ProPublica

by Mike Webb

Dafna Linzer has been reporting on the presidential pardon system since late last year. What she found is that white criminals are nearly four times as likely to receive a pardon than people of color. Commutations are also dwindling. Presidents Reagan and Clinton approved roughly 1 in 100 applicants, while President George W. Bush approved 1 in 1,000. Obama has approved just 1 in 5,000.

Linzer joined the podcast to talk about the case of Clarence Aaron — an African-American man whose quest for a commutation was denied, even though he had support from the judge and prosecutor in his case. After reviewing internal documents and interviewing senior officials, Linzer showed that the pardon attorney didn't share all the evidence in Aaron's case with the White House. Linzer describes Aaron's story: the sentence he received, his response to finding out how close he came to being released and the details on another case involving a white man with a long criminal history.

Listen to the podcast and see all of the stories in our Presidential Pardons: Shades of Mercy series.

by Cora Currier

Update, 5/15: Defense Secretary Leon Panetta set new limits on F-22 flights, ordering that they stay within safe distance of a landing strips due to ongoing concerns about oxygen deficiency.

Last week, CBS’ 60 Minutes aired an interview with two of the pilots who are refusing to fly the jets. They will receive whistleblower protection, and not be reprimanded for speaking out.

The pricey F-22 Raptor jet has just gotten back up in the air, but the safety problem that grounded it doesn’t seem to be resolved.

Last year, the F-22 was grounded for four months because pilots were experiencing dizziness and other symptoms of hypoxia, which is caused by a lack of oxygen. The Air Force looked into possible malfunctions in the plane's oxygen-generation system, but in September, the planes were cleared for service after technicians were unable to pinpoint a source of the problem.

Yesterday, however, the Air Force’s Air Combat Command confirmed that some pilots — they would specify only “a very small” number — have requested not to fly the F-22.

General Mike Hostage, who heads the Air Combat Command, said in a news briefing yesterday that the Air Force is taking cautionary measures but would continue to fly the planes. “We don’t have a conclusive answer yet, and that’s why we continue to fly with the mitigating procedures, because I can’t learn about the problem if I don’t fly the airplane,” he said.

Since the planes started flying again in September, there have been more than 12,000 sorties and 11 reported instances of “hypoxia-like symptoms.” An Air Combat Command Center spokesman told ProPublica today that a team of two-dozen Air Force and outside specialists is monitoring the planes and pilots for both mechanical and medical problems regarding the hypoxia symptoms, but that no “root cause” has been determined.

Before the grounding, there had been at least 12 separate reports of hypoxia-like symptoms, and planes had been limited to flying at lower altitudes. In late 2010, an F-22 pilot died in a crash after he apparently lost control of the plane when the oxygen system malfunctioned. The Air Force’s official report on the incident acknowledged the oxygen system failure but blamed the pilot’s response for the crash.

As ProPublica has detailed, the roughly $70 billion F-22 program has long experienced structural deficiencies and cost overruns. The U.S. halted orders of the jets in 2009, as then-Secretary of Defense Robert Gates argued the F-22's specific capability was not widely applicable in the nation's “spectrum of conflict."

The planes have yet to be deployed in combat, though last week a number of them were reportedly sent to the United Arab Emirates.

by Charles Ornstein and Tracy Weber

Registered nurses at a Manhattan Veterans Affairs hospital failed to notice a patient had become disconnected from a cardiac monitor until after his heart had stopped and he could not be revived, according to a report Monday from the VA inspector general.

The incident from last June was the second such death at the hospital involving a patient connected to a monitor in a six-month period. The first, along with two earlier deaths at a Denver VA hospital, raised questions about nursing competency in the VA system, ProPublica reported last month.

The deaths also prompted a broader review of skills and training of VA nurses. Only half of 29 VA facilities surveyed by the inspector general in a recent report had adequately documented that their nurses had skills to perform their duties. Even though some nurses "did not demonstrate competency in one or more required skills," the government report stated, there was no evidence of retraining.

Monday’s report documents the June 2011 death of patient in his 80s at the Manhattan campus of the VA’s New York Harbor Healthcare System. The man had undergone several heart procedures and needed to have his vital signs continuously monitored, the report said.

On his fifth day at the hospital, monitor records show that an alarm indicated a problem with the device or the patient. But there is no evidence nurses were aware of the alarm until the man was discovered unresponsive an hour and a half later. He was declared dead shortly afterward, the report said.

“The patient’s telemetry status was not effectively monitored at the time of his death due to a lack of awareness of the disconnected lead,” inspectors concluded.

Registered nurses assigned to telemetry units typically place cardiac leads, set parameters for the monitors tracking each patient, verify heart rhythms and take appropriate actions if there is an irregularity. They also enter progress notes and inform doctors of any changes.

Ironically, federal inspectors were in the hospital the same month to investigate the first death, which occurred in a different monitoring unit in January 2011.

During that investigation, the inspectors discovered nurses at the hospital didn't understand how the monitors even worked. None of those interviewed could accurately explain what would happen if a patient became disconnected from a cardiac monitor.

Inspectors also found no evidence that the nurses' competence had been checked. Records showed that one of the patient's nurses had last received training on the monitors 13 years earlier, according the October 2011. The report recommended sweeping changes and retraining, which the hospital agreed to implement.

IG inspectors were not notified of the second death at the Manhattan facility until someone complained in November 2011, five months after the alarm was missed and the patient died.

The latest report does not recommend any additional changes or training at the hospital because “managers have made significant progress” after the first report.

In a response to the inspector general, the hospital acknowledged receipt of the report and said it concurred with the document. A spokeswoman for the VA in Washington didn’t immediately respond to our requests for comment.

by Dafna Linzer

A version of this story was co-published with The Washington Post.

Clarence Aaron seemed to be especially deserving of a federal commutation, an immediate release from prison granted by the president of the United States.

At 24, he was sentenced to three life terms for his role in a cocaine deal, even though it was his first criminal offense and he was not the buyer, seller or supplier of the drugs. Of all those convicted in the case, Aaron received the stiffest sentence.

For those reasons, his case for early release was championed by lawmakers and civil rights activists, and taken up by the media, from PBS to Fox News.

And, ultimately, the prosecutor's office and the sentencing judge supported an immediate commutation for Aaron.

Yet the George W. Bush administration, in its final year in office, never knew the full extent of their views, which were compiled in a confidential Justice Department review, and Aaron's application was denied, according to an examination of the case by ProPublica based on interviews with participants and internal records.

That Aaron joined the long line of rejected applicants illuminates the extraordinary, secretive powers wielded by the Office of the Pardon Attorney, the branch of the Justice Department that reviews commutation requests. Records show that Ronald Rodgers, the current pardon attorney, left out critical information in recommending that the White House deny Aaron's application. In a confidential note to a White House lawyer, Rodgers failed to accurately convey the views of the prosecutor and judge and did not disclose that they had advocated for Aaron's immediate commutation.

Kenneth Lee, the lawyer who shepherded Aaron's case on behalf of the White House, was aghast when ProPublica provided him with original statements from the judge and prosecutor to compare with Rodgers's summary. Had he read the statements at the time, Lee said, he would have urged Bush to commute Aaron's sentence.

"This case was such a close call," Lee said. "We had been asking the pardons office to reconsider it all year. We made clear we were interested in this case."

The work of the pardon office has come under heightened scrutiny since December, when ProPublica and The Washington Post published stories showing that, from 2001 to 2008, white applicants were nearly four times as likely to receive presidential pardons as minorities. The pardon office, which recommends applicants to the White House, is reviewing a new application from Aaron. Without a commutation, he will die in prison.

Through the Justice Department, Rodgers declined repeated requests for an interview, and the department itself declined to comment on any aspect of the Aaron case, citing "privacy and privilege concerns."

"Every clemency request — whether it be for commutation of sentence or for pardon — is considered carefully and thoroughly by the Office of the Pardon Attorney," spokeswoman Laura Sweeney said.

Last week, the American Constitution Society sponsored a panel discussion on Capitol Hill devoted to the pardon issue. President Obama's former White House counsel Gregory B. Craig said the president could issue an executive order eliminating the pardon office.

"We cannot improve or strengthen the exercise of this power without taking it out of the Department of Justice," Craig said.

He advocated for a bipartisan review panel that would report directly to the president.

The number of pardons awarded has declined sharply in the past 30 years, as have commutations. Obama has rejected nearly 3,800 commutation requests from prisoners. He has approved one. Bush commuted the sentences of 11 people, turning down nearly 7,500 applicants.

A former pardon office lawyer said some applicants have been turned down "en masse" with little, if any, review, a claim the Justice Department disputes.

Aaron, now 43 and in his 19th year behind bars, had not known how close to success his request had come, or what had barred his way, until he was contacted by ProPublica. Still, he said, it gave him hope.

"I didn't know I had that type of support" from the judge and prosecutor, he said in a phone interview from the Alabama correctional facility where he is held. "When you do the right things each day, there really are people out there watching, and for those who still haven't given me their support, I will keep working for them, too."

A High Hurdle

Aaron stumbled into the "war on drugs" near its peak, in 1992. Then a linebacker at Southern University in Baton Rouge, he introduced a classmate whose brother was a drug supplier to a cocaine dealer he knew from high school in Mobile, Ala.

Aaron was present for the sale of nine kilograms of cocaine and the conversion of one kilogram to crack, according to court records. He was paid $1,500 by the dealer.

After federal authorities busted the ring and the case went to trial, Aaron claimed his role was so limited that he knew almost nothing about the deal. But he refused to testify against friends, and others fingered Aaron as a major player and testified against him in exchange for reduced sentences.

Though it was Aaron's first criminal offense, he received the stiffest sentence of anyone involved in the conspiracy. Only Aaron and the drug supplier, who is scheduled to be released in 2014, remain behind bars.

Aaron's case gained national attention in 1999 when he appeared in "Snitch," a PBS "Frontline" documentary about prisoners serving long sentences after refusing to turn informant. The film helped him garner support in Congress and from civil rights organizations.

In January 2001, Aaron submitted an application for a commutation. He faced a high hurdle.

Between 1980 and 2010, requests for commutations rose sharply, reflecting lengthier sentences and the elimination of paroles for federal inmates, while the number of successful applicants plummeted.

"The reason that some people should have their sentences commuted is because they have been over-sentenced," said Mark Osler, a former federal prosecutor who runs the country's only law school clinic for commutations.

Under Ronald Reagan and Bill Clinton, both two-term presidents, one applicant in 100 was successful. Under Bush, approvals fell to barely better than one in 1,000. So far, Obama has commuted the sentences of fewer than one in 5,000. The only person freed by Obama had support from one of the president’s closest congressional allies, Illinois Democratic Sen. Dick Durbin.

Aaron's high profile boosted his chances, as did his track records as a model inmate. He wrote in an amended petition that he was deeply ashamed of his actions and felt "terrible remorse. I also regret that I further compounded my mistake by not admitting to my participation at trial."

But his petition had a critical weakness.

U.S. Attorney David York, the top prosecutor for the Southern District of Alabama, opposed reducing Aaron's sentence.

In 2004, then-Pardon Attorney Roger Adams recommended the White House deny Aaron's request. Adams said in a recent interview that he wrote the recommendation with some ambivalence.

"Anyone who looks at Clarence Aaron will see a really, really tough case of a young guy in prison for the rest of his life," Adams said.

His report went to the White House, where it sat for three years among a growing stack of recommendations.

A Cursory Review

In 2008, Rodgers, a former military judge and federal prosecutor, took over the pardon office and changed the way it handled commutation applications.

