June 29, 2012

Stock trades may show Obamacare leak from Supreme Court

The Supreme Court’s stunning rejuvenation of the Obamacare mandate into a new tax didn’t leak to Washington D.C. insiders — but it appears that it may have leaked to yet-unknown Wall Street investors.

In a brief 10-minute period starting at 9:32 a.m., the stock value of the nation’s largest hospital chain, HCA Holdings Inc., jumped from $26.81 per share to $27.53 as bidders bought several hundred thousand shares before the court made its announcement just after 10 a.m.

The bidders who snatched up shares before the announcement made a gain of roughly $2 a share once the price rose again after the court officially announced its backing for the law.

The bidding and the price jump came more than 30 minutes before Chief Justice John Roberts read his unexpected decision from the bench.

At roughly 10:06 a.m., Roberts announced that the law was constitutional, providing it was reinterpreted as a tax increase.

In 2010, the law was passed by Congress and signed by President Barack Obama as a federal mandate on personal conduct — not as a tax.

Had the court struck down the law, the hospitals’ stock price would likely have fallen — costing the secret buyers much of their cash — because the hospitals stand to gain revenue from the Obamacare law.

June 28, 2012

What You Don’t Know About the ‘Fast and Furious’ Scandal

In the annals of impossible assignments, Dave Voth's ranked high. In 2009 the federal Bureau of Alcohol, Tobacco, Firearms and Explosives promoted Voth to lead Phoenix Group VII, one of seven new ATF groups along the Southwest border tasked with stopping guns from being trafficked into Mexico's vicious drug war.

Some call it the "parade of ants"; others the "river of iron." The Mexican government has estimated that 2,000 weapons are smuggled daily from the U.S. into Mexico. The ATF is hobbled in its effort to stop this flow. No federal statute outlaws firearms trafficking, so agents must build cases using a patchwork of often toothless laws. For six years, due to Beltway politics, the bureau has gone without permanent leadership, neutered in its fight for funding and authority. The National Rifle Association has so successfully opposed a comprehensive electronic database of gun sales that the ATF's congressional appropriation explicitly prohibits establishing one.

Voth, 39, was a good choice for a Sisyphean task. Strapping and sandy-haired, the former Marine is cool-headed and punctilious to a fault. In 2009 the ATF named him outstanding law-enforcement employee of the year for dismantling two violent street gangs in Minneapolis. He was the "hardest working federal agent I've come across," says John Biederman, a sergeant with the Minneapolis Police Department. But as Voth left to become the group supervisor of Phoenix Group VII, a friend warned him: "You're destined to fail."

Voth's mandate was to stop gun traffickers in Arizona, the state ranked by the gun-control advocacy group Legal Community Against Violence as having the nation's "weakest gun violence prevention laws." Just 200 miles from Mexico, which prohibits gun sales, the Phoenix area is home to 853 federally licensed firearms dealers. Billboards advertise volume discounts for multiple purchases.

Customers can legally buy as many weapons as they want in Arizona as long as they're 18 or older and pass a criminal background check. There are no waiting periods and no need for permits, and buyers are allowed to resell the guns. "In Arizona," says Voth, "someone buying three guns is like someone buying a sandwich."

By 2009 the Sinaloa drug cartel had made Phoenix its gun supermarket and recruited young Americans as its designated shoppers or straw purchasers. Voth and his agents began investigating a group of buyers, some not even old enough to buy beer, whose members were plunking down as much as $20,000 in cash to purchase up to 20 semiautomatics at a time, and then delivering the weapons to others.

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The agents faced numerous obstacles in what they dubbed the Fast and Furious case. (They named it after the street-racing movie because the suspects drag raced cars together.) Their greatest difficulty by far, however, was convincing prosecutors that they had sufficient grounds to seize guns and arrest straw purchasers. By June 2010 the agents had sent the U.S. Attorney's office a list of 31 suspects they wanted to arrest, with 46 pages outlining their illegal acts. But for the next seven months prosecutors did not indict a single suspect.

On Dec. 14, 2010, a tragic event rewrote the narrative of the investigation. In a remote stretch of Peck Canyon, Ariz., Mexican bandits attacked an elite U.S. Border Patrol unit and killed an agent named Brian Terry. The attackers fled, leaving behind two semiautomatic rifles. A trace of the guns' serial numbers revealed that the weapons had been purchased 11 months earlier at a Phoenix-area gun store by a Fast and Furious suspect.

Ten weeks later, an ATF agent named John Dodson, whom Voth had supervised, made startling allegations on the CBS Evening News. He charged that his supervisors had intentionally allowed American firearms to be trafficked—a tactic known as "walking guns"—to Mexican drug cartels. Dodson claimed that supervisors repeatedly ordered him not to seize weapons because they wanted to track the guns into the hands of criminal ringleaders. The program showed internal e-mails from Voth, which purportedly revealed agents locked in a dispute over the deadly strategy. The guns permitted to flow to criminals, the program charged, played a role in Terry's death.

After the CBS broadcast, Fast and Furious erupted as a major scandal for the Obama administration. The story has become a fixture on Fox News and the subject of numerous reports in media outlets from CNN to the New York Times. The furor has prompted repeated congressional hearings—with U.S. Attorney General Eric Holder testifying multiple times—dueling reports from congressional committees, and an ongoing investigation by the Justice Department's inspector general. It has led to the resignations of the acting ATF chief, the U.S. Attorney in Arizona, and his chief criminal prosecutor.

Conservatives have pummeled the Obama administration, and especially Holder, for more than a year. "Who authorized this program that was so felony stupid that it got people killed?" Rep. Darrell Issa (R-Calif.), chairman of the House Committee on Oversight and Government Reform, demanded to know in a hearing in June 2011. He has charged the Justice Department, which oversees the ATF, with having "blood on their hands." Issa and more than 100 other Republican members of Congress have demanded Holder's resignation.

The conflict has escalated dramatically in the past ten days. On June 20, in a day of political brinkmanship, Issa's committee voted along party lines, 23 to 17, to hold Holder in contempt of Congress for allegedly failing to turn over certain subpoenaed documents, which the Justice Department contended could not be released because they related to ongoing criminal investigations. The vote came hours after President Obama asserted executive privilege to block the release of the documents. Holder now faces a vote by the full House of Representatives this week on the contempt motion (though negotiations over the documents continue). Assuming a vote occurs, it will be the first against an attorney general in U.S. history.

As political pressure has mounted, ATF and Justice Department officials have reversed themselves. After initially supporting Group VII agents and denying the allegations, they have since agreed that the ATF purposefully chose not to interdict guns it lawfully could have seized. Holder testified in December that "the use of this misguided tactic is inexcusable, and it must never happen again."

There's the rub.

Quite simply, there's a fundamental misconception at the heart of the Fast and Furious scandal. Nobody disputes that suspected straw purchasers under surveillance by the ATF repeatedly bought guns that eventually fell into criminal hands. Issa and others charge that the ATF intentionally allowed guns to walk as an operational tactic. But five law-enforcement agents directly involved in Fast and Furious tell Fortune that the ATF had no such tactic. They insist they never purposefully allowed guns to be illegally trafficked. Just the opposite: They say they seized weapons whenever they could but were hamstrung by prosecutors and weak laws, which stymied them at every turn.

Indeed, a six-month Fortune investigation reveals that the public case alleging that Voth and his colleagues walked guns is replete with distortions, errors, partial truths, and even some outright lies. Fortune reviewed more than 2,000 pages of confidential ATF documents and interviewed 39 people, including seven law-enforcement agents with direct knowledge of the case. Several, including Voth, are speaking out for the first time.

How Fast and Furious reached the headlines is a strange and unsettling saga, one that reveals a lot about politics and media today. It's a story that starts with a grudge, specifically Dodson's anger at Voth. After the terrible murder of agent Terry, Dodson made complaints that were then amplified, first by right-wing bloggers, then by CBS. Rep. Issa and other politicians then seized those elements to score points against the Obama administration, which, for its part, has capitulated in an apparent effort to avoid a rhetorical battle over gun control in the run-up to the presidential election. (A Justice Department spokesperson denies this and asserts that the department is not drawing conclusions until the inspector general's report is submitted.)

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"Republican senators are whipping up the country into a psychotic frenzy with these reports that are patently false," says Linda Wallace, a special agent with the Internal Revenue Service's criminal investigation unit who was assigned to the Fast and Furious team (and recently retired from the IRS). A self-described gun-rights supporter, Wallace has not been criticized by Issa's committee.

The ATF's accusers seem untroubled by evidence that the policy they have pilloried didn't actually exist. "It gets back to something basic for me," says Sen. Charles Grassley (R-Iowa). "Terry was murdered, and guns from this operation were found at his murder site." A spokesman for Issa denies that politics has played a role in the congressman's actions and says "multiple individuals across the Justice Department's component agencies share responsibility for the failure that occurred in Operation Fast and Furious." Issa's spokesman asserts that even if ATF agents followed prosecutors' directives, "the practice is nonetheless gun walking." Attorneys for Dodson declined to comment on the record.

For its part, the ATF would not answer specific questions, citing ongoing investigations. But a spokesperson for the agency provided a written statement noting that the "ATF did not exercise proper oversight, planning or judgment in executing this case. We at ATF have accepted responsibility and have taken appropriate and decisive action to insure that these errors in oversight and judgment never occur again." The statement asserted that the "ATF has clarified its firearms transfer policy to focus on interdiction or early intervention to prevent the criminal acquisition, trafficking and misuse of firearms," and it cited changes in coordination and oversight at the ATF.

Irony abounds when it comes to the Fast and Furious scandal. But the ultimate irony is this: Republicans who support the National Rifle Association and its attempts to weaken gun laws are lambasting ATF agents for not seizing enough weapons—ones that, in this case, prosecutors deemed to be legal.

The investigation begins

The ATF is a bureau of judgment calls. Drug enforcement agents can confiscate cocaine and arrest anyone in possession of it. But ATF agents must distinguish constitutionally protected legal guns from illegal ones, with the NRA and other Second Amendment activists watching for missteps.

