have risen from $407 million in 2001 to $4.2 billion in 2012.

The movement for reform

As more voters and the lawmakers who represent them become aware of civil asset forfeiture, proposals to reform the system have received substantial support from across the political spectrum. Two states that have passed reform this year, for example, have done so overwhelmingly despite having politically divided statehouses and governors.

Earlier this year New Mexico’s legislature unanimously passed a bill making significant reforms to its civil asset forfeiture laws, and it was signed into law by Governor Susana Martinez – a former prosecutor – in April. The state now requires a criminal conviction before property can be forfeited, proceeds from forfeitures will go into the general fund (rather than to local law enforcement budgets), and property owners have better due process protections such as a codified “innocent owner” presumption. New Mexico

In Montana, the Republican-dominated statehouse and Democratic governor Steve Bullock joined together in April and May to pass House Bill 463. Similar to reform in New Mexico, the law requires a criminal conviction before property can be forfeited, and it requires police to provide “clear and convincing” evidence tying the property to criminal activity for them to keep it. The Montana law does not go so far as to divert forfeiture revenue into a general fund, however.

The broad support for reform in these states suggests that for the rest of the country, one of the greatest obstacles to reform is ignorance. Watchdog stories are helping to change that though, and legislative efforts are underway elsewhere in the country.

In Virginia, a bipartisan group of lawmakers are leading an effort to curb the police’s ability to seize cash and property from innocent citizens. In Pennsylvania, lawmakers have begun calling for changes to the civil asset forfeiture system so that the “innocent until proven guilty” principle applies to law enforcement looking to take people’s property. And in Wyoming, the senate has supported civil asset forfeiture reforms with a decisive 80-9 vote on SF14. The measure was shot down by Republican Gov. Matt Mead, the legislature may consider updating the measure’s reforms to make them more agreeable to Gov. Mead.

Pick your headline: Chris Christie spends $300K on food and booze

Wednesday, May 20th, 2015

Sometimes, a news story breaks that transcends the conventional boundaries of political parties, culture, ideology, interests, and even parody. It’s the story that gets a reaction from news outlets as diverse as DRUDGE REPORT, Gawker, USA Today, The Huffington Post, Bleacher Report, and everyone in between. It’s the story that simply must be shared, the one you tell your friends about, the one that gets all the talking heads, well… talking.

Last week, that story was a New Jersey’s Watchdog analysis of spending records that revealed that New Jersey governor Chris Christie has spent more than $300,000 on food and alcohol during his five years as governor – including more than $82,000 to Delaware North Sportservice, which operates concessions at MetLife stadium where Christie often attends NFL games. Traditionally MetLife allows him to use the luxury boxes at the games for free, but he has to pick up the tab for food and beverages.

The money comes out of Christie’s annual $95,000 expense allowance, which he receives in addition to his annual $175,000 salary. Christie returns surplus funds to the state each year, but Treasury officials say he does not submit receipts or accounting for the public monies he spends.

The governor’s press secretary was quick to respond with a statement, which explained that “The official nature and business purpose of the event remains the case regardless of whether the event is at the State House, Drumthwacket or a sporting venue.”

It’s also important to note that the spending at NFL games took place during the 2010 and 2011 seasons. The following year, in what appeared to be an attempt to save political face, the New Jersey Republican State Committee reimbursed the state for the football spending, so taxpayers ultimately were not on the hook for it.

You can’t undo the past, however, and if you do the math, the fact remains that Christie spent on average more than $2,500 a game on  concessions.

SL sign of the apocalypse

Watchdog in Sports Illustrated

More than 100 websites and news outlets picked up the story, with reactions ranging from subtle criticism to downright outrage. Here are a few of the highlights:

“Let he who has not spent way too much of other people’s money on beer and nachos cast the first stone,” quipped Buzzfeed.

“Chris Christie, I salute you: It takes skill to spend $82,000 on snacks!” read the Salon headline. “New Jersey Gov. Chris Christie’s spending may have been despicably wasteful, but it’s also impressive!”