Under Rodgers's predecessors, staff lawyers reviewed each case, gathered pre-sentence and Bureau of Prisons progress reports and wrote recommendations based on their research.

"Some reports were shorter, just a paragraph or two," said Margaret Love, who served as a pardon attorney from 1990 to 1997. "But there was always enough of a report that you could get an idea of what the basic facts and issues were."

For the first 2 1/2 years under Rodgers, however, most petitions were handled by paralegals, not staff attorneys, and recommended for denial in batches, said Samuel Morison, a lawyer who spent more than a decade in the pardons office before leaving in 2010 to work for the Defense Department. He said Rodgers instituted the change when there was a significant backlog.

"The office types up a list of names, along with basic sentencing and offense information for each prisoner, and sends the list to the White House with a note that says the attached cases are meritless and should be denied," Morison said.

At the end of 2010, Rodgers reverted to the old system. He now assigns a lawyer, along with paralegals, to review commutation requests, the Justice Department said.

Still, in the past four years, applications from more than 7,000 prisoners have been denied — 22 times as many as were rejected during Reagan's eight-year presidency.

The Justice Department insists the accelerated process did not mean applicants got short shrift.

Rodgers "personally reviewed every application for commutation of sentence before recommending their disposition," a Justice Department official said.

The dwindling numbers have caught the eye of Supreme Court Justice Anthony M. Kennedy, who has complained publicly about the lack of commutations. "A people confident in its laws and institutions should not be ashamed of mercy," Kennedy said in a 2003 speech to the American Bar Association. He urged members to tell president and governors, "this young man has not served his full sentence but he has served long enough. Give him what only you can give him. Give him another chance. Give him a priceless gift. Give him liberty."

But applicants who most need the pardon office’s support have increasingly hit a wall, advocates say.

"We have never found a political opposition to the idea or concept of commutations," said Mary Price, vice president of Families Against Mandatory Minimums, a group that pushes for judicial discretion in sentencing and, in certain cases, shortening of terms. "The chief impediment lies in the pardon attorney’s office."   

A Nine-Year Odyssey

The White House sent Aaron's application back to the pardon office for reconsideration in early 2008 as part of a larger push to find clemency candidates.

According to former White House counsel Fred Fielding, his staff had become frustrated by the lack of positive recommendations from the pardon office. In Bush's final year in office, lawyers began searching through denial recommendations for promising cases and found Aaron.

This time, key elements shifted in Aaron's favor. Unlike her predecessor, Deborah J. Rhodes, the new U.S. attorney for the Southern District of Alabama, supported the petition.

"I have reviewed various documents submitted by Clarence Aaron in support of his petition for commutation of sentence and agree that Aaron should receive a commutation of his life sentence," her November 2008 memo to Rodgers began.

Rhodes suggested Aaron's triple life sentence be commuted to the equivalent of a 25-year sentence, with credit for good behavior. Under this calculation, Aaron would be released in 2014.

U.S. District Court Judge Charles Butler Jr., who had sentenced Aaron, changed his earlier stance of no position, opting this time to support commutation.

"Looking through the prism of hindsight, and considering the many factors argued by the defendant that were not present at the time of his initial sentencing, one can argue that a less harsh sentence might have been more equitable," he wrote in response to a motion filed by Aaron's attorneys.

In a phone interview with the pardons office on Dec. 2, 2008, Butler told Morison, the lawyer in the office, that Aaron "should be granted relief" by the president immediately.

Morison sent an e-mail to Rodgers sharing his transcribed notes from the call with Butler. Morison asked Rodgers if he should update the draft recommendation on file for Aaron's release in light of the views expressed by Rhodes and the judge. Rodgers responded minutes later: "Thanks Sam. I'll take it from here."

Instead, Rodgers offered no new recommendation to the White House and did not revise the old one. He did not pass on years of favorable prisoner reports describing Aaron's successful rehabilitation. He also made no mention of an affidavit Aaron filed with the pardons office in 2007 in which he expressed further remorse and asked "for a second chance to be a productive citizen."

Rodgers resubmitted the 2004 denial recommendation, unchanged, to the White House.

In an email the next day to Kenneth Lee, associate White House counsel, Rodgers did not disclose that Rhodes and the sentencing judge now agreed that Aaron should receive an immediate commutation. He told Lee that Rhodes suggested Aaron's sentence should be commuted to a term of 25 years "at some point." Rodgers also said that Rhodes believed "Aaron's commutation request is about 10 years premature."

No such language is in Rhodes's memo.

All Rodgers told the White House about Butler's views was that the judge had "no objection to commuting the sentence presently."

Rhodes would not comment on Rodgers's handling of the petition except to reiterate that she had recommended an immediate commutation for Aaron.

"I reviewed the case myself and thought it was a good one," she said.

Butler declined to comment for this story.

The Justice Department would not answer questions about the way Rodgers characterized the views of Rhodes and Butler, or how Rodgers had arrived at his recommendation on Aaron.

Lee, the former associate White House counsel, said Rodgers had presented the views of Rhodes and Butler "in the least favorable light to the applicant."

Referencing ProPublica's findings on presidential pardons — that whites were nearly four times as likely to be pardoned than minorities — he also expressed concern that the office's approach to the case could have been affected by race. Aaron is African American.

"Had we known before about a potential subconscious bias in the office," Lee said, "we would have liked to look at the actual letters in the Aaron case rather than rely on the pardon attorney's summary."

In response to the ProPublica findings, the Justice Department said it took the concerns seriously and was reviewing the statistical analysis in the article.

Reed Prior

On Dec. 23, 2008, the day Bush denied Aaron's petition, he commuted the term of another man, Reed Prior, who was serving a life sentence for his fourth drug offense.

Prior was a major dealer of methamphetamine at the time of his conviction in 1996, according to Justice Department records.

When he was busted, police found 869 grams of meth plus nearly $18,000 in cash. He was convicted for possession, with intend to distribute.

Prior refused to cooperate with prosecutors in the Southern District of Iowa. At 46, he received a mandatory life sentence.

Prosecutors in Des Moines vehemently opposed Prior's commutation request.

According to a copy of the recommendation sent from the pardon attorney to the White House, U.S. Attorney Matthew G. Whitaker wrote that a commutation for Prior "would have a detrimental impact on law enforcement efforts in this community as (Prior) would essentially be rewarded despite his failure to provide full and truthful information about his criminal activity and his associates."

Prior's initial application for commutation was denied in December 2007. A year later, he reapplied.

This time, he had the support of influential family friends, senior judges and the wife of Iowa's then-governor. In addition to petitioning through the pardon office, Prior's lawyer met with Fred Fielding, the White House counsel.

A week later, Prior was ordered freed after 14 years of incarceration.

"Going through the pardons office didn't work," said Robert Holliday, the Des Moines lawyer who handled Prior's case for free.

"Going directly to the White House did."

Prior, who is writing a memoir, compared his fortune to that of winning a lottery. "When I see those megamillions ticket-buyers, I think about myself sometimes." Of Aaron, Prior said he hoped President Obama would commute his sentence. "I watched 'Snitch' while in prison and remember his case."

Lee said the White House was persuaded that Prior deserved to be released.

"There was evidence that he had been rehabilitated and adjusted well during his prison sentence," Lee said. "He seemed to have shown remorse for his actions and was very active in his prison community, helping others out and had been a changed man."

Talladega

Aaron remains in a federal penitentiary in Talladega, Ala.

He spent the first dozen years of his sentence at maximum security prisons in Florida and Georgia, where he completed a two-year religious-studies correspondence course through Emory University. He also took courses in microeconomics, Spanish, photography and behavioral development

In 2007, he was transferred to the medium-security facility in Talladega, where he helped bring a new textiles factory onlineand works as a clerk, assisting the factory accountant.

"A lot of people think I'm crazy, to do self-help programs and stay out of trouble with a sentence like mine," Aaron said. But "from the first day I walked into the federal prison system, I just continued to better myself and educate myself."

He's acutely aware of all the milestones he has missed - family birthdays, his college graduation. In 2005, his younger sister Stephaine died suddenly during radiation treatment for skin cancer. Aaron said he calls her daughters every week.

Bush formally denied Aaron's request on Dec. 23, 2008. Aaron learned of the decision three weeks later when Rodgers sent formal notification to his attorney.

In April 2010, Aaron submitted a new petition for commutation. It is pending.

"If I was to be granted that commutation," Aaron said, "the president who backed me wouldn't regret it, because I would work hard every day to prove my worthiness."

by Justin Elliott

Rep. Bill Owens, D-N.Y., said today that he will personally reimburse a Taiwan university for the $22,132 trip he took to the island with his wife in December.

The announcement comes after ProPublica co-published a story Thursday evening with Politico detailing how lobbyists for Taiwan from the New York firm Park Strategies invited Owens and organized the four-day trip. House rules passed after the Jack Abramoff scandal prohibit members from taking trips arranged by lobbyists.

“In an abundance of caution, and to avoid any question about the purpose of the travel, which was to bring jobs to New York, or about whether it was appropriate for the sponsor to pay for its costs, I am reimbursing the sponsor personally for the full value of the trip,” Owens said in a prepared statement.

Owens said he does not believe the trip, paid for by the Chinese Culture University, broke House rules:

We closely followed the (House) Ethics Committee's process to seek advance approval for the trip, which we obtained. Because the sponsor, the Chinese Culture University, did not employ or retain lobbyists or foreign agents, and because no lobbyist or foreign agent was traveling with me or paying for the trip, we did not understand that our contacts with an agent for the Taipei Economic and Cultural Representative Office could affect the trip's permissibility. We made every effort to comply with the standards of conduct and continue to believe that no rules were violated.

The ethics committee has not offered comment in response to calls and emails. As we reported Thursday, Owens mandatory pre-travel filings with the ethics committee did not mention the role of Park Strategies lobbyists organizing the trip.

House rules state: “Member and staff participation in officially-connected travel that is in any way planned, organized, requested, or arranged by a lobbyist is prohibited.”

Documents the firm filed with the Justice Department under the Foreign Agents Registration Act include emails and contact logs showing how firm founder Al D’Amato and vice presidents Sean King and John Zagame spent months organizing the trip with Owens staffers. The lobbyists are registered foreign agents for the Taipei Economic and Cultural Representative Office (TECRO), Taiwan’s de facto embassy in Washington.

Matt Doheny, the Republican challenging Owens in a tight race to represent the newly drawn 21th district in northern New York, released a statement earlier Friday criticizing the trip.

“Bill Owens’ call to lobbyists — who are also, incidentally, campaign donors — to ‘super-size’ his trip is emblematic of everything that’s wrong in Washington,” Doheny spokesman Jude Seymour said in the statement. “We ask our members of Congress to represent our interests. Bill Owens would rather take a $22,000 trip to a foreign country with his wife than find ways to fix this ailing economy and get constituents back to work. We can do much better.”

The Upstate New York Tea Party also released a statement Friday calling on Owens to resign, according to the Albany Times-Union.

TECRO did not respond to requests for comment on Owens’ decision to reimburse the costs of the trip.

Update: Dana Sanneman, executive assistant to Park Strategies founder Al D'Amato, sent this statement to ProPublica Friday afternoon:

Congressman Owens’s trip was reviewed and approved by the House Ethics Committee, and complied with House rules. We have consulted with Counsel who has determined that our limited contact with Congressman Owens and his staff regarding this trip fell well within what is permissible under House rules. We reported and disclosed all contacts with Congressman’s Owens’s office as per our Foreign Agents Registration Act (FARA) obligations. There was never any attempt to evade or circumvent any law or regulation. In all cases, we complied with the letter and spirit of any and all relevant laws and regulations.