Critics have depicted the ATF as "jackbooted government thugs" trampling on the rights of law-abiding gun owners. From the deadly standoff with the Branch Davidian cult in Waco, Texas, in 1993 to allegations that ATF agents illegally seized weapons from suspected straw purchasers at a Richmond gun show in 2005, these scandals have helped cement the bureau's reputation in some quarters for law-enforcement overreach.

In part because of these notorious cases, the bureau has operated in a self-protective crouch. It has stuck to small single-defendant cases to the detriment of its effort to combat gun trafficking, the Justice Department's inspector general found in a review of ATF cases from 2007 to 2009. To refocus its efforts, the ATF established Group VII and the other Southwest border units to build big, multi-defendant conspiracy cases and target the leaders of the trafficking operations.

Of course, the ATF can be its own worst enemy. Voth arrived in Phoenix in December 2009 only to discover that his group had not been funded. The group had little equipment and no long guns, electronic devices, or binoculars, forcing Voth to scrounge for supplies.

Then there was Voth's seven-agent team, which was almost instantly at war with itself. Most of the agents were transplants, unfamiliar with Arizona or one another. Fast and Furious' lead case agent, Hope MacAllister, 41, was the exception—a tough, squared-away Phoenix veteran with little tolerance for complaints. Her unsmiling demeanor led Voth to give her the ironic nickname "Sunshine Bear." She declined to be interviewed.

Dodson, 41, arrived one day before Voth from a two-man outpost of ATF's Roanoke field office, where he'd worked since 2002. He had joined the ATF from the narcotics section of the Loudoun County sheriff's office in Virginia, where his blunt, even obnoxious manner did not earn him friends. He's "an asshole sometimes—there is no other way to put it," says his former partner, Ken Dondero, who served as best man at Dodson's wedding. "He's almost too honest. He believes that if he has a thought in his head, it's there to broadcast to everyone."

Voth, MacAllister, and a third agent, Tonya English, were quintessential by-the-book types. By contrast, Dodson and two other new arrivals, Olindo "Lee" Casa and Lawrence Alt, seemed to chafe at ATF rules and procedures. (An attorney for Casa says that "in light of the current congressional investigation, as well as investigations by the Department of Justice Inspector General and the Office of Special Counsel" it would be premature to comment. A lawyer for Alt says Alt could not be interviewed because he is in mediation to settle a suit he filed in which he charges that he was retaliated against for being a whistleblower.)

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Dodson's faction grew antagonistic to Voth. They regularly fired off snide e-mails and seemed to delight in mocking Voth and his methodical nature. They were scornful of protocol, according to ATF agents. Dodson would show up to work in flip-flops. He came unprepared for operations—without safety equipment or back-up plans—and was pulled off at least one surveillance for his own safety, say two colleagues. He earned the nickname "Renegade," and soon Voth's group effectively divided into two clashing factions: the Sunshine Bears and the Renegades.

Even had they all gotten along, they faced a nearly impossible task. They were seven agents pursuing more than a dozen cases, of which Fast and Furious was just one, their efforts complicated by a lack of adequate tools. Without a real-time database of gun sales, they had to perform a laborious archaeology. Day after day, they visited local gun dealers and pored over forms called 4473s, which dealers must keep on file. These contain a buyer's personal information, a record of purchased guns and their serial numbers, and a certification that the buyer is purchasing the guns for himself. (Lying on the forms is a felony, but with weak penalties attached.) The ATF agents manually entered these serial numbers into a database of suspect guns to help them build a picture of past purchases.

By January 2010 the agents had identified 20 suspects who had paid some $350,000 in cash for more than 650 guns. According to Rep. Issa's congressional committee, Group VII had enough evidence to make arrests and close the case then.

Prosecutors: Transferring guns is legal in Arizona

This was not the view of federal prosecutors. In a meeting on Jan. 5, 2010, Emory Hurley, the assistant U.S. Attorney in Phoenix overseeing the Fast and Furious case, told the agents they lacked probable cause for arrests, according to ATF records. Hurley's judgment reflected accepted policy at the U.S. Attorney's Office in Arizona. "[P]urchasing multiple long guns in Arizona is lawful," Patrick Cunningham, the U.S. Attorney's then–criminal chief in Arizona would later write. "Transferring them to another is lawful and even sale or barter of the guns to another is lawful unless the United States can prove by clear and convincing evidence that the firearm is intended to be used to commit a crime." (Arizona federal prosecutors referred requests for comment to the Justice Department, which declined to make officials available. Hurley noted in an e-mail, "I am not able to comment on what I understand to be an ongoing investigation/prosecution. I am precluded by federal regulation, DOJ policy, the rules of professional conduct, and court order from talking with you about this matter." Cunningham's attorney also declined to comment.)

It was nearly impossible in Arizona to bring a case against a straw purchaser. The federal prosecutors there did not consider the purchase of a huge volume of guns, or their handoff to a third party, sufficient evidence to seize them. A buyer who certified that the guns were for himself, then handed them off minutes later, hadn't necessarily lied and was free to change his mind. Even if a suspect bought 10 guns that were recovered days later at a Mexican crime scene, this didn't mean the initial purchase had been illegal. To these prosecutors, the pattern proved little. Instead, agents needed to link specific evidence of intent to commit a crime to each gun they wanted to seize.

None of the ATF agents doubted that the Fast and Furious guns were being purchased to commit crimes in Mexico. But that was nearly impossible to prove to prosecutors' satisfaction. And agents could not seize guns or arrest suspects after being directed not to do so by a prosecutor. (Agents can be sued if they seize a weapon against prosecutors' advice. In this case, the agents had a particularly strong obligation to follow the prosecutors' direction given that Fast and Furious had received a special designation under the Justice Department's Organized Crime Drug Enforcement Task Force. That designation meant more resources for the case, but it also provided that prosecutors take the lead role.)

In their Jan. 5 meeting, Hurley suggested another way to make a case: Voth's team could wiretap the phone of a suspected recruiter and capture proof of him directing straw purchasers to buy guns. This would establish sufficient proof to arrest both the leaders and the followers.

On Jan. 8, 2010, Voth and his supervisors drafted a briefing paper in which they explained Hurley's view that "there was minimal evidence at this time to support any type of prosecution." The paper elaborated, "Currently our strategy is to allow the transfer of firearms to continue to take place, albeit at a much slower pace, in order to further the investigation and allow for the identification of additional co-conspirators."

Rep. Issa's committee has flagged this document as proof that the agents chose to walk guns. But prosecutors had determined, Voth says, that the "transfer of firearms" was legal. Agents had no choice but to keep investigating and start a wiretap as quickly as possible to gather evidence of criminal intent.

Ten days after the meeting with Hurley, a Saturday, Jaime Avila, a transient, admitted methamphetamine user, bought three WASR-10 rifles at the Lone Wolf Trading Company in Glendale, Ariz. The next day, a helpful Lone Wolf employee faxed Avila's purchase form to ATF to flag the suspicious activity. It was the Martin Luther King Jr. holiday weekend, so the agents didn't receive the fax until Tuesday, according to a contemporaneous case report. By that time, the legally purchased guns had been gone for three days. The agents had never seen the weapons and had no chance to seize them. But they entered the serial numbers into their gun database. Two of these were later recovered at Brian Terry's murder scene.

Rebuffed by the prosecutors

Voth was a logical thinker. He lived by advice he received from an early mentor in law enforcement: "There's what you think. There's what you know. There's what you can prove. And the first two don't count."

But he was not operating in a logical world. The wiretap represented the ATF's best—perhaps only— hope of connecting the gun purchases it had been documenting to orders from the cartels, according to Hurley. In Minneapolis, the prosecutors Voth had worked with had approved wiretap applications within 24 hours. But in Phoenix, days turned into weeks, and Group VII's wiretap application languished with prosecutors in Arizona and Washington, D.C.

No one has yet explained this delay. Voth thinks prosecutor Hurley's inexperience in wiretapping cases may have slowed the process. Several other agents speculate that Arizona's gun culture may have led to indifference. Hurley is an avid gun enthusiast, according to two law-enforcement sources who worked with him. One of those sources says he saw Hurley behind the counter at a gun show, helping a friend who is a weapons dealer.

William Newell, then special agent in charge of the ATF's Phoenix field division, suspected that U.S. Attorney Dennis Burke, an Obama appointee, was not being briefed adequately by deputies about the volume of guns being purchased. He wrote to colleagues in February 2010 that the prosecutor seemed "taken aback by some of the facts I informed him about"—by then, the Fast and Furious suspects had purchased 800 guns—"so I am setting up a briefing for him (alone no USAO 'posse') about this case and several other cases I feel he is being misled about."

The conflict between federal prosecutors and ATF agents had been growing for years. Pete Forcelli, who served as group supervisor of ATF's Phoenix I field division for five years, told Congress in June 2011 that he believed Arizona federal prosecutors made up excuses to decline cases. "Despite the existence [of] probable cause in many cases," he testified, "there were no indictments, no prosecutions, and criminals were allowed to walk free." Prosecutors in Los Angeles and New York were far more aggressive in pursuing gun cases, Forcelli asserted.

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Phoenix-based ATF agents became so frustrated by prosecutors' intransigence that, in a highly unusual move, they began bringing big cases to the state attorney general's office instead. Terry Goddard, Arizona's Attorney General from 2003 to 2011, says of federal prosecutors, "They demanded that every i be dotted, every t be crossed, and after a while, it got to be nonsensical."

For prosecutors, straw-purchasing cases were hard to prove and unrewarding to prosecute, with minimal penalties attached. In December 2010, five U.S. Attorneys along the Southwest border, including Burke in Arizona, wrote to the U.S. Sentencing Commission, asking that penalties for straw purchasing be increased. The commission did increase the recommended jail time by a few months. But because the straw purchasers, by definition, have no criminal record and there is no firearms-trafficking statute that would allow prosecutors to charge them with conspiracy as a group, the penalties remain low.