Multiple accounts of the story, such as the Daily Caller‘s coverage, noted that Christie’s food spending dropped sharply at the same time as his own efforts to lose weight, with his monthly food spending dropping by 40 percent since he underwent Lap-Band surgery.

The Washington Post covered the story as a guilt trip by listing ten other things Christie could have spent $82,000 on, such as a block of Jersey Shore boardwalk rebuilding, a year’s household income for the average New Jerseyean, or three years of tuition at Rutgers.

The lede in the New York Times highlighted how Christie’s big personal spending clashes with his conservative rhetoric: “Gov. Chris Christie of New Jersey likes to point out how he has made big cuts to state spending. But when it comes to using his allowance money as governor, he appears happy to be a high roller.”

Forbes echoed this sentiment: “One of the major policy tenets of the Republican Party is limiting government spending. But New Jersey Gov. Chris Christie, considering a run for the presidency in 2016, may not have gotten that memo yet.”

“We assume that $82,594 amounts to roughly seven beers and one soda in NFL stadium prices,” National Journal jibed. “While there’s nothing to suggest that the concessions spending was improper, especially since it was paid back to the state, it shows just how much Christie is willing to spend on football, or have spent on his behalf.”

Even the satirical Onion couldn’t resist taking a shot. “Impressive, but I’m still not sure he’s ready to misallocate funds at the presidential level,” wrote a fictional respondent.

At the end of the day, thanks in no small part to the sheer irony of the headline, the story turned into a huge media dogpile, thrusting Watchdog into the center of the national conversation. For Mark Lagerkvist and all the other reporters at Watchdog, it’s a refreshing reminder that substantive investigative journalism and viral internet stories do not need to be mutual exclusive things. And it’s an encouraging example of how audiences across the political spectrum – and even those who don’t closely follow their government and elected officials – can into a story that holds elected officials accountable for frivolous, freewheeling spending.

The changing landscape of local journalism: Pulitzers in PR and nonprofit news

Wednesday, May 13th, 2015

By Erik Telford

If you haven’t read about the 143-year-old-newspaper that went out of business or the reporter whose work exposing corruption and cronyism in a local school district was recognized with a Pulitzer Prize – but sadly only after he’d left for a job in PR, chances are it’s probably because your local newspaper doesn’t have the resources to cover these kinds of stories anymore. As traditional modes of journalism struggle to stay in business and more and more journalists leave the profession, citizens are at risk of losing one of their biggest allies in the battle to keep government and public officials accountable.

Since 2005, local newspapers in the U.S. have laid off one-third of their reporters, and since 2000 they have reduced state and local reporting output by 80 percent. Between 2003 and 2014, the Pew Research Center reports that the amount of newspaper reporters assigned to state capitol buildings has declined by 35 percent. Pew also found that in 2014 less than a third of U.S. newspapers assigned reporters to statehouses. Two of the biggest players in print journalism, The Washington Post and the New York Times, have even abandoned hyper-local reporting projects.

For some newspapers, cutting budgets isn’t enough.

Just last month the Toledo Free Press, a paper with a circulation of 72,000, announced it was ceasing operations after 10 years in the business. Much older papers are also feeling the crunch. In 2012, the Manassas News & Messenger, a newspaper that has been in circulation since the Reconstruction Era, went out of business. Its owners, BH Media Group (a subsidiary group of Warren Buffet’s Berkshire Hathaway), stated that the paper suffered from too much “negative financial momentum” and was no longer viable in a digital world.

shutterstock_23792455It’s not just that newspapers are closing up shop. It’s that good journalists are leaving the field entirely.

Last month, Rob Kuznia was one of three journalists at The Daily Breeze, a small newspaper in southern California, who was awarded a Pulitzer Prize for reporting on the widespread corruption within the Centinela Valley Union High School District. Today, instead of uncovering more cases of government corruption and saving taxpayers money, Kuznia is out of journalism and working in public relations.

According to Kuznia, his departure from journalism was because it was simply too difficult to make ends meet working in the newspaper business. It’s no surprise that Kuznia left the sinking ship of print journalism for a career in public relations—the pay gap between PR specialists and journalists is almost $20,000.