Filings Park Strategies made with the Justice Department show more than 30 contacts between the firm and the congressman and his staff between August and January. Those contacts include emails, phone calls — including one between D’Amato and Owens —and an in-person meeting between King and the congressman in Washington. King, the Park Strategies executive who originally invited Owens on the trip, also corresponded with one of the congressman’s aides while Owens was in Taiwan.

In an interview Friday with North Country Public Radio, Owens acknowledged that “the first impetus for this specific trip” came from Park Strategies.

As for the role of the lobbyists in organizing the trip, he said: "I can tell you from my perspective that I would never engage in that kind of activity again without disclosing it to [the Ethics Committee]," he said.

by Blair Hickman

Here are this week's top must-read stories from #MuckReads, ProPublica's ongoing collection of the best watchdog journalism. Anyone can contribute by tweeting a link to a story and including the hashtag #MuckReads, or by sending an email to MuckReads@ProPublica.org. The best submissions are selected by ProPublica's editors and reporters and then featured on our site and @ProPublica.

U.S. Military Taught Officers: Use ‘Hiroshima’ Tactics for ‘Total War’ on Islam, Wired

Before the U.S. military suspended a course on Islam for senior officers, instructors lectured that a "total war" would be necessary to protect the United States from an Islamic menace. "Islam must change, or we will facilitate its self-destruction," said one of the teachers.

Contributed by @elliottjustin

Ultra-Orthodox Shun Their Own for Reporting Child Sexual Abuse, The New York Times

In a two-part series, The Times examines an insular ultra-Orthodox Jewish community in Brooklyn, the largest of its kind outside Israel, which shuns members for reporting sexual abuse to police. “There is no nice way of saying it,” said one community member. “Our community protects molesters. Other than that, we are wonderful.”

Contributed by @kleinmatic

Playing With Fire, Chicago Tribune

Toxic flame retardants are packed into American homes under the guise that their protective benefits outweigh the health risks. Unfortunately, that belief is the result of the industry’s decades-long “campaign of deception” that downplayed the risks and overhyped the effectiveness of their products, which often don’t work.

Contributed by @craignewman

Credit Scars, The Columbus Dispatch

A year-long review of 30,000 complaints filed against credit-reporting agencies revealed a massive number of mistakes — “that’s not my name; my house did not foreclose; I’m not dead” — which, no matter how small, can have huge ramifications on consumers’ credit.

Contributed by @paulkiel

What did vets charity do with $56M? CNN

The Disabled National Veterans Foundation has spent more on marketing services than on actually helping veterans. A private company runs its fundraising, which often ends up costing more than $1 to raise $1. The foundation does sometimes send charities "badly needed" donations. "They sent us 11,520 bags of coconut M&M's," said one charity's executive director. "We didn't have a lot of use for 11,520 bags of coconut M&M's."

Contributed via e-mail by Devna Shukla

Mitt Romney’s Prep School Classmates Recall Pranks, But Also Troubling Incidents, The Washington Post

A look at the presumed Republican presidential nominee in prep school (complete with slideshow) that has raised questions about whether Romney bullied a fellow student who later came out as gay.

Contributed by @kleinmatic

These stories and many more can be found at ProPublica. You can also follow ProPublica on Twitter. Reader submissions are key to making #MuckReads a success — please contribute!

by Justin Elliott

Update May 11, 2012: Rep. Bill Owens announces he will reimburse costs for Taiwan trip.

Two days after Christmas last year, Rep. Bill Owens, D-N.Y., and his wife, Jane, boarded a first-class flight to Taiwan for a four-day tour of the island. Owens and his wife roomed at $500-a-night luxury hotels and enjoyed fine meals between meetings with Taiwanese officials and a day trip to Taipei’s famed National Palace Museum.

The Chinese Culture University in Taiwan had ostensibly invited the congressman and his wife “to promote international cultural exchange.” In fact, lobbyists for Taiwan’s government had organized the trip. Congressional ethics rules prohibit members from participating in most trips arranged by lobbyists. 

Although Owens filed a travel disclosure with the House Ethics Committee that identifies the trip’s sponsor as the Culture University, email messages and other documents reviewed by ProPublica show that lobbyists from the New York firm Park Strategies, founded by former New York Sen. Al D’Amato, had invited Owens on the trip and spent four months organizing it.

A rule passed by Congress after the Jack Abramoff scandal states: “Member and staff participation in officially-connected travel that is in any way planned, organized, requested, or arranged by a lobbyist is prohibited.”

Besides D’Amato, others involved in arranging the trip included two executives at his firm, John Zagame and Sean King, son of Rep. Peter King, R-N.Y. The Park Strategies lobbyists are registered foreign agents for the government of Taiwan.

“Lobbyists are not supposed to be associated with this trip in any way — they are not supposed to be organizing this or orchestrating it,” said Public Citizen’s Craig Holman, who helped draft the post-Abramoff reforms.

The Ethics Committee investigates potential rule violations and can recommend penalties, such as censure or a fine, to the full House. The committee approved Owens’ trip before he left, but the congressman's filings with the panel listed only the Culture University as sponsor and did not mention Park Strategies.

Both Park Strategies and Owens’ spokesman told ProPublica they believe the trip complied with House rules.

Congress adopted the rule barring lobbyist involvement in most congressional travel after abuses exposed by the Abramoff influence-peddling scandal. Trips were a favorite method of Abramoff to warm members of Congress and staffers to his clients’ interests. In the most serious case, Rep. Bob Ney, R-Ohio, was sentenced to 30 months in prison in 2007 after admitting he accepted luxury travel and other gifts from Abramoff while helping the lobbyist’s clients.

Park Strategies’ organizing role in the Owens trip stands out because it is documented by an unusually rich trove of email and other records filed by the firm with the Justice Department under the Foreign Agents Registration Act, which requires disclosure of congressional contacts by lobbyists for foreign governments, businesses and political organizations, among others.

The episode also sheds light on Park Strategies’ work to influence Congress on behalf of Taiwan. The nation is constantly seeking greater military and diplomatic aid from the U.S. in its standoff with China, which considers the island a breakaway territory.

Park also has worked to advance Taiwanese commercial interests in the U.S., including arranging meetings with a semiconductor manufacturer that has business in upstate New York. Owens, who has served in the House since 2009, represents a rural swath of northern New York including areas bordering Vermont and Canada.

Flying First Class

Owens’ Taiwanese hosts spent $360 per day for meals for the congressman and his wife, or a total of $1,440 for the four-day trip, ethics committee filings show. Lodging for the couple at the Grand Formosa Regent Taipei and the Ambassador Hotel Kaohsiung averaged $520 per night. First- and business-class flights to and from Taipei cost more than $19,000 for the couple. 

The grand total for the trip: $22,132.

D’Amato’s Park Strategies signed up as a foreign agent for Taiwan’s de facto embassy, known as the Taipei Economic and Cultural Representative Office (TECRO), in 2009. The firm has recently worked to increase congressional pressure on the Obama administration to sell advanced F-16 fighter jets to Taiwan — a top priority of that government. In a shift last month, the administration signaled it might approve the sale.

It’s been a lucrative account for the firm, with Taiwan paying more than $250,000 in 2011 alone, filings show.

The man “leading the firm’s push into Asia” is Sean King, a former Bush administration Commerce Department staffer. His father, Rep. King, is a longtime D’Amato ally going back to their days together in the Nassau County Republican Party. The elder King considers D’Amato his mentor. Sean King divides his time between New York and Park Strategies’ office in Taipei, where he also maintains a residence, according to his official bio.

Between August and January, there were 35 exchanges about the trip between Park Strategies lobbyists and Owens and his aides — by phone, email and in person — including a December call between D’Amato and Owens.

The planning appears to have started in early August 2011, when Zagame and Sean King met for lunch at KyoChon Chicken at Fifth Avenue and 32nd Street in Manhattan to discuss the trip and other matters. They billed Taiwan for the $50 check.

Later that month, King and Zagame, a former New York state assemblyman and D’Amato's chief of staff in the Senate, reached out to Owens’ chief of staff and his senior legislative assistant, Jon Boughtin.

King sent Boughtin a draft itinerary in mid-October. “This gives Mr. Owens a rough idea of what he might expect if he goes,” King wrote. “It can be adjusted as per his needs and wishes to incorporate whatever other stops, or meetings, he might want to make.”

At the end of the month, Boughtin checked with King about the funding of the trip. Boughtin wanted to make sure the trip would be covered under a 1961 law called the Mutual Educational and Cultural Exchange Act (MECEA).

“YES, it would be,” King replied.

The Constitution bars gifts from foreign governments to U.S. officials unless Congress specifically authorizes them. But under the MECEA law, the State Department can approve programs to promote culture exchange that are proposed by other countries. Once a program is approved — Taiwan’s was OK’d in 2006 — members of Congress can take a qualifying trip paid by that government.

But Owens’ trip was not paid under MECEA, which strictly applies to programs funded by foreign governments. Instead, a private entity — the Chinese Culture University — was brought in to pay for it. Spouses and other family members are not allowed to go on MECEA trips, and Owens’ wife was to accompany him, emails show.

Park Strategies regularly asks members of Congress and staff to travel to Taiwan. For example, Rep. Tom Reed (R-N.Y.) went there in October on a Park organized trip, although it was paid for under the MECEA program.

‘Whenever’s Good For Rep. Owens’

In November, Boughtin was proposing possible trip dates in email messages to Sean King. “Whenever's good for Rep. Owens is I'm sure also good for Taiwan,” King wrote in a Nov. 3 email.

Later that month, Boughtin’s requests had shifted: Owens’ wife was now involved. “The boss and his wife are looking to travel to Taiwan beginning on December 27th,” he wrote Nov. 21.

A week later, the Chinese Culture University entered the picture. Its president sent Owens and his wife an official invitation to visit Taiwan during the dates Boughtin had specified to King.

Why was the school paying for the trip? In a filing with the House Ethics Committee, the school explained: “The Chinese Culture University aims to promote international cultural exchanges in order for it to thrive in a world increasingly engineered by an irresistible thrust towards globalization.”

The itinerary accompanying the filing was in the same format as the sample itinerary King had sent to Boughtin, and many of the stops were the same.

On Dec. 5, a few days after the university sent Owens the invitation, King traveled to Washington to meet with Owens and a staffer about the trip. The next day, Owens’ office filed a required pre-trip request form with the House Ethics Committee. On Dec. 7, D’Amato and Owens discussed the trip by phone.

Also on Dec. 7, China Airlines sent confirmation of the flight to Taiwan to a pair of Owens staffers.

There were nine more contacts between Parks Strategies lobbyists and Boughtin about the trip before Owens and his wife departed Dec. 27. During the trip itself, King had two contacts with Boughtin, and another after the trip was over Jan. 3.

Taiwan Embassy Involvement

Park Strategies appears to have proposed this kind of handoff to a private sponsor to at least one other member of Congress who wanted to travel with a family member. In one email last year, LaShaun Lesley, then the firm’s compliance coordinator, wrote to the chief of staff of Rep. Bill Shuster, R-Pa., about a trip to Taiwan for Shuster and his son.

“About a week ago, you and I spoke about Congressman Shuster possibly travelling to Taiwan with his son and having it paid through a private sponsor,” she wrote. “In principle, we've been told by Taiwan's representatives that travel to Taiwan through a private sponsor can in fact be arranged.”

The trip never happened.

As for the Owens trip, there is little evidence that the Chinese Culture University was involved other than hosting a dinner for the congressman. But Taiwanese government officials appear in many of the planning documents.