Prosecutors repeatedly rebuffed Voth's requests. After examining one suspect's garbage, agents learned he was on food stamps yet had plunked down more than $300,000 for 476 firearms in six months. Voth asked if the ATF could arrest him for fraudulently accepting public assistance when he was spending such huge sums. Prosecutor Hurley said no. In another instance, a young jobless suspect paid more than $10,000 for a 50-caliber tripod-mounted sniper rifle. According to Voth, Hurley told the agents they lacked proof that he hadn't bought the gun for himself.

Voth grew deeply frustrated. In August 2010, after the ATF in Texas confiscated 80 guns—63 of them purchased in Arizona by the Fast and Furious suspects— Voth got an e-mail from a colleague there: "Are you all planning to stop some of these guys any time soon? That's a lot of guns…Are you just letting these guns walk?"

Voth responded with barely suppressed rage: "Have I offended you in some way? Because I am very offended by your e-mail. Define walk? Without Probable Cause and concurrence from the USAO [U.S. Attorney's Office] it is highway robbery if we take someone's property." He then recounted the situation with the unemployed suspect who had bought the sniper rifle. "We conducted a field interview and after calling the AUSA [assistant U.S. Attorney] he said we did not have sufficient PC [probable cause] to take the firearm so our suspect drove home with said firearm in his car…any ideas on how we could not let that firearm 'walk'"?

Voth believed the wiretap could help bring the case to a swift and successful close. On March 5, 2010, ten days before their first wiretap was set to begin, Voth was in Washington, D.C., to brief ATF brass and Justice Department officials on Fast and Furious. The response was overwhelmingly positive. A senior ATF attorney wrote Voth, "This is exactly the types of cases ATF should be doing with a wire, it is fantastic."

The schism inside Phoenix Group VII

Voth returned to Phoenix fully expecting his team to unite for the work that lay ahead. But instead he found a minor mutiny—over the schedule for the wire, which needed to be monitored around the clock. Dodson didn't want to work weekends. Casa felt his seniority should exclude him from the effort.

Agents were getting pulled from other field offices to assist, and on March 11, one wrote to ask Voth, "You're not going to give the out-of-towners the crappy shifts, are you?" Voth responded, "I am attempting to split the weekends so everyone has to work one of the two days that way no one gets screwed too hard and everybody gets screwed a little bit."

The next day, March 12, Voth sent out the wire schedule at 5:15 p.m. but got such a blizzard of complaints about the shifts that, two hours later, he sent another e-mail to the group. It read in part: "[T]here may be a schism developing amongst the group. This is the time we all need to pull together not drift apart. We are all entitled to our respective (albeit different) opinions however we all need to get along and realize we have a mission to accomplish. I am thrilled and proud that our Group is the first ATF Southwest Border Group in the country to be going up on [a] wire…I will be damned if this case is going to suffer due to petty arguing, rumors or other adolescent behavior…I don't know what all the issues are but we are all adults, we are all professionals, and we have an exciting opportunity to use the biggest tool in our law enforcement tool box. If you don't think this is fun you're in the wrong line of work—period! This is the pinnacle of domestic U.S. law-enforcement techniques. After this the tool box is empty."

The wire turned out to be short lived. Within days, the agents realized that their suspect was phasing out use of the phone they were monitoring. Group VII would have to reapply, all over again, for permission to tap the new phone number.

But Voth's so-called "schism e-mail" would live in infamy. Today it is held up as proof that the group was desperately divided over the tactic of gun walking and that Voth belittled those who opposed it. But there is no documentary evidence that agents Dodson, Casa, or Alt complained to their supervisors about the alleged gun walking, had confrontations about it, or were retaliated against because of their complaints, as they all later claimed.

Who's opposed to gun walking?

The atmosphere inside Voth's group had become toxic. The subjects of dispute were often trivial. For example, when Voth asked Casa to turn off his computer's Godzilla sound effect, which roared each time he got an e-mail, Casa replied, "I have done some limited research and have found no ATF order or internal division memo addressing this issue."

Voth remained even-tempered but did take a stand after one incident. Alt taped to Voth's door an eight-point takedown of agent MacAllister, sarcastically stating that she was in charge of everything. Voth reported the note to an ATF attorney, and Alt apologized. It's unclear what drove the men's anger, but it seems unlikely that it was caused by disagreements over alleged gun walking.

June 27, 2012

Court Upholds EPA Climate-Change Rules

A federal appeals court on Tuesday upheld the Environmental Protection Agency's regulations to reduce greenhouse gases that contribute to climate change, throwing out legal challenges by states and industry groups that argued the EPA had exceeded its authority under the Clean Air Act by declaring that carbon emissions endanger public health.

The decision is a huge victory for the administration’s efforts to address climate change in the face of congressional gridlock on the issue and increasing skepticism among Republicans that climate change is a problem the country needs to address.

The rule will undoubtedly trigger an intense backlash from industry and congressional Republicans who charge the EPA is trying to enact climate-change policy through backdoor administrative actions since Congress hasn’t acted.

The ruling from the U.S. Court of Appeals for the D.C. Circuit upheld four major aspects of the rules that a large coalition of states, industry groups, and companies had challenged. In perhaps the most surprising part of the ruling, the court upheld the EPA's controversial “tailoring rule,” which the agency established so it could slowly phase in the greenhouse-gas rules under the Clean Air Act. Even the administration’s own lawyers privately worried about the legality of this provision because it stretched the definitions of the Clean Air Act.

The court also upheld the linchpin of the legal challenges—EPA’s “endangerment finding.” This is a scientific conclusion the agency reached in December 2009 that greenhouse gases like carbon dioxide and methane are a threat to human health and welfare and must be regulated under the Clean Air Act. EPA reached that conclusion in response to a 2007 Supreme Court ruling that the agency had the right to regulate greenhouse-gas emissions if it found, as it later did, that those emissions were a threat to public health and welfare.

June 26, 2012

Members of Congress trade in companies while making laws that affect those same firms

One-hundred-thirty members of Congress or their families have traded stocks collectively worth hundreds of millions of dollars in companies lobbying on bills that came before their committees, a practice that is permitted under current ethics rules, a Washington Post analysis has found.

The lawmakers bought and sold a total of between $85 million and $218 million in 323 companies registered to lobby on legislation that appeared before them, according to an examination of all 45,000 individual congressional stock transactions contained in computerized financial disclosure data from 2007 to 2010.

Almost one in every eight trades — 5,531 — intersected with legislation. The 130 lawmakers traded stocks or bonds in companies as bills passed through their committees or while Congress was still considering the legislation. The party affiliation of the lawmakers was almost evenly split between Democrats and Republicans, 68 to 62.

Sen. Tom Coburn (R-Okla.) reported buying $25,000 in bonds in a genetic-technology company around the time that he released a hold on legislation the firm supported. Rep. Ed Whitfield (R-Ky.) sold between $50,000 and $100,000 in General Electric stock shortly before a Republican filibuster killed legislation sought by the company. The family of Rep. Michael McCaul (R-Tex.) bought between $286,000 and $690,000 in a high-tech company interested in a bill under his committee’s jurisdiction.

The trades were uncovered as part of an ongoing examination by The Post of the intersection between the personal finances of lawmakers and their professional duties. Earlier this year, Congress responded to criticism of potential conflicts of interest by passing the Stock Act, which bars lawmakers, their staffs and top executive branch officials from trading on inside information acquired on Capitol Hill.

But the act failed to address the most elemental difference between Congress and the other branches of government: Congress forbids top administration officials, for instance, from trading stocks in industries they oversee and can influence. The lawmakers, by contrast, can still invest in firms even as they create laws that can affect the bottom line of the companies.

“If you have major responsibility for drafting legislation that directly affects particular companies, then you shouldn’t be trading in their stock,” said Dennis Thompson, a professor of public policy at Harvard University’s John F. Kennedy School of Government and author of “Ethics in Congress: From Individual to Institutional Corruption.” “Committee chairs especially shouldn’t be in the position of potentially benefiting from trades in companies that stand to gain or lose from actions the committee takes.”

The Post analysis does not provide evidence of insider trading, which requires showing that lawmakers knowingly used confidential information to make trades benefiting themselves. Instead, the review shows that lawmakers routinely make trades that raise questions about potential conflicts and illustrate the weaker standard that Congress applies to itself.

More than a dozen lawmakers contacted by The Post defended the timing of their trades and the legislation before their committees as coincidental and said they did not know that the companies they traded were registered to lobby on bills they were considering. In interviews and through spokesmen, they said brokers made the trades and they had little or no input. Some said their spouses handled their investments. With diverse portfolios, they said, overlap is inevitable.

Richard W. Painter, who was chief ethics lawyer for President George W. Bush, said those explanations do not provide ethical cover.

“Your wife isn’t a blind trust. Your financial adviser isn’t either,” Painter said. “If you truly want to create some distance, you should set up a blind trust. The rules that Congress has set for itself with blind trusts are a lot more liberal than the rules they created for the executive branch. This should be the route they take if they want the public to believe they don’t know what’s going on with their investments.”

Only six members of the Senate have set up blind trusts that have been approved by the ethics committee. The House does not keep a tally of the number of members who set up such trusts.

Under ethics rules, lawmakers may establish a blind trust by shifting all of their assets into an account managed by a financial adviser. The lawmaker may set general parameters for the blind trust investment decisions, but they surrender control and cannot know the details of the decisions.

Georgia State University professor Alan J. Ziobrowski said lawmakers who own stocks in companies lobbying on legislation before them have built-in conflicts.

“You can’t get into their heads to know what is motivating them,” said Ziobrowski, whose research helped prompt the initial push for the Stock Act by showing that members of Congress outperformed the market as a whole — senators by 10 percent and representatives by 6 percent. “Are they thinking about their investment, or about what is best for their constituents?”

The Post analysis is based on a comparison of federal financial disclosure forms from all members of Congress to a wide array of public records, drawing on work by the Center for Responsive Politics and Govtrack.us to convert paper documents to databases. The analysis does not include 2011 data because they have not yet been computerized.

Under Congress’s interpretation of its own conflict rules, lawmakers can take official actions that benefit themselves as long as they are not the sole beneficiaries.