You know your industry has a problem when even those at the top of the field are leaving it.

The void in state and local government reporting is not driven entirely by a lack of consumer demand—local news usually ranks as the top priority of people surveyed— it’s that the economics of making a profit with local news in the digital era are difficult.

That’s where nonprofit journalism outlets are filling in the gap and playing a significant role. Groups like the Franklin Center for Government and Public Integrity and Watchdog.org not only employ journalists that report on state and local issues, but they also train citizen journalists to keep their local governments accountable. Social media and smartphones have allowed citizens to become journalists in their own communities. The digital age has shown that it has the potential to make journalism better worldwide; in Russia and Spain, citizen journalists have helped uncover massive cases of corruption and electoral violations by public officials. Here in the U.S., Watchdog.org citizen jounalists frequently break stories which challenge public officials and hold them accountable. Recently, Texas citizen journalist Lou Ann Anderson uncovered that Texas Representative, and Public Education Committee appointee, Don Aycock’s daughter was a prominent education lobbyist in the state. Anderson’s report on the conflict of interest was picked up by the local paper and national news outlets, forcing Rep. Aycock’s daughter to resign from her lobbying job.

Many of the greatest threats to freedom and most egregious cases of corruption occur at the local level. Public officials at all levels of government need to continue to be held accountable, and we can no longer rely on traditional journalism outfits to do that. Not when newspapers are closing up shop and Pulitzer Prize winners are switching to PR.

Local news in the digital age: it still matters!

Wednesday, May 6th, 2015

Shutterstock image

The Pew Research Center recently completed an in-depth study exploring the radically changing landscape of local media. The report focused on three different cities of varying size and demographics: Denver, CO; Macon, GA; and Sioux City, IA. The report is quick to note that its findings should not be extrapolated to the rest of the country, but rather seen as three case studies through which we can gain some insight into how Americans value and consume local news.

The value of local news

The first and most important finding from the Pew study is that even in our globally-connected world, Americans in these cities still deeply value local news, with almost 90 percent saying they follow local news closely and half following it very closely.

Additional findings from the study paint a picture that is neither decisively favorable nor unfavorable to the state of local news. Clearly, citizens are involved and invested in their communities and care about the news, but for many, their media consumption is narrow and shallow.

Most respondents said they did not get their local news from their main daily paper. Forty percent of Sioux City residents said they got their news from their main daily, 36 percent in Macon, and just 23 percent in Denver. This corresponds inversely to digital engagement. In Denver, which has the highest rate of broadband access among the three cities, residents are five to ten percent more likely to say the Internet is very important in keeping up with local news. That said, digital access is fairly strong across the board, with 68% of Denver residents, 66% in Macon and 56% in Sioux City accessing at least one local news provider digitally.

shutterstock_241933117In spite of the rapid growth of online news, television remains the dominant news source, especially in markets with fewer alternative news outlets like Macon and Sioux City (Denver’s 140 news providers are about two and a half times as many as Macon and Sioux City combined). Two thirds of people in these latter two cities rely on local TV for news, whereas Denver clocks in at a bit less – 58 percent.

Citizen participation

In each city, direct participation in the news process is fairly equal. About 10 percent have called in to a local TV or radio show in the past year, and about 20 percent have commented on a local news blog. When it comes to speaking with a reporter, the numbers diverge more between cities. Sioux City residents are nearly twice as likely as a Denver resident to have spoken with a journalist, 29 percent versus 16 percent, while Macon is right in the middle at 23 percent.

The numbers look a little less positive, however, when it comes to direct citizen engagement. Fewer than 10 percent of respondents in any of the three cities have submitted content to a local news provider in the past year. Twenty percent of local news stories in Denver, 13 percent in Sioux City, and 18 percent in Macon featured at least one citizen source, but stories with citizen bylines were extremely rare – fewer than one percent in any city.

One encouraging finding is that many people appear engaged in important issues that affect their lives, with at least four-in-ten in every city saying they frequently talk about local government, politics, and the economy.

What does it mean for journalists?