In two November emails between King and Boughtin, the name of Frank Lee, the director of the Taipei Economic and Cultural Representative Office's congressional liaison division, comes up. On Nov. 21, Boughtin told King the final dates of the trip, adding, “I'll reach out to Mr. Frank Lee about the details but wanted to let you know. Thanks!”

A week later, King offered more help on the trip planning. Boughtin responded, “So far so good! I think the Embassy [TECRO] has what they need from us so far, but I'll let you know when I know more.”

Lee told ProPublica that King had reached out to TECRO about Owens traveling to Taiwan. “Sean asked me to work with the member’s office,” Lee said.

Since the Chinese Culture University doesn’t have any staff in the United States, Lee said, “Our job is to help arrange the trips.” He said TECRO did not provide any funds to the university for congressional trips, which the school has also sponsored in the past.

He said he understood that King, as a lobbyist, was not allowed to organize trips for members. But Lee said, “[King] just passed a message to this office, and we just took it over.” Asked about the email messages and contact logs showing extensive discussions between Park Strategies and Owens’ office about the trip, Lee referred questions to Park Strategies.

“While Park Strategies did ask Congressman Owens to visit Taiwan, and also offered input regarding his travel agenda, the trip was sponsored by Taiwan’s Chinese Cultural University,” Park Strategies Managing Director Christopher D’Amato said in a statement.

D’Amato, the former senator’s son, maintained the trip did not violate congressional travel rules because “lobbyist involvement in planning, organizing, requesting, or arranging Members’ overseas travel is permitted for travel that is sponsored by an institute of higher education.”

There is an exception for institutions of higher education in the prohibition on lobbyist-organized trips, but it applies only to American institutions. The House rules state that lobbyists can organize trips “when the travel is sponsored by an institution of higher education within the meaning of section 101 of the Higher Education Act of 1965.” Section 101 defines schools as existing in the United States.

Park declined to comment further.

The Chinese Culture University did not check the box defining itself as an institution of higher education on its pre-trip filing with the Ethics Committee. 

Owens spokesman Sean Magers told ProPublica in a statement: “Congressman Owens filed all the necessary paperwork with the House Ethics Committee and conducted the trip with their approval. The trip was planned through significant communication with the embassy of Taiwan, and we believe it was conducted within full compliance of House rules.”

The ethics committee did not offer comment in response to multiple calls.

Pitch to Taiwan Semiconductor

As part of his trip, Owens met with an executive from Taiwan Semiconductor Manufacturing Company to pitch the company on upstate New York, where a competing company is building a chip fabrication plant. The latter project was made possible with more than $1 billion in state incentives.

“They were receptive but not committal,” Owens told the Watertown Daily Times.

Park Strategies also represents Mohawk Valley EDGE, an economic development agency in central New York, according to a Park Strategies email from November. Officials from the Mohawk agency, which covers an area that includes part of the redrawn district in which Owens is seeking re-election, also traveled to Taiwan last summer to visit the semiconductor maker.

Park Strategies is one of the fastest-growing lobby shops in New York, having taken in more than $3 million in state and local business in 2011, according to a Newsday analysis of state lobbying records.

In the months after Owens returned from his trip, Park Strategies executives, including King, D’Amato’s brother Armand, and Christopher D’Amato, collectively donated $3,500 to Owens’ campaign. D'Amato's wife, Katuria, also gave Owens $2,500. Owens' contest against Republican Matt Doheny is rated a “pure tossup” by The Rothenberg Political Report.

The congressman doesn’t appear to have voted on any Taiwan issues since he returned in January. In July, just before the trip planning got under way, Park Strategies’ King asked Boughtin to have the congressman sign a letter supporting the F-16 sale to Taiwan.

Boughtin emailed him back: “[W]e're on board. All set!”

Owens’ spokesman said the Taiwan letter and the trip were unrelated. Nearly 200 other lawmakers also signed the letter.

by Cora Currier and Lena Groeger

by Charles Ornstein and Tracy Weber

A version of this story was published in The Washington Post.

As the U.S. Senate Finance Committee launched an investigation Tuesday into makers of narcotic painkillers and groups that champion them, a leading pain advocacy organization said it was dissolving "due to irreparable economic circumstances."

The American Pain Foundation, which described itself as the nation’s largest organization for pain patients, was the focus of a December investigation by ProPublica in The Washington Post that detailed its close ties to drugmakers.

The group received 90 percent of its $5 million in funding in 2010 from the drug and medical-device industry, ProPublica found, and its guides for patients, journalists and policymakers had played down the risks associated with opioid painkillers while exaggerating the benefits.

It is unclear whether the group's announcement Tuesday evening — that it would "cease to exist, effective immediately" — was related to letters sent earlier in the day from Sens. Max Baucus, D-Mont., the finance panel chairman, and Charles Grassley, R-Iowa, to the foundation, drug companies and others.

In the letters, the senators cited an "an epidemic of accidental deaths and addiction resulting from the increased sale and use of powerful narcotic painkillers," including popular brand names like Oxycontin, Vicodin and Opana.

Growing evidence, they wrote, suggests that drug companies "may be responsible, at least in part, for this epidemic by promoting misleading information about the drugs' safety and effectiveness."

The American Pain Foundation's website carried a statement Tuesday night saying its board had voted May 3 to dissolve the organization because it couldn't stay "operational." The foundation did not respond to requests for comment Tuesday.

The senators are targeting a who's who of the pain industry, seeking extensive records and correspondence documenting the links, financial and otherwise, between them and the makers of the top-prescribed narcotic painkillers.

Letters went to three pharmaceutical companies, Purdue Pharma, Endo Pharmaceuticals and Johnson & Johnson, as well as five groups that support pain patients, physicians or research: the American Pain Foundation, American Academy of Pain Medicine, American Pain Society, Wisconsin Pain & Policy Studies Group, and the Center for Practical Bioethics.

The Federation of State Medical Boards, the trade group for agencies that license doctors, received a letter, as did The Joint Commission, an independent nonprofit that accredits hospitals nationwide and made pain management a national priority in 2001.

A report by the U.S. Government Accountability Office in 2003 noted that the commission partnered with Purdue Pharma, the maker of Oxycontin, to distribute pain educational materials nationwide. The committee's letter to Purdue noted that the company pleaded guilty in 2007 to federal criminal charges that it misled regulators, physicians and consumers about Oxycontin's risk of addiction.

The senators requested payment information since 1997 to 10 groups and eight people, including two doctors featured in ProPublica's December report. They asked about any influence the companies had on a 2004 pain guide for physicians that was distributed by the Federation of State Medical Boards; on the American Pain Society's guidelines; and on the American Pain Foundation's Military/Veterans Pain Initiative.

In addition to citing ProPublica's work, the letters also mention the reporting of the Milwaukee Journal Sentinel and MedPage Today.

Patients in serious pain need access to opioids, the senators wrote, but drugmakers and health-care groups "must distribute accurate information about these drugs in order to prevent improper use and diversion to drug abusers."

"The problem of opioid abuse is bad and getting worse," Sen. Grassley said in a statement. "Something has to change."

"When it comes to these highly addictive painkillers, improper relationships between pharmaceutical companies and the organizations that promote their drugs can put lives at risk," Baucus said in a prepared statement.

Dr. Andrew Kolodny, chairman of psychiatry at Maimonides Medical Center in Brooklyn, N.Y., and president of Physicians for Responsible Opioid Prescribing, applauded the investigation.

"These groups, these pain organizations … helped usher in an epidemic that's killed 100,000 people by promoting aggressive use of opioids," Kolodny said. "What makes this especially disturbing is that despite overwhelming evidence that their effort created a public health crisis, they're continuing to minimize the risk of addiction."

Concerns about the overuse and abuse of painkillers have intensified in recent years. As sales of the powerful drugs have boomed — rising 300 percent since 1999 — so, too, have overdose deaths. Opioids were involved in 14,800 overdose deaths in 2008, more than cocaine and heroin combined, according to the U.S. Centers for Disease Control and Prevention.

In 2009, the use and misuse of the drugs were cited in more than 475,000 emergency department visits, nearly doubling the 2004 number, the CDC said.

Pain doctors and patient groups say that while drug overdoses are a legitimate concern, only a small percentage of deaths involves patients who receive them from their doctors. Most deaths involve illicitly obtained drugs, statistics show.

The groups also say that patients' risk is low if they do not have addictive personalities, and that any restrictions should not punish patients who suffer from serious pain.

In recent weeks, two articles in medical journals have documented different aspects of abuse.

According to a paper published online this week by the Archives of Pediatrics & Adolescent Medicine, one of every eight high school seniors surveyed said they had used prescription opioids for nonmedical reasons.

A paper released last month by The Journal of the American Medical Association found that the rate of newborns diagnosed with drug withdrawal jumped threefold from 2000 to 2009. And the rate of mothers using opioids at the time of delivery was five times higher in 2009. (Not all babies born to mothers using the drugs exhibit signs of withdrawal.)

Janssen Pharmaceuticals, a Johnson & Johnson subsidiary that makes the painkiller Nucynta, said in a statement that it "is committed to the responsible prescribing and appropriate use of opioid pain medications" and has supported educational websites about safe use.

The company is reviewing the senators' letter and "will work with them to fulfill their request for information," spokesman Mark Wolfe said via email.

Purdue Pharma acknowledged in a statement that it had received the letter, was reviewing it and looked forward to "cooperating with the committee on this matter."

Endo did not return a request for comment. A spokeswoman for The Joint Commission said the group had just received the senators' letter and had no comment yet. The Federation of State Medical Boards responded but did not offer immediate comment.

by Lena Groeger

Last week’s media coverage of the Obama administration’s newly-proposed fracking rules focused so heavily on how drilling companies would have to disclose the chemicals they use that it largely overlooked the toughest provisions: Drillers would be required to test the physical integrity of their wells, and more water would be protected from drilling. Since many wells fail because the cement and casings crack, the new tests could prevent dangerous leakages.

One major limitation: Although widely understood as “national” guidelines, the draft rules would in fact only apply to a sliver of the nation’s natural gas supply. That’s because they would apply to mineral rights managed by the Bureau of Land Management, which means areas beneath most BLM and tribal land, but scarcely any U.S. Forest Service, private or state-owned lands – where most drilling occurs. Industry has criticized the proposed rules as too restrictive.

The draft rules would require companies to conduct “mechanical integrity tests.” These include pressure tests to make sure that the well can withstand the highly pressurized fluid used for fracking. Ensuring that wells are properly sealed is considered critical for preventing water and ground contamination.

The proposed rules also expand the scope of water protected from drilling to include not just fresh water but all “usable water” – meaning lower quality water used for agriculture and construction, as well as water that can be treated to make potable. Currently, only water with up to 5,000 parts per million of total dissolved solids is protected by the BLM. The new rules would expand that definition to include water with up to 10,000 parts per million, which matches the EPA’s definition for an underground source of drinking water.

“The proposed rule will modernize our management of well stimulation activities – including hydraulic fracturing – to make sure that fracturing operations conducted on public and Indian lands follow common-sense industry best practices,” Secretary of the Interior Ken Salazar said in a statement.

The lands covered by the proposed rules are the source of “11 percent of the Nation’s natural gas supply and five percent of its oil,” according to the BLM. About 3,400 wells are drilled on these lands each year, according to the bureau, and 90 percent of those wells use hydraulic fracturing, a technique to extract natural gas by injecting into the earth highly pressurized fluids laden with chemicals, sometimes including potentially toxic ones such as benzene and lead.