Former representative Brian Baird (D-Wash.), who co-authored the original, unsuccessful version of the Stock Act in 2006, said members of Congress and their staffs do not understand that public trust is eroded when people see lawmakers take actions that have the potential to benefit themselves.

“They don’t get it, but they need to,” Baird said. “Why? Because people who are taking actions for venal and nefarious purposes might make the same argument you’re making about your innocence. That’s why if there is an appearance of an impropriety, there just might be an impropriety. Members need to bend over backwards to show people they are there for the good of the country.”

Hold on bill lifted, bonds bought

In 2007, Sen. Coburn placed a legislative hold on the Genetic Information Nondiscrimination Act, saying he wanted changes to address fears about exposing employers and insurance companies to lawsuits. The bill prohibited employers and health insurers from using genetic information to discriminate.

After negotiating a compromise on April 22, 2008, Coburn released his hold.

On that day and the day after, Coburn’s financial disclosure form shows a total of three bond purchases in Affymetrix, a pioneering genetic technology firm that was one of 33 companies registered to lobby on the legislation.

Affymetrix lobbied on only a handful of bills that session. Coburn is one of five lawmakers who reported buying and selling Affymetrix stocks or bonds since 2004.

In an interview, Coburn said that he and Sen. Richard Burr (R-N.C.) both held up the bill. “We actually negotiated some better things into the bill,” Coburn said. “I don’t think it had anything to do with Affymetrix.”

Coburn said his Affymetrix bond purchases, worth $25,000, were made without his knowledge by Pinnacle Investment Advisors in Tulsa. The timing, he said, was coincidental.

John Hart, Coburn’s communications director, said that Affymetrix did not lobby Coburn and that his hold had no bearing on the company’s value. Hart said Coburn has placed hundreds of holds since 2005.

“There is no evidence Dr. Coburn had even heard of Affymetrix before his broker made a purchase, and there is no evidence his actions affected the value of the company,” Hart said. “If there was a connection, you could argue it hurt the company — the stock lost half its value. Plus, it would be a stretch to suggest he engaged in procedural gymnastics in order to affect a trade.”

Pinnacle managing partner David Poarch said he didn’t discuss the Affymetrix purchase with the senator. He said Pinnacle bought about $1.7 million worth of convertible bonds in the company on April 22, 2008, for 104 of the firm’s 350 clients. Poarch said the firm sold those bonds for all their clients last year, including for Coburn, who earned a 35 percent profit on his investment.

Poarch said he meets face-to-face with the senator once a year, and they might speak over the phone two or three times during that period to map out investment strategies. The senator rarely directs him to make trades, he said.

“In some of our discussions, he’ll indicate sectors he likes,” Poarch said, noting that the senator rarely directs Pinnacle to make specific trades.

Coburn said he gives Poarch only general advice.

“I’ve never had a conversation with him other than, ‘Here’s what I think is going to happen to the economy, so you guys ought to listen,’ ” he said.

Affymetrix officials did not return calls seeking comment. After the genetic bill became law in May 2008, Affymetrix praised its passage in a news release. “We have actively supported this much-needed legislation for more than seven years and we are pleased to see the U.S. government take steps toward addressing the issues around genetic discrimination,” said Stephen P.A. Fodor, the company’s founder.

Shining light on GE trades

Rep. Whitfield trades infrequently, but several of his transactions have coincided with major legislation before him.

Whitfield is a member of an energy subcommittee that handled the 2008 carbon-cap proposal intended to address rising public concern about global warming. It had the support of major companies and the Democrats who were in charge of both chambers at the time.

General Electric, which had created a subsidiary to help businesses manage carbon emissions, lobbied heavily in favor of the bill.

Whitfield sold his holdings in GE, worth between $50,000 and $100,000, on May 5, 2008, for $32 per share. (Exact amounts are unavailable because members of Congress are allowed to report ranges for the values of their transactions.) He had held the stock for 12 years.

Although the cap had appeared to be gaining momentum, Whitfield’s Republican colleagues in the Senate scuttled the bill in early June with parliamentary actions and a threatened filibuster.

After the bill died, the stock dropped to $26 — $6 less than the price when Whitfield sold.

Whitfield’s spokeswoman, Corry Schiermeyer, said his trade had nothing to do with the legislation, which she said was never going to get past Republican opposition.

The trade was one of the two largest stock sales by Whitfield since 2004.

The other came when Whitfield sold between $50,000 and $100,000 in the defense conglomerate United Technologies in October 2009 — the same day that his subcommittee approved a Democratic bill to strengthen rules requiring companies to secure chemical facilities. United Technologies had registered to lobby on that bill, but Whitfield’s staff members said their records do not show that the company lobbied him.

Altogether, Whitfield made 23 trades worth between $275,000 and $900,000 in companies registered to lobby before his committee, encompassing 38 percent of his stock trades between 2007 and 2010.

Schiermeyer said Whitfield adhered to the relevant ethics rules.

“It’s clear that his role on the Energy and Commerce Committee has no relation to his stock trades,” Schiermeyer said. “The congressman believes the best approach to avoid a semblance of conflict of interest is to follow the rules and be transparent, and that is what he does.”

Lawmakers can affect bills in other ways.

Members of the Rules Committee, for example, have the power to quash amendments and set the terms for floor debate on all bills.

In July 2005, the Rules Committee, chaired by Rep. David Dreier (R-Calif.), blocked an amendment to a medical malpractice bill that ran against the interests of Merck & Co., the giant pharmaceutical company. Five months earlier, the day the bill was introduced, Dreier had purchased between $15,000 and $50,000 worth of stock in Merck.

The bill, which Dreier had co-sponsored, contained medical malpractice limits sought by Republican lawmakers. The legislation included a provision that would shield drug companies from liability. Merck, which was being sued over claims its Vioxx arthritis medication caused heart attacks, had lobbied heavily in favor of the bill.

Democrats unsuccessfully attempted to strip the liability protection from the bill, arguing that it unfairly protected Merck. As the bill moved through the House, the value of Merck’s stock grew by 15 percent.

The bill passed the House but stalled in the Senate.

A newer version of the bill made it through the House this year, but has failed to gain traction in the Senate. Dreier declined requests for comment. His spokeswoman said he could not recall the trade, which was made by an investment adviser.

“In managing his finances, Mr. Dreier abides by the letter and the spirit of the rules,” spokeswoman Jo Maney said. “Day-to-day investment decisions for his account are made by an independent investment professional. His co-sponsorship of the legislation in question was based on long-standing support for pro-market health-care reforms. Furthermore, his actions as Rules Committee chairman have always been guided by his principles and those of the leadership he serves.”

Dreier’s office did not provide access to his investment adviser.

A matter of trusts

Some of Congress’s wealthiest members avoid potential conflicts by putting their assets in blind trusts approved by congressional ethics committees. Sen. Herb Kohl(D-Wis.), for example, reports holding more than $50 million in such a trust. Under ethics rules, Kohl cannot know the nature of his investments and must remain unaware of how they are managed.

Other wealthy members do not have financial portfolios in blind trusts. Their portfolios are so vast that their financial disclosure reports exceed a hundred pages and their holdings overlap with almost every bill they handle.

Sen. John F. Kerry (D-Mass.), who married Teresa Heinz of the ketchup fortune, had the highest value of overlapped trades — between $42 million and $86 million — in companies registered to lobby before him. Kerry said he does not have any conflicts, because he has no control over the assets in his and his wife’s family trusts.

Rep. McCaul, married to Linda Mays, whose fortune traces back to Clear Channel Communications, had the highest number of overlapping trades, totaling between $5 million and $23 million, according to analysis of financial disclosure forms listing his family’s holdings.

Some of those investments were in Thermo Fisher Scientific, which in 2009 had registered to lobby on a food safety bill under the jurisdiction of the Homeland Security Committee. McCaul was a member of that committee. Among other things, the company makes equipment to detect contaminated food.

While the bill was pending, McCaul toured the company’s Austin plant and extolled the technology as “great for food safety and protecting the American people.”

As the bill moved forward, his family bought stock in Thermo Fisher. Trusts for his wife and children bought between $286,000 and $690,000 in nine transactions, the largest being for between $250,000 and $500,000 in November 2010 during final negotiations before the bill passed. The family bought the stock at prices from $33.50 to $44. McCaul’s 2011 financial disclosure showed the family still owned it. The current stock price is a little more than $50.

McCaul said there is no conflict between his legislative duties and his wife’s holdings, because he has no access to her portfolio and he never talks to her about her investment decisions.

“Congressman McCaul . . . is legally precluded from having any involvement or knowledge of specific investment decisions made with regard to securities listed as his wife’s separate property,” said his spokesman, Mike Rosen.

Railroad rules

In 2009, the House Judiciary subcommittee on courts, the Internet and intellectual property discussed the Railroad Antitrust Enforcement Act, aimed at ending rail carriers’ exemptions from federal antitrust laws.

A family trust overseen by Rep. F. James Sensenbrenner Jr. (R-Wis.), a subcommittee member, sold 2,000 shares of CSX after a subcommittee hearing and before the final changes were made to the bill.

The shares generated a $40,000 net profit, records show. The same day, the trust bought $7,700 in Norfolk Southern stock.

The two rail carriers were among 62 companies lobbying on the bill.

Sensenbrenner’s spokeswoman said the trades were initiated by a fund manager who handles the investments for the trust that benefits the lawmaker’s sister.

“Congressman Sensenbrenner’s interaction with the trust is almost nothing,” spokeswoman Amanda Infield said. ­­“He doesn’t benefit from the trust, except for an administrative fee as trustee. He is not a beneficiary, and he doesn’t exercise influence over or give input into the investment decisions. He has to sign off on the decisions, but he hasn’t overridden an investment decision, which is made by JPMorgan Chase.”

Rep. Dave Camp (R-Mich.), a member of the House Ways and Means Committee since 1993, reported making trades in John Deere when the Illinois-based company was registered to lobby on tax and trade legislation before his committee between 2007 and 2010. The biggest single transaction was between $50,000 and $100,000. When the purchase was made in March 2009, Deere stock was $32 a share. The stock now trades at $75 per share.