What should we take away from this study? For the Franklin Center, it highlights both the value and the relevance of our state- and local-focused journalism. Clearly, a huge segment of Americans still care about what is happening in their communities, and they depend on local news outlets to bring them stories that hit closest to home. True impact journalism doesn’t cover unrelatable policy debates in D.C., hundreds of miles away from Main Street. Instead, it shows how those government agencies and programs impact you and your neighbors, and it seeks to shine a light on abuse and overreach when those institutions betray the public trust.

The low citizen engagement seen in the Pew report means we still have a lot of work to do. More citizen bylines and citizen-supplied content would almost certainly make local news more engaging, substantial, and impactful. Politicians always try to at least appear like they can connect with and understand the average citizen, and the press should strive to do the same, speaking to readers in an engaging way that reflects the interests of the typical taxpaying citizen. One of the best ways they can do this is by involving citizens more directly in the newsmaking process. That is the chief focus of the Franklin Center’s citizen team, Watchdog Arena, which has empowered citizens to spark debates and effect change through the power of the press.

To learn more about how you can become a citizen journalist in your community, check out our citizen stories at Watchdog Arena, and download our free Video Tipsheet for advice on capturing newsworthy moments from politicians, public meetings, protests and more.

Counting the Kemper costs: Mississippi’s travails with “clean coal”

Wednesday, April 29th, 2015


By XTUV0010 (own work) via Wikimedia Commons

It’s a boondoggle of football stadium proportions – or sports cars, fighter jets, or just about any other absurdly expensive item you can imagine.

Mississippi’s Kemper Project is a first-of-its-kind integrated-gasification power plant designed to fulfill the growing need for electricity in the Magnolia State. Extolled as a great technological leap forward, it functions by converting lignite coal to natural gas-like synthesis gas, which fire its 582-megawatt turbines. Its appeal lies in its Holy Grail-like prospects of burning “clean coal,” because it captures and stores carbon much better than traditional coal-fired plants.

Reality, however, hasn’t delivered on the advertising’s glowing promises. Since its inception, news about the Kemper Project has mostly been a one note tune: costs have increased again. And again. And again. And again.

Mississippi Watchdog reporter Steve Wilson, who has been following the Kemper Project story for more than a year now, ticks off a laundry list of disconcerting facts along these lines. The clean coal plant has increased in cost by more than 70 percent over its initial projections and is two years behind schedule – due in part to delays and government regulations. It is held up as an example for future coal power plants, but the dirty little secret is that currently it does not work – and might never work. Unfortunately, it is the rate payers for Mississippi Power, the utility that built the plant, who have been saddled with 18 percent rate increases to pay for the plant’s $6.175 billion price tag. That makes it one of the most expensive power plants per kilowatt in the country.

As a reference point, the facility’s original cost when construction was approved in 2010 was $2.4 billion. For a price tag comparable to the Kemper Project’s current cost of more than $6 billion, Mississippi could have built a pair of nuclear reactors – a proven, mature technology – capable of generating four times as much power.shutterstock_158535314

“This story is a classic example of the dangers of a ‘public-private partnership,’” said Wilson. It has its origin in the U.S. Department of Energy awarding Mississippi Power a sizable grant to build a first of its kind plant. The technology, however, hadn’t been proven to work and was bound to be expensive, so Mississippi Power decided to use a system of rate increases on its customers to pay for the rest. Just how much of the costs ratepayers will absorb is still a matter of controversy. Currently a cap on Kemper Project power plant construction costs is still in effect, meaning theoretically Mississippi Power can’t raise rates and cite the $6.2 billion plant as the reason. Mississippi Power, however, is arguing that under state law, the Mississippi Public Service Commission and the Legislature can authorize increases that exceed the cap of $2.4 billion.

“The worst thing for the company’s ratepayers is that it’s not like they can go elsewhere for their electricity, so they’ve been hit with the bill for a plant that is way over budget and not even proven to work,” said Wilson.