Environmental activists wonder how likely the rules are to be enforced. In New Mexico, for example, the BLM oversees more than 30,000 active wells ­– with only 69 inspectors. “However strong the rules are, enforcement is only as good as staff on the ground,” said attorney Erik Schlenker-Goodrich of the Western Environmental Law Center.

Environmentalists also lambasted a provision that would require companies to disclose the chemicals they use to frack on some public lands. At issue was timing: The draft rule would allow companies to complete drilling before they make public the chemicals they had injected into the ground. Although some drilling companies report the chemicals they use to online public registries, they are not always required to do so. Many drillers claim that disclosure would amount to revealing “trade secrets.”

The timing of disclosure matters. Landowners who want to see if a nearby well is polluting their land or water need a baseline assessment of chemicals that are present before drilling. If they don’t know the chemicals the company will inject, the only way to get a baseline reading is to test for a vast number of chemicals, an expensive and impractical undertaking.

“Knowing after the fact is nice, but does not allow for any steps to be taken if the chemicals being used are of concern to the public. I urge the Interior Department to strengthen this rule,” Congressman Maurice Hinchey (D-NY) said in a statement. Hinchey co-authored national legislation to give the EPA the power to monitor all fracking activities in the U.S., which under current law the agency cannot regulate.

The proposed disclosure rules would not demand much more than the standards some states already have in place. For example Colorado and Wyoming have large swaths of public lands targeted by the draft rules, but they already have disclosure regulations that are equally stringent, if not more so, than the federal proposal. Colorado requires that companies disclose the chemicals they use in addition to their concentrations within 60 days of fracking activities. Wyoming requires disclosure of chemicals both before and after fracking, although its regulation has been criticized for not making all of those disclosures public.

“It seems like BLM has looked at state rules as a ceiling, not as a floor, for what should be done,” said attorney Schlenker-Goodrich, who charged that the administration was putting forward “half-measures.”

Industry charges that the rules would slow down drilling too much. The Independent Petroleum Association of America and ExxonMobil did not immediately respond to requests for comment, but the IPAA head Barry Russell told Reuters that the rules will “will undoubtedly insert an unnecessary layer of rigidity into the permitting and development process.”

Once the draft rule is published in the Federal Register, the BLM will take comments for 60 days before it finalizes the rule.

by Jeff Gerth

After 15 years of neglect, federal regulators are finally planning to tell phone companies selling services to schools and libraries how to comply with a rule requiring them to charge bargain prices.

Last week ProPublica revealed that the Federal Communications Commission had failed to provide guidance for the low pricing rule case since the 1997 launch of the school program, called E-Rate. Lawsuits and other legal actions in four states turned up evidence that AT&T and Verizon charged local school districts much higher rates than it gave to similar customers or more than what the program allowed.

The preferential pricing rule, called lowest corresponding price, was designed to give schools a leg up in the complicated world of voice and data pricing, and to make sure school children had access to the Internet. But despite evidence of inflated pricing, the FCC never brought an enforcement case against a service provider for violating the rule.

While the main victims of this failure are the nation's schoolchildren who receive suboptimal broadband access, there's another set of victims: the vast majority of people with a cellular or landline phone contract. That's because the program provides a subsidy to schools to help them pay for the telecom services. Telephone consumers pay for this subsidy, usually through a “Universal Service Fund” charge on individual phone bills. The subsidy fund is capped at about $2.25 billion a year.

Schools and libraries draw on this fund to help pay for the services provided by the telecom companies — virtually all schools are eligible, but the poorer the school, the more it can draw. Here's the rub: Requests for help almost always exceed the available funding. So when phone companies charge inflated rates to schools and government regulators turn a blind eye, this fund is depleted faster; fewer schools and libraries benefit; and money taken from millions of telephone customers goes to boost corporate profits instead of to help as many schoolchildren as possible.

Now, the FCC will finally teach phone companies about the preferential pricing rule. Over the next week companies that participate in the program will be attending annual training sessions in Atlanta and Los Angeles that are designed to explain the program's rules. This year's training sessions — unlike those in past years — will include lengthy discussions of the bargain pricing rule, according to a power point presentation posted on the website of the private company that administers the E-Rate program for the FCC, the Universal Service Administration Co.

The presentation tells companies that schools are "not obligated to ask" for the lowest corresponding price, "but must receive it!"

Asked to explain why the upcoming training sessions for providers were going to discuss the pricing rule for the first time, a spokesman for the FCC released a statement saying the new guidance was "prompted by an internal discussion last August of issues raised in the whistle-blower case."

That case was brought in 2008 by Todd Heath, who audited school telecom bills in Wisconsin. He alleged in federal court that Wisconsin Bell, a unit of AT&T, was charging several schools far more than others for essentially the same services, thus violating the pricing rule. The company says it follows the E-Rate rules and is contesting Heath's allegations in court. One of their defenses is the FCC's lack of guidance about the pricing rule.

ProPublica interviewed several FCC officials responsible for E-Rate last December, in a discussion mostly about the lowest corresponding price rule. None of them mentioned the prospect of new training about the rule, even after it was pointed out that the FCC had provided phone companies virtually no guidance on the price rule for the previous decade.

by Blair Hickman

The recent brouhaha over pink slime (and other lovely mass meat production processes) is only the beginning. Here’s our roundup of some standout reporting about the food on your plate.

This is a multifaceted, perennial topic. If you think we missed any, we’re happy to hear suggestions. Please email a link to MuckReads@propublica.org or tweet it with the hashtag #muckreads.

Safety of Beef Processing Method Is Questioned, The New York Times, December 2009
A look at the development of Beef Product Inc.’s “novel” method of meat production that later became known as the infamous "pink slime." Reporter Michael Moss won a Pulitzer Prize for his investigations into contaminated beef.

Our Dwindling Food Variety, National Geographic, July 2011
Our dwindling food variety, in a stride-stopping infographic.
Contributed by @kleinmatic

What the USDA Doesn't Want You to Know About Antibiotics and Factory Farms, Mother Jones, July 2011
The U.S. Department of Agriculture appears to have repeatedly removed a report by a USDA-contracted researcher that summarized recent academic work, from “reputed, scientific, peer-reviewed, and scholarly journals," on possible links between antibiotic-resistant infections and factory farm animals. Mother Jones got a permanent PDF of the researcher’s report, dubbing it the “document the USDA doesn’t want you to see.”
Contributed by @foodinteg

Asian Honey, Banned in Europe, Is Flooding U.S. Grocery Shelves, Food Safety News, August 2011

Some of the biggest U.S. honey packers knowingly bought honey of questionable quality so they could sell it on the cheap. Much of it was likely smuggled from China (honey the European Union has banned) and may have been laced with lead and illegal animal antibiotics — if it was really honey at all.

America's Dangerous Food-Safety System, The Daily Beast/ Newsweek, September 2011
A shortage of inspectors in the U.S. food-safety system exposes Americans to the risk of illness and death.
Contributed by @StepShep

Nation's Food Anti-terror Plans Costly, Unwieldy, Associated Press, September 2011
An AP investigation into the United States' $3.4 billion food counter-terrorism program found that progress had been slowed by a complex web of bureaucracy.
Contributed by @joannalin

On The Menu, But Not On Your Plate, Boston Globe, October 2011
A Globe-organized DNA test revealed scores of mislabeled fish in Massachusetts restaurants, grocery stores and seafood markets. Often, “local” fish was actually hauled from thousands of miles away, and while some chefs and store owners seemed to have no clue, others admitted to knowingly selling mislabeled food to boost profits. Experts said it reflects a nationwide trend that causes diners to unwittingly overpay, may make people sick and results in overfishing.

Contributed by @JoeYerardi

Dispute Over Drug in Feed Limiting U.S. Meat Exports, MSNBC, January 2012
The controversial drug ractopamine has sickened or killed more pigs than any other livestock drug on the market, leading the EU and China, which together produce and consume about 70 percent of the world’s pork, to refuse meat imports raised on the additive. The U.S. pork industry wants to change their minds.
Contributed by @NaomiStarkman

How Washington Went Soft on Child Obesity, Reuters, April 2012
The food and beverage industries have more than doubled their spending on lobbying in Washington in the last three years. And now Congress has declared pizza a vegetable.
Contributed by @mariancw

A History of FDA Inaction on Animal Antibiotics, ProPublica, April 2012
Everything you ever wanted to know about the Food and Drug Administration’s actions, or lack thereof, to keep antibiotics out of your food.

As Beef Cattle Become Behemoths, Who Are Animal Scientists Serving? The Chronicle of Higher Education, April 2012
A growing number of animal scientists employed by public universities are accepting payouts from pharmaceutical companies. They’re often hired to persuade farmers to use antibiotics that fatten up cattle but haven’t necessarily been proven safe. Some have been banned in the E.U. and China.
Contributed by @MelodyPetersen

Bonus points: In 1968, Nathan Kotz of the Des Moines Register and Minneapolis Tribune won a Pulitzer Prize for reporting on unsanitary conditions in meat packing plants, which, according to the Pulitzer site, helped ensure passage of the Federal Wholesome Meat Act of 1967. Anybody have an online copy?

by Michael Grabell

From intrusive pat-downs to body scans to perceived profiling, the Transportation Security Administration always seems to be the target of complaints.

Here's another one: It took the TSA almost four years to tell me what people complained about — in 2008.

In my first week at ProPublica in June 2008, I filed a public records request for the agency's complaint files. Such records can provide good fodder for investigations.

For example, amid the brouhaha over the agency's introduction of intensive full-body pat-downs in 2004, I requested complaints and discovered an untold story of the pain and humiliation suffered by rape victims and breast cancer survivors. In one incident that I found from that request — while I was a reporter at the Dallas Morning News — a woman complained that a screener asked her to remove her prosthetic breast to be swabbed for explosives.

When I made a similar FOIA request in 2008, I assumed the TSA would respond in a few months. Government agencies have about a month to respond to public record requests, though they often take longer. I figured even if their response took months, I'd be able to repeat it regularly to get a timely, inside look as to what passengers were complaining about and find out about incidents that required some more digging.

Boy, was I wrong.

After waiting and waiting and narrowing my request and some more waiting, the files finally arrived this week.

The information is now four years old — but it echoes much of what people are still complaining about.

For instance, an elderly woman in a wheelchair was asked to walk through security and fell at Orlando International Airport.

In another case, someone expressed concerns about a lethal plastic knife that can reportedly pass through metal detectors. (This was two years before the TSA widely deployed body scanners, which can detect plastic.)

In another complaint, a man flying to Cancun demanded an investigation after finding that the bottle of Jack Daniels he packed in his luggage was empty by the time he arrived.

Rather than let the files gather dust at the bottom of my desk drawer, I'm posting them for your perusal.

Why did the files take so long to release? Various FOIA officers over the years blamed the delay on the agency's backlog and on the volume of the records that had to be reviewed. It turned out to be 87 pages.

When I reached out again today to the TSA, spokeswoman Lorie Dankers provided a statement pointing out that the agency has received an average of more than 800 requests annually over the past four years. Then the TSA apologized.

"TSA should have responded to ProPublica's request sooner," the statement said. "TSA currently is working on 12 requests that are more than three years old. The agency is working diligently to finalize and respond to these requests."

I just filed my request for the 2012 complaints.

Hopefully, we won't have to wait until 2016 to see those.

by Minhee Cho

As part of a government program developed in the '90s, millions of consumers are charged a small fee on top of their cell phone bill every month to help subsidize the cost of telecom and Internet services for America's schools: the poorer the school, the bigger the subsidy. The landmark bill collects about $2.25 billion each year, but instead of maximizing the benefit for the country's disadvantaged children, some of the money has gone toward boosting corporate profits, ProPublica's Jeff Gerth reports.