Camp declined through his spokesman to be interviewed or provide additional information about his trades and how his portfolio is managed.

“All of the Congressman’s financial information are fully disclosed in accordance with the law,” Sage Eastman, a senior adviser to Camp, said in an e-mail. “His stock portfolio is managed by a firm. He does not make decisions about when to buy or sell a stock.”

June 25, 2012

Get 'Em Addicted: Obama Admin Boosted Obamacare Spending After Oral Arguments

It seems the Obama administration saw the writing on the wall after the Obamacare oral arguments ended. According to a Politico report, the administration has spent “at least $2.7 billion since oral arguments in the case ended on March 28” on Obamacare, which is “more than double the amount that was handed out in the three-month period leading up to the arguments." A spokesperson for the Department of Health and Human services told Politico that there was nothing to see here, because these funds had been in the pipeline.

The timing, though, is curious and important, because Obamacare funds “would dry up” if the Supreme Court strikes down Obamacare, but money that is spent before the ruling “won’t have to be repaid, most likely.”

There is an obvious political reason for this -- to try to make Obamacare more popular even as it becomes one of the only pieces of such broad legislation that has become more unpopular the more people hear about. Usually, when legislation is passed, those who become dependent on it do not want parts that they like taken away from them, and with Obamacare, provisions that have been implemented -- like allowing children to stay on their parents’ insurance plans until they are 26 years of age -- have polled better than other provisions, like the individual mandate, that have yet to be enacted.

Since most of Obamacare’s provisions do not get implemented until 2014, most of the public has not had an opportunity to be dependent on various parts of it, and, with this increase in funding, the Obama administration is trying to accelerate people’s dependence on various aspects of the law to try to make it more popular.

According to an Associated Press/GFK Roper Public Affairs poll conducted June 14-18, only 33 percent of those polled supported Obamacare, and 47 percent outright disapproved. Among independents, that number is worse, and the more independents learn about Obamacare, the more they dislike it. Only 21 percent support the bill and over 50 percent disapprove of it, the first time disapproval among independents of Obamacare has gone above 50 percent since October, according to the poll.

The poll also found, though, that “three-fourths of Americans want their political leaders to undertake a new effort, rather than leave the health care system alone, if the court rules against the law.”

Well aware of this, the Obama administration is doing their best to dole out various benefits of Obamacare to make the argument, if Obamacare is struck down, that they are getting a jumpstart on a “new effort” and, like the President's action on deportations, assert that these benefits will be immediately taken away with a Republican administration.

It’s pure big government, Chicago-style politics.

June 22, 2012

Grassley: WH must provide Congress with a ‘privilege log’ for Fast and Furious documents Obama’s hiding

On Thursday, Iowa Republican Sen. Chuck Grassley ripped President Barack Obama for his assertion of the executive privilege to keep hiding Operation Fast and Furious documents from Congress. Grassley said the White House must provide a “privilege log” detailing what documents Obama is exercising his power over, and what his legal argument for doing so is.

“The White House has already produced documents in Fast and Furious involving communications between White House staff and personnel from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, so it’s ironic that this claim comes up only now,” Grassley said. “Either way, the White House must produce a privilege log to make clear which documents they are asserting executive privilege to protect.”

Grassley also questioned why Attorney General Eric Holder was less than forthcoming, during a recent Senate Judiciary Committee hearing, when asked if the president would assert the privilege.

“Just last week, when the attorney general was in front of this committee, I asked him twice if the president could claim executive privilege to protect a certain internal Justice Department email that has been withheld,” Grassley said. “Given the explicit opportunity, the attorney general did not indicate he would be asking the president to assert executive privilege over such documents.”

“The attorney general repeatedly claimed that the Justice Department was making an ‘extraordinary offer’ Tuesday night,” Grassley continued. “The only thing extraordinary is that the attorney general offered a promise to produce documents one day and then asked the president to claim executive privilege over them the next.”

Grassley also attacked Obama for waiting until the eleventh hour to assert the privilege. “If this were a serious claim, it should have been raised much earlier,” Grassley said.

Even though the White House is legally required to produce a privilege, it’s unclear if Obama’s administration will. White House spokesman Eric Schultz would not answer when asked if the administration would.

June 21, 2012

Corporate Cash in State Elections Gets U.S. High Court Scrutiny

The U.S. Supreme Court is poised to reopen the debate over a 2010 ruling that unleashed super-PACs and left federal elections awash in money from big spenders.

The justices may say as soon as next week whether they will review, or even overturn, a century-old Montana ban on corporate campaign spending, a law enacted to stop copper moguls from buying influence over the state’s politicians.

The court two years ago altered the national political landscape with its ruling in Citizens United v. Federal Election Commission, which gave companies and unions the right to spend unlimited sums on elections. Outside spending on federal races is more than double what it was four years ago.

The Montana Supreme Court ruled that Citizens United didn’t apply to its state-level restrictions. The Supreme Court put a hold on the Montana law in February and now will decide whether to reverse the state court’s decision immediately or schedule arguments in the case for later this year.

“The stay is evidence of some appetite of the court to overturn the Montana ruling, or at least revisit Citizens United,” said Paul Ryan, a lawyer for the Campaign Legal Center in Washington, which backs stricter campaign-finance rules.

The court is scheduled to consider taking up the Montana case at a private conference today, and the justices may say as early as June 18 how they will handle it.

Court Barometer

The Montana case will be a barometer of how expansive the Supreme Court intended its 5-4 ruling on Citizens United in January 2010 to be. The case enabled unlimited spending by corporations and organized labor on federal elections as long there is no direct coordination with candidates.

At the time of the Citizens United ruling, 22 states had laws banning or restricting spending by corporations and unions, according to a report this month by the Corporate Reform Coalition, made up of 75 organizations and individuals from good-governance groups, environmental groups and organized labor. Those states either repealed their limits or declared that their laws are unenforceable, according to the report.

The exception was Montana, which chose to continue enforcing its corporate money ban.

Justice Ruth Bader Ginsburg wrote in February that the Montana case provides the court a chance to reconsider Citizens United “in light of the huge sums of money deployed to buy candidates’ allegiance” in the two election cycles since the case was decided.

Ginsburg dissented in the Citizens United case. She nonetheless voted to block the Montana law, saying, “Lower courts are bound to follow this court’s decisions until they are withdrawn or modified.”

Spending Doubles

Outside organizations -- including nonprofits, which don’t have to disclose donors, and super political action committees, which do -- have spent almost $144 million on 2012 federal elections. That’s more than twice what outside groups had spent in the 2008 campaign, according to the Center for Responsive Politics in Washington, which tracks spending.

Sheila Krumholz, executive director of the center, estimates that all federal campaigns in 2012 will cost at least $6 billion, about $700 million more than four years ago.

Among the notable donors, casino magnate Sheldon Adelson, chairman of the Las Vegas Sands Corp., and his family gave $21.5 million to a super-PAC supporting the failed Republican presidential candidacy of former House Speaker Newt Gingrich. Bill Maher, the comedian and television personality, gave $1 million to a similar group backing Obama.

Horror Stories

“The horror stories have simply not come true,” said Bradley Smith, a co-founder of the Center for Competitive Politics, an Alexandria, Virginia-based group that opposes campaign-finance limits. “We thought there would be more spending, and there is. Spending increases voter awareness and interest.”

Such spending on state and local races -- which include judgeships, ballot measures and gubernatorial and mayoral posts -- is more difficult to tally, in part because of differing disclosure requirements and deadlines.

The National Institute on Money in State Politics, a campaign-finance research group based in Helena, Montana, found in a sample of 20 states that spending by groups other than candidates rose to $139 million in 2010 from $65 million in 2008.

Montana Governor Brian Schweitzer, a Democrat, wrote in a June 3 New York Times (NYT) (NYT) editorial that the effects of the U.S. Supreme Court’s decision to temporarily block the state’s ban on corporate money “are already being felt here.”

“The ink wasn’t even dry when corporate front groups started funneling lots of corporate cash into our legislative races,” he wrote.

Majority to Hold

Lawyers on both sides of the corporate-limits issue said the Supreme Court probably hasn’t concluded that it erred when it decided Citizens United. Those lawyers predicted the court will either reverse the Montana ban outright or do so after hearing arguments later this year.

“The smart money is the Citizens United majority will hold here, and the court will peevishly brush off the challenge from the Montana Supreme Court,” said Jamin Raskin, a professor of constitutional law at American University (NAUH) (NAUH) and a Maryland state senator who signed a brief in support of the state court’s ruling.

Because the Supreme Court is close to issuing a controversial ruling on President Barack Obama’s health-care policy, the justices might decide to schedule full arguments in the Montana case so as to postpone a ruling on another inflammatory issue until after the Nov. 6 elections, Smith said.

Political Calculation

“That would be purely a political calculation,” he said of the possibility of oral arguments, “not because they want to reverse Citizens United.”

Full arguments would be held after the justices reconvene in October for the next term.

Montana’s decision to keep enforcing its corporate money ban prompted a lawsuit in March 2010 by two nonprofit corporations and a family-owned business that say they want to make independent expenditures on state and local candidates.

“This case involves disrespect for the Constitution, the rule of law, and this court,” lawyers for the corporations wrote in a petition asking the Supreme Court to step in.

Montana Attorney General Steve Bullock, in his response, wrote, “as Montana’s history attests, corporate independent expenditures can corrupt.”

Big Copper

Montanans enacted the Corrupt Practices Act of 1912 by ballot initiative, after copper corporations, including Anaconda Copper Mining Co., had dominated state politics for years, according to court documents filed by the state. Anaconda was purchased in 1977 by Atlantic Richfield Co.

The state argues that local and state elections are especially susceptible to corruption that results from corporate spending on campaigns.

The Montana law bars any direct election spending by corporations, including incorporated interest groups. Corporations must set up a traditional PAC, which can solicit voluntary contributions from employees. The committees are subject to contribution limits and disclosure requirements.