Based on Watchdog’s series of stories on the Kemper Project, it is apparent that so-called clean coal doesn’t work and that the Department of Energy’s investments in the technology have so far been wasteful and misguided. Trying to convert coal into natural gas (which is basically what the gasifier does) is hard to justify in terms of cost when you can already get natural gas out of the ground inexpensively. “Plus, the product of the gasifier (synthesis gas) actually has a lower energy content than natural gas, so you’re expending a great deal of time, effort and ratepayers’ money on a technological dead-end,” said Wilson.

The fact that there are only a handful of similar plants – most much smaller than Kemper’s – is evidence itself that the process isn’t economically appealing and certainly doesn’t reflect the will of any sensible ratepayer.

“If these coal gasification plants worked so well and natural gas was as expensive as Mississippi Power claimed it’d be when the plant came on line, there would be more of them,” Wilson said. “But as it is, turning coal into basically inferior natural gas is an energy-intensive science project.”

Few stories by the local media probe beyond surface-level coverage of the many cost increases to the Kemper Project, which has risen more than half a billion dollars in the past nine months alone. Wilson’s coverage has been instrumental for citizens seeking to understand the issue by painting a more complete picture.

“They don’t explain the why and that’s where Watchdog.org fills the void,” he said. Anyone who pays a power bill in South Mississippi is well aware of the impending rate hikes. They surely aren’t happy about it, and ought to be informed about the reasons for the hikes.

Electricity bills, however, are only the beginning of the story. “Eventually, more local businesses will have to pass these increased costs onto consumers served by Mississippi Power,” Wilson said. “Local governments will be affected as well, dealing with an added cost beyond their control.”

If and when they do, Mississippi Watchdog will be there to make sure the story is told.

Think you’re finished paying your taxes? Not so fast.

Friday, April 24th, 2015


“A century ago, the income tax form was a single page,” writes Watchdog Arena contributor Peter Ingemi, but “today the tax code has become increasingly complex to the point where very few people actually do their own taxes.” In fact, a recent survey found that most Americans get an “F” in their understanding of income tax basics, scoring an average of 51 percent on a ten-question quiz.

We may have solved the problem of taxation without representation in 1776, but “it has been replaced by something almost as bad and nearly as destructive: taxation without understanding,” Ingemi quipped.

This is only the tip of the iceberg when it comes to the mess that is the American tax system. Granted, it may not seem like that big of deal that most people don’t really understand the tax code when they can use a computer program like TurboTax or hire an accountant. But to send your taxes off to an expert or computer is to concede that you don’t understand precisely how much you’re paying Uncle Sam – and why. It also means sacrificing a substantial amount of time (or money) to work your way through all the forms. Estimates of how long it takes to do an average individual return range from eight to almost 12 hours, and total tax compliance costs for the country are estimated to be as high as $182 billion. If you are “fortunate” enough to get a refund, don’t celebrate too much; it just means the government has been taking your money all year as an interest-free loan.

In the end, this widespread public ignorance makes it all the easier for government to collect and spend ever more money in ways unbeknownst to the typical taxpayer.

Image courtesy of Tax Foundation.

What can the average citizen do to start making sense of it all? The journalists and citizen contributors at Watchdog believe the first step toward understanding the present situation of our tax system is to realize just how much Americans are taxed. Every year the Tax Foundation releases a report that calculates America’s Tax Freedom Day, the point in the year at which the nation as a whole has earned enough money to pay off its tax bill for the year. This year, Tax Freedom Day falls on April 24th, which is 114 days – or 31 percent – into the work year. It’s also a day later than last year. When all federal, state, and local coffers have been filled, Americans will have paid a grand total of $4.85 trillion in taxes, according to the Tax Foundation report. That’s more than they will spend on food, clothing, and housing combined.

But that’s not all; it gets worse. As Watchdog Opinion contributor Kathryn Hickok pointed out, when you include annual federal borrowing in that calculation (which we will eventually have to repay anyways), Tax Freedom Day falls back another two weeks to May 8th.

You can find where your state ranks on this map. If you live in Nevada, Pennsylvania, Wisconsin, Oregon, or Virginia, Watchdog writers and contributors have written a more in-depth analysis of their state’s ranking and what it means for you.

Want to learn more? Get the latest news about how government is spending your tax dollars at Watchdog.org