Gerth joins the podcast this week to explain his new investigation on the government's E-Rate program, how AT&T in particular has failed to train its employees on the low-price requirement, and how the Federal Communications Commission, which oversees the program, has failed to enforce the mandate.

Listen to the full podcast and read Gerth's corresponding piece: AT&T, Feds Neglect Low-Price Mandate Designed to Help Schools. You can also subscribe to all of ProPublica's podcasts on iTunes.

by Lena Groeger

May 8: This post has been updated and corrected.

Each prescription drug you take has a unique code that the government can use to track problems. But artificial hips and pacemakers? They are implanted without such government identification, as are many other medical devices. In fact, the FDA doesn’t know how many devices are implanted into patients each year – it simply doesn't track that data.

Many manufacturers imprint a serial number on their devices. But those numbers are not standardized and aggregated in such a way that the government can easily track them. And the past decade has seen numerous high profile cases of malfunctioning medical devices, which have led to injury or even death. Critics say the FDA's minimal monitoring of devices contributes to these problems.

“If you’re lucky, you might find a sticker on the operating room note that was left over from the product,” said Richard Platt, who runs the Harvard Pilgrim Health Care Institute. Otherwise, there is little way of knowing what device was used.

Right now, the FDA depends mostly on voluntary reports from doctors, patients, manufacturers and hospitals to notify them of problems with devices already on the market. The agency does have some power to require manufacturers to conduct further studies or track a particular device once it is sold. But many devices don’t get that level of surveillance.

“It’s much like a patchwork of streams of information getting to the FDA,” said cardiologist Frederic Resnic of Brigham and Women’s Hospital, who has worked with the FDA on medical device safety monitoring. “The FDA is relying on anecdotal and very variable information about the safety of medical devices.”

If manufacturers get word from a doctor or hospital about a death or injury that occurred as a result of their product, they are legally obligated to investigate the event and report it to the FDA. But the process isn’t straightforward, as has become clear in the recent controversy over the malfunctioning St. Jude’s Riata defibrillator leads (wires that connect a defibrillator to the heart). The FDA said an individual doctor’s report helped alert them to the problem, but it was months before the device was recalled.

According to attorney William Vodra, a regulatory law expert and member of the Institute of Medicine panel that published a report on medical device safety last year, the number of doctors who actually contact manufacturers is small.

And after being notified of patient harm, manufacturers can minimize their own responsibility if they point the blame elsewhere, said health policy expert Diana Zuckerman, president of the National Research Center for Women & Families.

For example, if someone dies from complications in a surgery to remove an implant, the manufacturer may argue that it was the surgery – not the implant – that killed the patient.

“You have a system that is not rigorous, the standards are not always understood, and they are interpreted differently by different people,” Zuckerman said.

The FDA responds to the criticism by pointing out that while every medical device carries a potential risk, the vast majority of devices perform well and improve patient health. An FDA spokeswoman emphasized that the agency must evaluate thousands of medical devices each year, and is constantly looking for ways to better and more quickly identify problems.

While the FDA makes the adverse event reports publically available in a searchable database, it doesn't have a standardized system for reviewing reports once they are sent in, said Vodra, the attorney. A disclaimer on the site specifically states that the data is "not intended to be used either to evaluate rates of adverse events or to compare adverse event occurrence rates across devices."

“What you would normally consider the simplest kind of data analysis is not done,” said Zuckerman. Often, doctors catch a malfunctioning device before the FDA ever notices.

In one case, a group of Pennsylvania doctors noticed that several patients were showing severe complications a few years after getting an IVC filter – a device designed to capture blood clots. Bits of the filter were breaking off, causing chest pain and a dangerous build-up of fluid and pressure around the heart. In 2010 the doctors conducted their own study and found that the filter broke in a quarter of all patients who used it.

On the day that study was published, the FDA issued a warning saying it had received over 900 reports of problems with IVC filters since 2006, and that the device was meant to be removed after a few months, not left in permanently.

There have been numerous attempts at reform. Five years ago Congress ordered the FDA to set up a post-market surveillance system to track the safety of all medical projects, but a system hasn’t yet been set up for medical devices.

A year later the FDA announced the Sentinel Initiative, which would combine existing data from electronic health records and medical claims to track drugs, vaccines, and devices. Some groups of hospitals or other organizations have voluntarily set up registries to collect information about the make and model of devices.

While the FDA has made significant progress on tracking drugs, it’s not yet in a position to do the same thing for devices, according to Harvard’s Platt, who is the principal investigator of Mini-Sentinel, the FDA's pilot program for the national system. The data isn't there.

The FDA has long acknowledged the need for a unique device identifier system, and got permission from Congress to set one up five years ago. No such system of ID-tags exists yet, but after several recent high profile medical device failures, the issue getting some attention from Congress. A proposed Senate bill, which cleared the Health, Education, Labor and Pensions Committee last week, sets a timeframe for implementing a unique identification system, among other reforms.

“If UDI’s were used in a consistent way, we could use the same kinds of techniques we've developed for drugs for devices,” said Platt. “It would be a huge breakthrough.”

Correction: This post mistakenly stated that medical devices are implanted without identification. In fact, many manufacturers imprint serial numbers on their devices, but the government has not instituted a unique-identifier system that would allow it to easily track medical devices and any problems that occur with them. This post has been changed to clarify this distinction.

by Justin Elliott

Last month we told the unlikely story of how Eni Faleomavaega, the congressional delegate from American Samoa, had become one of Bahrain's most reliable friends on Capitol Hill. Faleomavaega had traveled to the Gulf Nation and made a series of statements in support of the government and criticizing popular protests that broke out there early last year. As we documented, he was turned on to the issue by the Bahrain American Council, a group created by a Washington lobby shop run by a close friend and campaign contributor of Faleomavaega's.

But something unexpected happened after the publication of our story: Faleomavaega's view of the situation in Bahrain shifted dramatically.

Since the protest movement began in February 2011, Faleomavaega had repeatedly criticized protesters as pawns or agents of Iran who were violently destabilizing an important U.S. ally. In comments submitted to the Congressional Record last March, for example, Faleomavaega argued that the monarchy that rules Bahrain had met all of the protesters' demands, and added, "I have to ask why the demonstrators returned to protesting again, even after all their demands were agreed to."

Human rights groups, meanwhile, have consistently criticized the government for suppressing protests with sometimes deadly force and for prosecuting activists and those that aided them.

Our story was published April 2, which happened to coincide with the start of a trip Faleomavaega and two other Democratic members of Congress took to Bahrain (paid for by the government there). On April 3, the group met with Bahrain's human rights minister. During that meeting, Faleomavaega called on the government to implement reforms that were recommended by a commission of inquiry last year. He also raised the case of Jaffar Salman, a man detained for allegedly participating in an illegal assembly who had complained he was not getting medical treatment after being shot in the face with birdshot.

Salman was subsequently brought to the hospital, according to a letter Faleomavaega received thanking him from opposition party Al-Wefaq published on his congressional website last week.

In a statement accompanying the letter, Faleomavaega called for reconciliation, adding that “after the government crackdown on government protestors, the situation in Bahrain is alarming.”

This kind of rhetoric is an about face for the congressional delegate. On his last trip to Bahrain in October, Faleomavaega delivered a speech vigorously defending the government's response to the protests. He worried about “the prospect of anarchy or the violent overthrow of a peaceful government by infiltrators from another country” — Iran.

Faleomavaega also met with Al-Wefaq officials on that October trip but they had expressed disappointment after the meeting, complaining that he did “not show enough understanding for the legitimate demands for reform.”

What caused Faleomavaega to change his view of the situation? He did not respond to requests for comment.

by Abrahm Lustgarten

A new study has raised fresh concerns about the safety of gas drilling in the Marcellus Shale, concluding that fracking chemicals injected into the ground could migrate toward drinking water supplies far more quickly than experts have previously predicted.

More than 5,000 wells were drilled in the Marcellus between mid-2009 and mid-2010, according to the study, which was published in the journal Ground Water two weeks ago. Operators inject up to 4 million gallons of fluid, under more than 10,000 pounds of pressure, to drill and frack each well.

Scientists have theorized that impermeable layers of rock would keep the fluid, which contains benzene and other dangerous chemicals, safely locked nearly a mile below water supplies. This view of the earth's underground geology is a cornerstone of the industry's argument that fracking poses minimal threats to the environment.

But the study, using computer modeling, concluded that natural faults and fractures in the Marcellus, exacerbated by the effects of fracking itself, could allow chemicals to reach the surface in as little as "just a few years."

"Simply put, [the rock layers] are not impermeable," said the study's author, Tom Myers, an independent hydrogeologist whose clients include the federal government and environmental groups.

"The Marcellus shale is being fracked into a very high permeability," he said. "Fluids could move from most any injection process."

The research for the study was paid for by Catskill Mountainkeeper and the Park Foundation, two upstate New York organizations that have opposed gas drilling and fracking in the Marcellus.

Much of the debate about the environmental risks of gas drilling has centered on the risk that spills could pollute surface water or that structural failures would cause wells to leak.

Though some scientists believed it was possible for fracking to contaminate underground water supplies, those risks have been considered secondary. The study in Ground Water is the first peer-reviewed research evaluating this possibility.

The study did not use sampling or case histories to assess contamination risks. Rather, it used software and computer modeling to predict how fracking fluids would move over time. The simulations sought to account for the natural fractures and faults in the underground rock formations and the effects of fracking.

The models predict that fracking will dramatically speed up the movement of chemicals injected into the ground. Fluids traveled distances within 100 years that would take tens of thousands of years under natural conditions. And when the models factored in the Marcellus' natural faults and fractures, fluids could move 10 times as fast as that.

Where man-made fractures intersect with natural faults, or break out of the Marcellus layer into the stone layer above it, the study found, "contaminants could reach the surface areas in tens of years, or less."

The study also concluded that the force that fracking exerts does not immediately let up when the process ends. It can take nearly a year to ease.

As a result, chemicals left underground are still being pushed away from the drill site long after drilling is finished. It can take five or six years before the natural balance of pressure in the underground system is fully restored, the study found.

Myers' research focused exclusively on the Marcellus, but he said his findings may have broader relevance. Many regions where oil and gas is being drilled have more permeable underground environments than the one he analyzed, he said.

"One would have to say that the possible travel times for a similar thing in Arkansas or Northeast Texas is probably faster than what I've come up with," Myers said.

Ground Water is the journal of the National Ground Water Association, a non-profit group that represents scientists, engineers and businesses in the groundwater industry.

Several scientists called Myers' approach unsophisticated and said that the assumptions he used for his models didn't reflect what they knew about the geology of the Marcellus Shale. If fluids could flow as quickly as Myers asserts, said Terry Engelder, a professor of geosciences at Penn State University who has been a proponent of shale development, fracking wouldn't be necessary to open up the gas deposits.

"This would be a huge fracture porosity," Engelder said. "So I read this and I say, 'Golly, does this guy really understand anything about what these shales look like?' The concern then arises from using a model rather than observations."

Myers likened the shale to a cracked window, saying that samples showing it didn't contain fractures were small in size and were akin to only examining an intact section of glass, while a broader, scaled out view would capture the faults and fractures that could leak.

Both scientists agreed that direct evidence of fluid migration is needed, but little sampling has been done to analyze where fracking fluids go after being injected underground.

Myers says monitoring systems could be installed around gas well sites to measure for changes in water quality, a measure required for some gold mines, for example. Until that happens, Myers said, theoretical modeling has to substitute for hard data.