Should the Supreme Court take up the case, it would test the 2010 majority’s statement that corporate campaign expenditures “do not give rise to corruption or the appearance of corruption.” That’s an important conclusion because the court has allowed campaign-finance restrictions as a means of fighting corruption.

Supporting Montana

Critics of the Citizens United ruling say the court shouldn’t preclude the possibility that independent spending might create a climate of corruption.

“The Montana case forces the court to decide whether the court really meant that corporate spending can never corrupt,” said Raskin, the American University professor.

New York and 21 other states and the District of Columbia (STODC1) filed a brief in support of Montana’s law. The states called campaign-finance restrictions on corporations necessary “to safeguard their democratic processes.”

Citizens United, a non-profit group that successfully sued the Federal Election Commission and has backed Republican candidates, said in a brief in support of the Montana businesses that every state court is bound by the Citizens United ruling.

“The First Amendment is a bedrock protection of fundamental rights that restrains government action at all levels,” the group wrote.

The challengers include American Tradition Partnership Inc., described on its website as opposed to “environmental extremism,” the Montana Shooting Sports Association Inc., a gun-rights and firearms-safety group, and Champion Painting Inc., a painting and drywall business with a single shareholder.

The case is American Tradition Partnership v. Attorney General for the State of Montana (STOMT1), 11-1179.

June 20, 2012

It's On: Holder Contempt Vote Set for Tomorrow

Attorney General Eric Holder did not produce any of the documents he and Oversight Committee Chairman Darrell Issa agreed on. The Department of Justice agreed to hand over 1300 pages in order to postpone tomorrow’s contempt vote. Chairman Issa demanded them by Wednesday morning.

Wednesday morning came and went. Mr. Holder turned up to the 20 minute meeting empty handed as well. Instead Mr. Holder briefed Chairman Issa and others on the documents.

Chairman Issa released this statement after the meeting:

I had hoped that after this evening’s meeting I would be able to tell you that the Department had delivered documents that would justify the postponement of tomorrow’s vote on contempt. The Department told the Committee on Thursday that it had documents it could produce that would answer our questions. Today, the Attorney General informed us that the Department would not be producing those documents. The only offer they made involved us ending our investigation.

While I still hope the Department will reconsider its decision so tomorrow’s vote can be postponed, after this meeting I cannot say that I am optimistic. At this point, we simply do not have the documents we have repeatedly said we need to justify the postponement of a contempt vote in committee.

Ranking Minority Member Elijah Cummings quickly came to Mr. Holder’s defense. He said Mr. Holder “was quite gracious and very forthright when he made the offers when he did.” Mr. Cummings forgets that the DOJ did commit to provide the documents Chairman Issa requested.

Senator Charles Grassley said Mr. Holder’s offer is unacceptable. He added, "I’m not going to buy a pig in a poke."

"The ball's in their court," Mr. Holder said afterwards. "We made what we thought was an extraordinary offer."

Operation Fast & Furious led to the death of Border Patrol Agent Brian Terry December 2010 and over 300 Mexicans. Guns have been found at 12 crime scenes across America.

June 19, 2012

US Government Reveals New Allegations Against Secret Service Agents

WASHINGTON - The U.S. Department of Homeland Security has released new details of serious allegations of misconduct against Secret Service agents since 2004. The allegations include sexual assault, leaking sensitive information, publishing pornography and involvement with prostitutes.

The long list of allegations against Secret Service officers was quietly released under the U.S. Freedom of Information Act to the Associated Press and other news organizations. The complaints include claims of illegal wiretaps, improper use of weapons and drunken behavior and a report from 2011 of a case of alleged attempted sexual assault by a male employee on a female employee during a work trip. In 2008, an on-duty Secret Service officer was arrested in Washington, D.C. in a prostitution raid. Some of the claims were resolved administratively and others are being formally investigated.

The agency provided a brief written statement saying the list reflects an intake log that includes allegations compiled over an eight-year period of time. The statement says the vast majority of the items mentioned in the log do not involve alleged misconduct by Secret Service officers, and that all allegations of employee misconduct are taken seriously and fully investigated.

The release of new allegations follows a prostitution scandal in April involving Secret Service agents sent to Cartagena, Colombia before President Barack Obama's arrival at the Summit of the Americas. Several Secret Service agents were implicated in the scandal as having brought prostitutes from strip clubs back to their hotel. Eight officers have been forced out of the agency and at least two are fighting to get their jobs back. The Pentagon is also investigating 12 military members who were allegedly involved in the Cartagena incident. Prostitution is legal in Colombia, but off-limits for U.S. government employees because of possible security risks.

The Senate Homeland Security and Governmental Affairs Committee held a hearing last month on the Secret Service prostitution scandal. Secret Service Director Mark Sullivan apologized for the behavior of the agents involved.

"I have tried to figure this out between the alcohol, the environment, these individuals did some really dumb things," Sullivan said.

The ranking member of the Senate Homeland Security Committee, Republican Senator Susan Collins, said she does not believe the misconduct in Cartegena was an isolated incident.

"I continue to believe that the problem is broader than you believe it to be," Collins said.

Some of the agents who were forced to quit have complained that rules for off-duty conduct on foreign trips were vague. Secret Service Director Sullivan rejected any suggestion that the Colombia incidents reflect a culture of misconduct.

"The thought or the notion that this type of behavior is condoned or authorized is just absurd," Sullivan said.

Several U.S. lawmakers are calling on the Secret Service to take steps, including stricter behavioral guidelines and more frequent polygraph tests, to try to prevent embarrassing and potentially risky behavior in future.

June 18, 2012

Farm Bill: The Big Government Shell Game

In her keynote address at the RightOnline Conference in Las Vegas, former Gov. Sarah Palin urged members of the new conservative media to continue to hold all members of the political class accountable, regardless of who wins in November.
Perhaps we could heed Gov. Palin’s advice right now…with the new Farm Bill legislation that is now being debated in Congress, and will set farm policy in the country for the next five years.

For many Americans who are not farmers, hearing about debate on a Farm Bill draws a yawn. The current farm legislation has been around since 1933, and most of its programs have not changed since then, despite dramatic changes in agriculture in the country.

Heritage Foundation’s Diane Katz states that the number of farms in the U.S. has decreased from 6.8 million in 1935 to 2.2 million in 2010. However, the fact that the amount of land in farms has only decreased by 13 percent suggests that, while farms are larger, they are fewer in number. Because farm subsidies, up until this point, have been distributed primarily based upon farm production, the larger farms have been the biggest winners of taxpayer-funded subsidies.

A second point to remember is that farm policy in the U.S. has allowed food production in this country to avoid the free market. Because the current policies limit the quantity of crops farmers are permitted to produce, food prices are then artificially inflated.

As a result, for the past 80 years, big government has held tightly onto the reins of America’s food production and, of course, taxpayers, by subsidizing larger farms and imposing limits on food supply. Katz sums up nicely how the Depression-era farm legislation has been another example of big government whacking taxpayers. She says, “Americans are taking a double hit: Tax revenues are used to subsidize producers, and production limits raise the cost of products.” In fact, farm bill subsidies have cost American taxpayers $284 billion over the last five years.

Many of the programs of the current farm legislation will expire in September. As conservatives are aptly making the point that free market principles, rather than taxpayer-funded subsidies to soften the effects of risk-taking, should decide costs of products, shouldn’t the same philosophy guide our new farm legislation? Shouldn’t lawmakers insist that taxpayers not fund private entrepreneurial business ventures, one of which happens to be agriculture?

Some legislators would like us to believe that the days of farm subsidies are about to end, that lawmakers will cut spending and save taxpayer money. The fact is that, instead of direct payment subsidies to farmers, Congress is now considering expanding a federal crop insurance program that would reimburse for most losses or drops in prices, potential hazards of any entrepreneurial activity. If farmed land does not yield enough crops or if food prices fall, farmers would be reimbursed through a new crop insurance program, an outcome that not only will cost taxpayers billions of dollars, but will also raise concerns about incentivizing farmers to take extraordinary risks.

The new farm legislation is welcomed by Big Agribusiness, farm lobbyists, and lawmakers who typically protect entitlement programs and come up with new ones. These sectors would like us to believe that this new farm program will save us billions of dollars in direct payment subsidies that pays farmland owners regardless of whether they plant crops. However, the truth is that the new legislation will incentivize farmers to exploit land with very high risk of crop failure. At a cost of $3 billion per year, the new crop insurance subsidy will cover any losses to farmers, known as deductibles, before their crop insurance policies pay out.

So, if you’re a farmer, why not engage in extraordinarily risky land ventures, when U.S. taxpayers are going to pay you regardless of the outcome? How is this different from any other big government bail-out?

“This is better than a government bailout,” said Steve Ellis, vice president of the Taxpayers for Common Sense, a watchdog group in Washington. “A bailout is a one-time thing when something bad happens. But crop insurance keeps giving, good or bad. And it’s about to give even more.”

Why can’t we get our act together when it comes to agricultural policies?

One of the key problems with farm policy bills is that they have been tied, in typical big government fashion, to welfare programs like the Supplemental Nutrition Assistance Program (SNAP), or food stamps. Much of the new farm bill’s spending will be on this program, at an annual cost now of about $75 billion. Severing national agricultural policy from welfare programs might be a daunting task, but one that would greatly benefit the nation. Some Senate Republicans have pushed for greater cuts to this program, but they are coming up against significant resistance from Senate Democrats and, of course, the president.

Sen. John McCain (R-Arizona) has said that the proposed farm bill would cost about $969 billion over 10 years, an increase over the $600 billion spent on the 2008 version. Similarly, Sen. Jim DeMint (R-South Carolina) observed that the alleged savings that Senate Democrats are touting in the new proposal were based on the higher baseline created by the president’s stimulus bill in 2009. Sen. DeMint noted that, compared to 2008 levels, the new farm bill will increase spending by 60%.

The new farm bill sounds like another big government shell game. We will need to stay on this one.