"We were trying to use the basic concepts of groundwater and hydrology and geology and say can this happen?" he said. "And that had basically never been done."

by Jeff Gerth

At the dawn of the Internet era, Congress set out to avert a digital divide between rich and poor students. In a landmark bill, lawmakers required the nation’s phone companies to provide bargain voice and data rates to schools and to subsidize the cost of equipment and services, with the biggest subsidies going to the schools with the most disadvantaged children.

More than a decade later, as schools struggle for funding amid widespread budget cuts, there is growing evidence that the program’s crucial low-price requirement has been widely neglected by federal regulators and at least one telecom giant.

A decade after the program started, AT&T was still not training its employees about the mandatory low rates, which are supposed to be set at the lowest price offered to comparable customers. Lawsuits and other legal actions in Indiana, Wisconsin, Michigan and New York have turned up evidence that AT&T and Verizon charged local school districts much higher rates than it gave to similar customers or more than what the program allowed.

AT&T has charged some schools up to 325 percent more than it charged others in the same region for essentially the same services. Verizon charged a New York school district more than twice as much as it charged government and other school customers in that state.

The companies say they comply with the rules of the program, known as E-Rate.

Meanwhile, the federal government has made scant effort to enforce the requirement that companies give the preferential rate to schools. The Federal Communications Commission, which oversees the program, has yet to bring an enforcement action against any carrier for violating the low-price rule, according to interviews and documents, some obtained under the Freedom of Information Act. And the FCC, acting through the private company that administers the program, has provided little if any guidance to companies on how to apply the best-price rule. Indeed, in 2010, companies such as AT&T and Verizon sought clarification on the rule.

“Time and again, we find that schools are rarely advised by the telephone companies of their best available rates,” said Howard Rotto, whose New York consulting firm has represented dozens of schools in the Northeast for four decades. “When representatives of the carrier do not even know of the existence of their best pricing,” Rotto asked, “how can such a rate ever be offered or known?”

At the most basic level, the victims of this failure are the nation’s schoolchildren who receive suboptimal broadband access. Many requests for assistance cannot be funded under the current program. If lower prices were charged, more schools could benefit.

But there’s another set of victims: the vast majority of people with a cellular or landline phone contract.

As designed by Congress, telecom companies must contribute to a fund, administered by the federal government, that subsidizes the equipment and services provided under the program. Most of the companies raise this money by directly charging their customers.

Sift through that pile of papers at home and take a look at your monthly bill. Amidst all those charges you’ve never really understood you’ll probably find a small one labeled “Universal Service Fund.” Skimmed off every consumer’s payment each month, those dollars and nickels add up, creating a pot of money of about $2.25 billion to subsidize telecom and Internet services for America’s schoolchildren and library users.

Schools and libraries draw on this fund to help pay for the services provided by the telecom companies — virtually all schools are eligible, but the poorer the school, the more it can draw. Requests for help almost always exceed the available funding. So when phone companies charge inflated rates to schools and government regulators turn a blind eye, this fund is depleted faster; fewer schools and libraries benefit; and money taken from millions of telephone customers goes to boost corporate profits instead of to help as many schoolchildren as possible.

Indeed, a perverse bureaucratic process denies most schools the funding to carry broadband services all the way into actual classrooms. Here’s how it works: Schools are rarely if ever turned down for funding to bring broadband main lines to the exterior walls of the schoolhouse.

But the internal connections, from wiring to jacks, that complete the last leg and extend connectivity down to actual classrooms, computers and telephones are deemed a lower priority, so-called “Priority 2.” (Priority 2 also includes maintenance.) As a result, only the very poorest schools are eligible for this funding. The rest — including many poor-but-not-destitute schools — don’t get the subsidies to carry broadband that last crucial stretch from outside the schoolhouse to inside classrooms.

Last year, the E-Rate program received Priority 2 requests totaling more than twice as much money as it could fund. Worse, many schools don’t even bother to apply for “Priority 2” services because they know they’ll be turned down. Wisconsin estimated in 2005 that 98 percent of its schools and libraries do not qualify. In 2010 New York wrote to the FCC, “Many otherwise needy schools and libraries have received no Internal Connections funding — ever!” And the FCC itself declared in 2010 that “the vast majority” of schools and libraries “do not receive funds for the internal infrastructure necessary to utilize increased broadband capacity.”

From 2009 to 2011, Priority 1 services accounted for about two-thirds of the funds committed. This year, the estimated demand for Priority 1 services will essentially exhaust the entire fund.

How could Congress’s plan have gone so far awry?

An examination of the program by ProPublica shows that from the beginning, oversight of how the money was spent was turned over to private companies that employ numerous former telecom executives.

The leading company hired to oversee the program provided little if any training or guidance to phone companies over the past decade in how to calculate the bargain prices, known as “lowest corresponding price.” Instead, according to documents and interviews, it focused on the schools, examining whether their purchases of equipment were cost effective.The company and the FCC even forced schools and libraries — many of them unskilled in negotiating complex telecom contracts — to pay millions of dollars in penalties for failing to follow the program’s voluminous and cumbersome rules.

Yet 16 years after the law passed the FCC has not brought even one case against a phone company for violating the “lowest corresponding price” requirement. Efforts to enforce the rule have come exclusively through private legal action, such as lawsuits, and one Justice Department-led investigation that examined pricing in Indiana.

Much about the E-Rate program remains hidden from public view. Telecom contracts are mostly private, so it is not possible to judge how frequent or widespread violations of the lowest-corresponding-price rule might be. For this report, ProPublica relied on documents, many obtained from lawsuits, as well as dozens of interviews.

Mike Balmoris, a spokesman for AT&T, declined to answer specific questions about the company’s practices but released a statement saying “AT&T complies fully with the E-Rate requirements, including the lowest corresponding price rule.”

In an email, Verizon spokesman Ed McFadden said the company regularly trains its employees on all legal obligations, “including requirements of the E-Rate program,” as part of a larger effort “to conduct business with all our customers at the highest ethical standards.” The FCC also declined to answer questions.

A statement provided by an FCC spokesman, Mark Wigfield, cited the program’s overall success; the commission’s efforts to improve “safeguards against waste, fraud and abuse;” rules requiring schools to engage in competitive bidding to ensure low prices; and audits by the private company regulating the program that compare prices that companies charge schools to “those charged other customers.”

The FCC declined to make those audits available. But through a FOIA request, ProPublica requested every audit for the first 12 years of the E-Rate program involving the lowest-corresponding-price rule. The government provided what it said was a complete set — a mere nine audits.

In broad terms, they show that regulators paid little attention to telecom service providers while coming down hard on schools. Indeed, most of the audits deal with the companies as a side issue; the main focus is on whether the schools, not the companies, complied with the program’s complex regulations. Some of the audits are heavily redacted, but in the available text none mentions lowest corresponding price, the key cost-saving requirement.

The E-Rate Program

E-Rate was created through the Telecommunications Act of 1996, which President Bill Clinton made law through the first e-signing of a federal bill. The act mandated broader telecommunications access through four programs, including E-Rate for the nation’s schools and libraries.

When a school or library qualifies for E-Rate, the fund subsidizes 20 percent to 90 percent of the telecom bill, depending on how poor the school or library is. (A key measure of poverty: the percentage of students who qualify for the government’s free or reduced-cost school lunch program.)

The FCC says the program has been a success. At the time of E-Rate’s launch, 65 percent of public schools were connected to the Internet. By 2005, about 97 percent were, thanks largely to E-Rate, according to the FCC.

A few days after signing the act, Clinton highlighted “a requirement for companies to provide a discount for connecting all of our classrooms and libraries to the information superhighway.”

One reason for the bargain-rate requirement is to make sure that as many schoolchildren and library patrons as possible benefit. Another reason to require companies to provide preferential rates, according to the FCC, is that many schools and libraries suffer from a “lack of experience” when it comes to “negotiating in a competitive telecommunications market.” Indeed, telecom pricing is notoriously complex and opaque, and the E-Rate program benefits “many of nation’s poorest and most isolated communities,” according to an FCC document.

Under FCC regulations, schools are required to try to obtain competitive bids from phone companies, while the companies are required to charge no more than their “lowest corresponding price,” which the agency defined as “the lowest price [a telecom company] charges to similarly situated non-residential customers for similar services.”

Weak Enforcement

Almost from the inception of the program, phone companies have advocated for leeway in determining the lowest corresponding price. In 1997, representatives from five former Bell companies — three of which are now part of AT&T — wrote to the FCC that companies should be allowed “to determine the lowest corresponding price … based on a consideration of factors normally used in determining prices within a competitive market.”

Meanwhile, the FCC has repeatedly declined to back the pricing rule with tough enforcement. In 1997, the FCC proposed that companies could get reimbursed through the program only if they first certified that they had complied specifically with the pricing rule — a strong legal requirement that might have left companies liable to the federal False Claims Act if they misrepresented their prices. The FCC cited the “universe of records” a company “must review to determine lowest corresponding price.” But the agency never enacted that certification proposal.

In 2005, the FCC again proposed that service providers, as part of their annual E-Rate filings, certify specifically they had charged the “lowest” price to schools and libraries. But after industry opposition, the plan was dropped, according to public filings. Wigfield, the FCC spokesman, declined to say why the agency did not require certification. (The FCC does require a broad, annual certification, in which companies are instructed to affirm their compliance with E-Rate rules.)

The FCC, through the nonprofit firm Universal Service Administrative Co., or USAC, has taken action against phone companies for a variety of infractions — but never has it demanded a refund or penalty for violating the lowest-corresponding-price rule.

As for AT&T, as recently as 2007 it issued its employees a 61-page “E-Rate Compliance Training” manual, used as part of an annual required course for employees. The pricing rule is not mentioned.

In its statement to ProPublica, the company spokesman said, “AT&T has implemented training and procedures to ensure compliance with all E-Rate requirements.”

Unequal Pricing

Working out of his modest home in Waupun, Wis., Todd Heath runs a niche business: He takes a cut from any refunds he manages to obtain for telecom customers, mainly schools. In 2008, Heath wondered why schools he represented, in small cities like Kaukauna, West Bend and Fond du Lac, were paying far more than others for essentially the same services from the same company: Wisconsin Bell, a unit of AT&T.

The schools were all in the E-Rate program, and it wasn’t long before Heath accused the company of violating the lowest-corresponding-price rule. His complaints are now in federal court.

Under whistleblower laws, if the suit results in a financial settlement, Heath stands to gain a portion of that money.

Heath’s complaint alleges that in 2005, school districts in Burlington, Grafton, Cudahy and Altoona paid as much as 80 percent more for the “identical” central office exchange service from Wisconsin Bell than did the Fond du Lac School District.

Also that year, according to the court complaint, Milwaukee, West Bend and Sheboygan were paying far higher rates for office exchange services than what was available under an agreement between Wisconsin Bell and the state of Wisconsin that allowed schools and libraries to get the same favored rate the state was getting. For example, the Wisconsin state contract price for a service called ISDN/PRI, which integrates voice and data into a single line, was $390 per month, according to the complaint. But schools in Fond du Lac, Hartford, Kaukana, Kimberly and West Bend were billed at prices ranging from $640 to $1,268 per month, the complaint states.

Heath’s complaint asserts that “Wisconsin Bell routinely has withheld information about these available rates from public school and library customers, and it has billed almost all of them at much higher rates, sometimes three times as high as LCP,” or lowest corresponding price.

The allegation that Wisconsin Bell hid the state rates from schools is wrong, the company says, because the contract rates were “publicly known.”