June 15, 2012

Obama Energy Dept. awards $2 million grant to solar company linked with Van Jones

On Wednesday the Department of Energy began financing solar power installation research with a $2 million award to Solar Mosaic. The solar energy research company has former Obama “green jobs” czar Van Jones listed as an advisor. It also employed Rebuild the Dream, Jones’ firm, to do its public relations work.

The DOE’s grant money will be distributed to nine companies in four states. Solar Mosaic received the most money, four times the amount of most other grants.

Jones resigned his post in the Obama administration three years ago amid controversy stemming from his past remarks.

Before working in the Obama White House, Jones signed a petition alleging officials in the George W. Bush administration “may indeed have deliberately allowed 9/11 to happen, perhaps as a pretext for war.”

Jones later made crude remarks about Republicans in a public speech and expressed support for Mumia-Abu Jamal, a death row inmate convicted of killing a Philadelphia police officer.

It’s unclear whether the Department of Energy knew of Jones’ position at Solar Mosaic. Agency spokeswoman Jen Strutsman told The Daily Caller that grantmaking was “decided solely on the merits of the project, assessed by career civil servants.”

“Each of the awards … was selected because of its technology and the project’s potential to reduce the cost of solar energy for American families and businesses,” she added.

Van Jones did not respond to requests for comment.

June 14, 2012

Corruption, Bribery and the "Quid Pro Quo" Conundrum

Consider the following cases:

1. Lobbyists for state casino operators seek to persuade state legislators to support a bill to legalize gambling. Casino operators, working through lobbyists, treat legislators to entertainment, perks, and suggestions of large political contributions if they support the bill. Some of these lobbied lawmakers vote for the bill. Are they guilty of bribery?

2. A governor supports a referendum for a state lottery to raise money for school funding. An individual donates $500,000 to support the referendum. The governor thereafter appoints that individual to a state agency board. The governor receives nothing in return. Is he guilty of bribery?

3. A committee closely allied to a governor receives over $2 million from gambling interests. The committee uses the money for campaign-style television and radio ads supporting the governor's agenda. After the contributions are received the governor includes a new initiative in his legislative agenda to expand gambling in the state. Is he guilty of bribery?

These cases all involve the payment of money to influence the actions of government officials. To a prosecutor seeking to root out public corruption, these cases would appear to warrant criminal investigation. But the most critical element facing a prosecutor seeking to bring a charge of bribery against these officials and lobbyists would be to determine the following: Did lawmakers in 1 vote to legalize gambling because of the perks and promised financial contributions? Did the governor in 2 appoint the person to the state board because of his contribution to the lottery referendum? Did the governor in 3 support legislation benefiting the gambling industry because of the $2 million donation to a political committee supporting his agenda?

To prove bribery, the Supreme Court has held that "payments are made in return for an explicit promise or undertaking by the official to perform an official act." Thus, in each of the above cases a prosecutor must prove -- and a jury must find beyond a reasonable doubt -- that there was a corrupt exchange, namely, that a benefit was given in exchange for something received. This element in legal parlance is called the "quid pro quo." And it is a concept that is notoriously ambiguous, treacherous, and dangerous.

Cases 1 and 2 above both come from the same state -- Alabama -- and both were prosecuted before a jury. The jury in case 1 acquitted everybody -- state legislators, lobbyists, and industry moguls -- of bribery and fraud. In case 2, however, the jury convicted then-governor Don Siegelman of bribery. Case 3 has recently received considerable attention because it involves the governor of New York State, Andrew Cuomo, a former state attorney general who recently, and ironically, created a state commission to investigate ethical misconduct by government officials.

These cases could warrant criminal prosecution if the prosecutor has sufficient evidence of the quid pro quo. Such proof could come from the testimony of witnesses who personally participated in the corrupt arrangement either in giving or receiving payments, assuming a jury believes these witnesses. Proof could also come from taped conversations by the participants containing statements admitting key facts relevant to the agreement. Proof could also come from circumstantial evidence proving the agreement implicitly, such as proof of solicitations of benefits, the receipt and acceptance of benefits, and contemporaneous statements, writings, or official actions from which a corrupt exchange is the only logical explanation.

However, the problem in all of these cases boils down to the reality of our contemporary political culture in which massive amounts of money are lavished by corporations and wealthy donors through their lobbyists for the specific purpose of influencing lawmakers -- the messy, dirty political culture of back-scratching, secret deal-making, and unsavory favors. But no matter how distasteful, the line between illegal bribery and lawful persuasion is fuzzy, uncertain, and sometimes unknown. And given that uncertainty, there is the danger that innocent persons might be dragged into the criminal net through arbitrary fact-finding and decision-making by ambitious prosecutors, ignorant judges, and confused juries. Consider this: If the line between lawful and unlawful conduct is so nebulous, couldn't every president who appoints a campaign contributor as an ambassador, and every senator who puts forward a nominee for a federal judgeship after that person contributed to the Senator's campaign, be chargeable with bribery at the whim of a prosecutor, and convicted if a judge and jury go along?

One point is abundantly clear: a prosecutor's charging power is the most dangerous power of all, because it can be used by prosecutors to target for prosecution almost anyone a prosecutor wants to get. Indeed, a Congressional Committee investigating allegations of selective prosecution by the Bush administration's Justice Department heard abundant testimony supporting that claim by Governor Siegelman -- that he was the most powerful democrat in Alabama, that state republicans desperately wanted to take him down, and according to a former U.S. Attorney in Alabama, federal prosecutors knew the case was weak but went on a "fishing expedition" to "find anything they could find against [Siegelman]." The Siegelman case may be one of the most egregiously bad faith prosecutions by the Justice Department ever, maybe even worse than the bad faith prosecutions of the late Senator Ted Stevens and John Edwards. Indeed, 113 state Attorneys General of both political parties decried the Siegelman prosecution and supported, unsuccessfully, review by the U.S. Supreme Court.

Judges also make a difference in corruption trials, and the stark difference in verdicts in cases 1 and 2 may be attributable, in part, to the competence and ethics of the presiding judges. Alabama court observers have claimed that the judge in the Siegelman trial -- Mark Fuller -- harbored a strong bias against Siegelman. His bribery instruction to the jury has been assailed for diluting the quid pro quo requirement for bribery -- he did not advise the jury that it had to find an explicit promise or understanding -- before it could convict. Even with that deficient instruction, the jury deliberated 11 days and reported itself deadlocked several times before finding guilt on only a few of the numerous counts.

And, not surprisingly, the jury that acquitted the Alabama lawmakers and casino operators were correctly instructed by an experienced and respected federal district judge Myron Thompson who told the jury that it must find a "quid pro quo agreement," which he correctly defined as "a mutual understanding between the donor and the elected official that a campaign contribution is conditioned on the performance of a specific official action." The casino defendants contended that their conduct was inappropriate, maybe distasteful, but was not criminal because there was no actual quid pro quo. And the jury agreed.

What about Governor Cuomo's conduct? The millions of dollars by the gambling industry to a committee supporting Cuomo, after which Cuomo pressed for new state legislation legalizing gambling, could constitute a bribe depending on the evidence. There certainly is an appearance of impropriety. One of the commissioners on the governor's newly created Commission on Public Integrity was "stunned" by the disclosures. But once again, proving a quid pro quo is what makes a corruption investigation so complex. There may be innuendos and suggestions of corruption. But is there proof of an actual quid pro quo? And allowing prosecutors such wide opportunities for charging bribery, as in the Siegelman case, invites prosecutorial overreaching. The Siegelman case apparently was the first bribery prosecution predicated on issue-advocacy campaign contributions. The Justice Department wanted to get him. And they did. But was it fair?

Criminal statutes should not be so malleable that whatever the ethical boundaries might be, the line between lawful and unlawful conduct is clear. As Sir Thomas More famously told the judges before they ordered his execution, "The law is a causeway upon which, so long as he keeps to it, a citizen may walk safely." To be free of prosecutorial selectiveness, judicial abuse, and jury caprice, the causeway's edges need to be clearly marked. But with so many holes, hollows, and loops, the crime of bribery may be a coin flip for some prosecutors, not a very inspiring situation.

June 13, 2012

In ND, big business rallies for property taxes

Who's lobbying to save property taxes in North Dakota? Why, it's the business lobby!

North Dakotans today are voting on a statewide constitutional amendment to abolish the property tax. The local and state chambers of commerce are full-throatedly opposing the ballot measure. The state Chamber writes:

The North Dakota Chamber of Commerce has led the largest public policy coalition in the North Dakota history, Keep it Local North Dakota, and is advocating for a NO vote on Measure 2.
For one example the Fargo Chamber of Commerce argues:

The Fargo Moorhead West Fargo Chamber of Commerce opposes North Dakota Measure 2 which seeks to eliminate property taxes statewide. The measure will appear on the June 2012 statewide ballot. Measure 2, as currently set forth, completely eliminates a major funding source for North Dakota government. Accordingly, the complete repeal of property taxation by Measure 2 will be a major disruption of the foundation of North Dakota’s economic model.

But one North Dakotan had a different explanation for me: The value of these local chambers is basically in winning special tax credits and exemptions for businesses. Without property taxes, these Chambers won't have as much to offer businesses.

Sure enough, check out the Grand Forks chamber, touting all the special tax incentives you can get, including temporary property-tax abatements.

June 12, 2012

Thieves use Social Security list to steal identities of dead people

If someone close to you recently died, you may want to look into their tax returns.

This year, the IRS will review “tax returns of 91,000 deceased Americans this year on suspicion of identity theft,” Bloomberg Businessweek reports.

A list, known as the Death Master File, is compiled by the U.S. Social Security Administration and contains birth dates and other personal information and is sold to local governments, hospitals, pension funds and private companies. The list contains the information of nearly 89 million deceased people, and once purchased, can be easily leaked to the Internet, where criminals can take the information.

When the family of five-year-old Benny Walters, who passed away from a brain tumor in 2010, went to claim him as a dependent, they were astonished to discover that someone else had already claimed him.

“It was almost like somebody had stolen him from us,” his mother told Businessweek.

Criminals use the information they find to file fraudulent tax returns, either as false income or a false dependent. They can have their returns put on a prepaid debit card, where their trail then becomes very difficult to trace.

Tax advocate Nina Olson calls this a “relatively new tactic” of identity theft. 490,000 have fallen victim to this type tax fraud since 2008.

Social Security Commissioner Michael Astrue suggests that it will take an act of Congress to restrict accessibility and release the death files to organizations that meet the certain standards.

Credit reporting agencies, insurers and other industries however fear new legislation could slow down their ability to check their names against the file to protect against other types of identity fraud.

“The faster that we can get it and the more current that information is, the more likely we can prevent the fraud that occurs in that early window right after someone dies,” CEO of the Consumer Data Industry Association, Stuart Pratt, told Businessweek.

Still, victims of fraud feel that sensitive information is being delivered too easily to thieves.

June 11, 2012

Obama’s early Chicago rise brought African-Americans foreclosures, bankruptcies

President Barack Obama wants his 2012 re-election campaign to focus on Gov. Mitt Romney’s private-sector record, but his own private-sector history shows that he promoted and profited from the nation’s disastrous real-estate bubble. One striking example comes from the president’s 1995 housing-discrimination class action lawsuit: It provided him with legal fees, greased his political donations and boosted his role in Chicago politics.

While he made personal gains, his lead African-American client, Selma Buycks-Roberson, declared bankruptcy in 2001 — and again in 2008 as she received a home foreclosure notice, according to unpublicized federal and city records obtained by The Daily Caller.

Buycks-Roberson is still likely underwater on her mortgage, owing more to her home lender than the property is worth. Her house has dropped in value by 30 percent since 2010. Its 2011 assessed value for tax purposes was $97,520, well below her 2006 mortgage of $112,400. Meanwhile, the online real-estate database Zillow estimates that home is worth just $69,400 today.

Buycks-Roberson’s story is not an anomaly. It can be found repeatedly throughout Obama’s Chicago.

By 2012, the average home equity in Chicago’s African-American neighborhoods had shriveled to $6,800, according to a March report from the Woodstock Institute, a liberal Chicago housing advocacy group. The average equity in homes in the city’s white neighborhoods is $108,000.

Fully 44 percent of homes in Chicago are underwater, compared to a national average of 31 percent, according to a Zillow-generated map.

In Buycks-Roberson’s inland neighborhood, 57 percent of homes are underwater.

Reporters have aggressively sought more information from Romney about his business record, but there is no sign that a single reporter has ever asked Obama about his role in Chicago’s housing disaster.

The closest Obama has ever come to admitting his role in the scandal came in a September 2007 speech to a Wall Street audience.

“Subprime lending started off as a good idea: helping Americans buy homes who couldn’t previously afford to,” he said.

But “as certain lenders and brokers began to see how much money could be made,” he said, “they began to lower their standards. … Most everyone knew that some of these deals were just too good to be true, but all that money flowing in made it tempting to look the other way and ignore the unscrupulous practice of some bad actors.”

“Turning a blind eye to the cronyism in our midst can put us all in jeopardy … and we cannot accept that in the United States of America.”

Read the entire article

June 8, 2012

Labor Dept. counts oil lobbyists, garbage men, bus drivers as ‘green jobs’

Under questioning by House oversight committee chairman Darrell Issa, senior U.S. Labor Department officials revealed that the Obama administration counts oil lobbyists, bus drivers, garbage men, bicycle shop employees and used-record store clerks as “green jobs.”

The exchange occurred between Issa, Bureau of Labor Statistics Acting Commissioner Josh Galvin and Assistant Secretary for Employment and Training Jane Oates at the “Addressing Concerns about the Integrity of the U.S. Department of Labor’s Jobs Reporting” hearing Wednesday in Washington:

REP. DARRELL ISSA: Well, let me — let me run you through some questions here because you’re here because we’re having a green jobs counting discussion.
Does someone who assembles turbines — is that a green job?
MS. JANE OATES: Wind turbines?
REP. ISSA: Yeah. Wind turbines.
MS. OATES: I think we would call any kind of sustainable manufacturing –
MS. OATES: — fitting the definition that was –
REP. ISSA: Does someone who sweeps — does someone who sweeps the floor in a facility that makes solar panels, is that a green job?
MS. OATES: Solar? I’ll give that to –
REP. ISSA: To Galvin?
MS. OATES: — if you don’t mind.
MR. JOHN GALVIN: We define — we have a two-part definition –
REP. ISSA: We already had the briefing on that. So just answer the question. If you’re sweeping the floor in a solar panel production facility, is that a green job?
MR. GALVIN: If you ask me for the number of health care jobs in the United States, I’ll give you the employment from the health care industry.
REP. ISSA: Look, Mr. Galvin –
MR. GALVIN: — nurses and doctors –
REP. ISSA: You did not want to come here as a witness. You are not a delighted witness. So let’s go through this.
I asked you a question. You know the answer. Would you please answer it.
If you sweep the floor in a solar panel facility, is that a green job?
REP. ISSA: Thank you. If you drive a hybrid bus — public transportation — is that a green job?
MR. GALVIN: According to our definition, yes.
REP. ISSA: Thank you. What if you’re a college professor teaching classes about environmental studies?
REP. ISSA: What about just any school bus driver?
REP. ISSA: What about the guy who puts gas in the school bus?
REP. ISSA: How about employees at a bicycle shop?
MR. GALVIN: I guess I’m not sure about that.
REP. ISSA: The answer is yes, according to your definition. And you’ve got a lot of them.
What about a clerk at the bicycle repair shop?
REP. ISSA: What about someone who works in an antique dealer?
MR. GALVIN: I’m not sure about that either.
REP. ISSA: The answer is yes. Those are — those are recycled goods. They’re antiques; they’re used.
What about someone who works at the Salvation Army in their clothing recycling and furniture?
MR. GALVIN: Right. Because they’re selling recycled goods.
REP. ISSA: OK. What about somebody who opened a store to sell rare manuscripts?
MR. GALVIN: What industry is that?
REP. ISSA: People sell rare books and manuscripts — but they’re rare because they’re old so they’re used.
REP. ISSA: What about workers at a consignment shop?
MR. GALVIN: That’s a green job.
REP. ISSA: Does the teenage kid who works full time at a used record shop count?
REP. ISSA: How about somebody who manufacturers railroads rolling stock — basically, train cars?
MR. GALVIN: I don’t think we classified the manufacture of rail cars as –
REP. ISSA: 48.8 percent of jobs in manufacturing, rail cars counted, according to your statistics. About half of the jobs that are being used to build trains.
OK. How about — just one more here. What about people who work in a trash disposal yard? Do garbage men have green jobs?
REP. ISSA: OK. I apologize. The real last last is, how about an oil lobbyist? Wouldn’t an oil lobbyist count as having a green job if they are engaged in advocacy related to environmental issues?

June 7, 2012

Judicial Watch Sues Obama DOJ for ACLU Communication Records Regarding PA Voter ID Law

WASHINGTON, June 6, 2012 /Standard Newswire/ -- Judicial Watch, the public interest group that investigates and fights government corruption, announced today that on June 1, 2012, it filed a Freedom of Information Act (FOIA) lawsuit against the Obama Department of Justice (DOJ) to obtain records detailing the agency's communications with the American Civil Liberties Union (ACLU) regarding Pennsylvania House Bill 934, commonly referred to as Pennsylvania's Voter ID law (Judicial Watch v. U.S. Department of Justice (No. Case 1:12-cv-00884)). The ACLU and allied organizations have filed a lawsuit to prevent the law, signed by Pennsylvania Governor Tom Corbett on March 14, 2012, from taking effect before the November elections.

Judicial Watch seeks the following records pursuant to its original March 30, 2012, FOIA request with the DOJ:

All records of communications between the Department of Justice and the American Civil Liberties Union (ACLU) concerning, regarding, or relating to Pennsylvania House Bill 934, commonly referred to as Pennsylvania's Voter ID law. The timeframe for this request is May 1, 2011 to March 30, 2012.

According to United States Postal Service records, the Obama DOJ received Judicial Watch's request on April 5, 2012. However, to date, the agency has failed to comply. By law a response was due no later than May 17, 2012.

Pennsylvania House Bill 934 requires voters to produce a Pennsylvania driver's license or another government-issued photo ID, such as a U.S. passport, military ID, or county/municipal employee ID. As reported by the Pittsburgh Tribune-Review, on May 1, 2012, so-called "civil rights" groups, including the American Civil Liberties Union of Pennsylvania filed a lawsuit to seek to prevent Pennsylvania' voter ID law from taking effect before the November elections. The trial is scheduled to begin on July 25, 2012.

Judicial Watch previously obtained documents from the DOJ showing that it worked hand-in-hand with the ACLU in mounting their respective legal challenges to SB 1070, Arizona's illegal immigration enforcement law that is now before the U.S. Supreme Court.

"The Obama Justice Department is supposed to be an independent arbiter of justice, not a legal battering ram for leftist special interest groups," said Judicial Watch President Tom Fitton. "It is becoming difficult to determine where activist groups such as the ACLU begin and the Obama Justice Department ends. We hope the Justice Department will abide by FOIA law and release these records so the American people can know who is running the Justice Department."

As part of its comprehensive 2012 Election Integrity Project, Judicial Watch has uncovered documents showing that the Obama DOJ has also been partnering with the ACORN-connected Project Vote, President Obama's former employer, to use the National Voter Registration Act (NVRA) to increase voter registrations for those on public assistance, which is a key Obama voter demographic, while ignoring a stipulation in the NVRA that requires states to keep voter registration lists clean. The DOJ has also filed lawsuits against Texas and South Carolina over their voter ID laws.

Judicial Watch Attorney Michael Bekesha testified on March 21, 2011, before the State Government Committee of the Pennsylvania House of Representatives. Bekesha testified that the bill was a commonsense way for Pennsylvania "to ensuring fair elections for its citizens." In addition, he testified that the bill followed the U.S. Supreme Court's specifications. Bekesha's testimony can be read here.