E-Rate regulations, however, require that the lowest corresponding price be more than just publicly known; that price must be provided to schools and libraries in the program. Phone companies “shall not charge” schools or libraries “a price above the lowest corresponding price,” the regulations state. (There is an exception for a rate so low that the company loses money, but the FCC must sign off on this exception. An agency spokesman, asked about any such cases, did not provide an example.)

Wisconsin Bell is seeking dismissal of the lawsuit on various grounds. One is that the FCC has, in essence, neglected its duty to train phone companies on how to determine the preferential rate. The agency, according to a Wisconsin Bell court filing, has “yet to provide authoritative benchmarks with respect to application of the lowest corresponding price requirement.”

The AT&T spokesman declined to discuss the Heath case but said the company “has worked diligently with industry to seek additional FCC clarifications of these rules where appropriate.”

Heath’s suit continues.

Regulatory filings with the New York State Public Service Commission paint a similar picture, but with Verizon. From 2005 to 2011, in the E-Rate program, Verizon charged far more to the Bronxville, N.Y., school district for ISDN/PRI and plain old telephone services than what was available under the state-negotiated rate. For example, according to the filings, the state rate for PRI since 2008 has been $275 per month, but Bronxville has been charged more than twice that: $611 per month.

Verizon originally contested the claim using a strategy similar to one AT&T deployed in Wisconsin: putting the onus on the school. In a filing last summer, Verizon said that the state master contract “process requires customers to submit a request to receive the discount,” and there is no evidence that the Bronxville school district “requested” the state rate for telephone service.

E-Rate regulations, however, prohibit phone companies from charging more than the lowest corresponding price.

Verizon and Bronxville recently settled the case, according to Rotto, the consultant, who worked with Bronxville on the matter. The terms of the settlement are confidential.

While declining to discuss specific disputes, Verizon spokesman McFadden said the company “is committed to resolving any such disputes fairly.”

“If we make a mistake,” he added, “it is our goal to fix it.”

Justice Department Steps In

USAC, the nonprofit company that administers the program on behalf of the FCC, audited the E-Rate bidding process in Indiana and gave it a clean bill of health. But a law firm’s examination of the same bidding process, done for the state, found problems and led to multimillion-dollar settlements with the Justice Department, according to department records.

One of those settlements took place in 2009, as the Justice Department was considering filing civil claims against an AT&T subsidiary about its Indiana E-Rate service, including for “overbilling the E-Rate program for services provided.” The telecom giant paid $8.3 million to settle. It did not admit wrongdoing.

The lowest-corresponding-price rule is not referenced in the settlement but figures prominently in a related compliance agreement with the FCC, executed the same day. There, AT&T agreed it “shall prepare a written analysis sufficient to document its compliance with the requirement that the rates it charges for E-Rate services in Indiana are not above the lowest corresponding price.”

This compliance agreement is the only example cited in the FCC’s statement to ProPublica, but records show it was the Justice Department —not the FCC — that led the investigation of the case. The FCC played a role in the latter stages.

AT&T declined to comment on the 2009 settlement.

The following year, AT&T urged the FCC to drop the pricing rule altogether. “The current competitive circumstances,” the company wrote the agency in 2010, “warrant elimination of the lowest corresponding price rule.”

“A Regulatory Wild West”

Numerous reports by Congress, the GAO and the FCC’s inspector general have criticized the E-Rate program over such issues as waste, fraud, poor management and the program’s hybrid oversight structure involving two private companies with links to the telecom industry.

The FCC is the final authority for E-Rate policies and oversight, but USAC administers the program, conducts audits, approves or rejects applications and pays invoices. USAC, in downtown Washington, employs “numerous” former telecom executives, according to Eric Iversen, USAC’s spokesman.

The back-office work for USAC is actually performed by another company, Solix, based in New Jersey. Solix is owned by fewer than 200 investors, some of which are small telecom companies, and Solix employees also include ex-telecom industry executives, according to public records and John Parry, the chief executive officer of Solix.

Both USAC and Solix say they hold their employees to stringent codes of conduct to eliminate potential conflicts of interest, and they have added protections in response to criticism.

Still, in an interview a former FCC official who spoke on condition of anonymity called the arrangement “a regulatory Wild West.”

USAC provides training to phone companies on how to comply with E-Rate rules, and its training materials from 2001 through 2011 are available on its website. Not once is lowest corresponding price mentioned in those materials. Indeed, in 2010, the telecom industry publicly complained to the FCC that USAC has not “provided any guidance” on the rule.

But while largely ignoring the rule requiring companies to provide the bargain rate, USAC requires schools, no matter how impoverished or small, to find a “cost-effective” price through competitive bidding and other means.

In 2004, USAC hired an outside accounting firm to audit 100 schools and libraries — not phone companies — in the E-Rate program. One section of the lengthy audit protocol calls for checking with phone companies to see if they were complying with the mandate to charge the lowest corresponding price, according to documents provided by the FCC. The auditors found no violations.

After that, USAC said in a statement to ProPublica, it “updated our audit program to perform separate audits of beneficiaries and service providers,” which allowed for more “focus” on the telecom industry. Still, the more recent audits found no violations of the lowest-corresponding-price rule, according to the USAC statement.

Punishing Schools

What USAC and the FCC have done is penalize schools that uncover overcharging.

The New York City Department of Education (NYCDOE) hired auditors to review mountains of tedious phone bills. The auditors, who work on a contingency basis and are commonly used by businesses and government, won refunds for several millions of dollars in overcharges dating back almost a decade.

But when city officials went to return part of those refunds to the E-Rate program, they were effectively punished for doing so.

FCC spokesman Wigfield said he could not comment because the matter is pending. Others familiar with the New York City matter say there have been discussions between the parties, but no resolution.

The education department’s quandary was explained in an Oct. 17, 2003, letter to the FCC. Three outside billing firms, the letter explained, had documented about $2 million in “overcharges” by Verizon and its predecessors. Verizon provided a refund.

The city then figured out how much of the refund to share with the federal fund. E-Rate subsidized the New York City schools at a rate of 78 percent. So first, New York deducted the audit fees, about 25 percent, then multiplied the remainder by 78 percent. That’s the amount it wanted to return to the E-Rate program.

But in August 2003, USAC informed the New York education department that it owed the fund’s share (78 percent) of the audit fee as well, according to New York’s filing with the FCC. In effect, USAC was refusing to pay its share of an audit that saved money for both New York and the E-Rate program.

This “exceedingly poor public policy,” the city told the FCC, “would penalize NYCDOE for its initiative,” and “discourage” similar audits.

At that time, USAC was auditing only schools in the E-Rate program, not phone companies.

The FCC says audits are not considered educational services under E-Rate rules and thus are not eligible for reimbursement.

Verizon, in a statement emailed by spokesman McFadden, declined to comment on any particular dispute, but McFadden said “occasional disagreements are unavoidable” and that the company’s “goal” is to issue refunds “promptly and in the correct amount.”

The last outside audit of New York City’s telephone bills was in 2009. Both Verizon and New York City would not discuss the results, which are still being resolved. Two people familiar with the results of the latest NYCDOE audit, who declined to be identified because of the ongoing negotiations, said the amount of overcharges detected exceeded $10 million.

New York is not alone. The Yonkers school district and the Detroit Public Schools, records show, have encountered the same disincentive.

Detroit hired a private firm to audit the school district’s telecom services, provided by AT&T. That 2010 audit recommended a recovery of almost $3 million for a variety of erroneous charges. Among its findings: “under the E-Rate program AT&T failed to offer [the Detroit Public Schools] the most favored rate,” according to a summary of the audit.

But Detroit is still reviewing the audit, according to spokesman Steven Wasko, who noted in an email the FCC’s disincentives for audits. “Savings identified can actually amount to additional costs for the district,” he wrote.

Detroit has chosen to “strengthen its own reviews” rather than rely on outside auditors, Wasco added.

AT&T declined to comment on the Detroit audit.

Schools have other complaints about the E-Rate program. Many say their requests to enroll get mired in a regulatory “black hole,” while others protest applications exceeding 300 pages. And there are hundreds of cases of rule infractions, some technical, that force schools to return money to the program, according to FCC documents.

The FCC spokesman says the agency has “streamlined” the application process.

by Tracy Weber and Charles Ornstein

After a patient died last year at a Veterans Affairs hospital in Manhattan, federal inspectors discovered nurses in his unit had a startling gap in their skills: They didn't understand how the monitors tracking vital signs worked.

None of the nurses interviewed could accurately explain what would happen if a patient became disconnected from a cardiac monitor — which allegedly occurred to the patient who died, according to an October 2011 report from the U.S. Department of Veterans Affairs' inspector general.

The incident followed two deaths in the cardiac monitoring unit at a VA hospital in Denver that raised similar questions about nurse competency.

Earlier this month, a broader review by the VA inspector general of 29 VA facilities found only half had adequately documented that their nurses had the needed skills. Some nurses "did not demonstrate competency in one or more required skills," but there was no evidence of retraining, the report said.

An outside nursing expert who reviewed the reports at ProPublica's request called them "troubling" and said the fact that the lapses weren't caught and corrected "signified much broader problems."

The inspector general's findings reveal "a lack of oversight and adherence to accepted clinical and regulatory standards," said Jane Hirsch, a clinical professor emeritus at the University of California, San Francisco School of Nursing, who previously oversaw nursing at U.C. San Francisco Medical Center.

The April 20 IG report also noted that previous inspections had found nurse competency issues in "dialysis, mental health, long-term care, spinal cord injury, endoscopy procedure areas, the operating room and the cardiac catheterization laboratory and with reusable medical equipment."

In a response to the inspector general, the VA pledged to create uniform competency standards for its 152 hospitals and to ensure that evaluations of every nurse's skills are up-to-date. Nurses will not be able to work in areas in which they have not demonstrated competency.

A VA spokeswoman declined further comment.

Nurse competency has increasingly become an issue in medicine. Hospitals and clinics create their own procedures and tests for assessing the skills of nurses, but their adherence to these policies is spotty.

Outside regulators don't test individual nurses, but simply check if a sampling of the nurses' files have the appropriate paperwork certifying competency.

That's what VA's inspector general did for the April review. As such, officials acknowledged that they could not verify whether nurses at those hospitals, or others, are providing competent care.

"We did not look at actual care or actual competence," Julie Watrous, director of the inspector general's combined assessment program, which inspects each VA hospital every three years, told ProPublica.

Only half the 29 facilities included in the new report had complete nurse skill assessment records that met the hospitals' standards, inspectors found. Of the 349 nurses whose files were examined, paperwork showed that 58 lacked skills in at least one area. And for 24 in that group, there was no evidence that anything was done in response.

In an interview, however, the IG official who coordinated the report said she was generally pleased with the findings. Although both the VA and its hospitals had room to improve, she said, all of the hospitals had policies in place and at least some proof of skills in each nurse's file.

"We never found one single site or even person that didn't have at least components of competency assessment and validation," said Carol Torczon, associate director of the St. Petersburg, Fla., office of the inspector general. "Where we found the holes was in the paper process."

Torczon said she believed that the problems identified in Denver and New York were not reflective on the care generally provided by VA nurses in cardiac monitoring units.

Inspectors in the New York and Colorado cases said they could not definitely tie the deaths of the patients to their nurses' care. But they noted that their lack of training put patients at risk.

Registered nurses assigned to telemetry units typically place cardiac leads, set parameters for the monitors tracking each patient, verify heart rhythms and take appropriate actions if there is an irregularity. They also enter progress notes and inform doctors of any changes.

After the patient in New York died, inspectors quizzed nurses and a biomedical engineer about what would happen if a patient got disconnected. "According to some staff, a 'red alarm' would be triggered since a disconnected lead was considered critical," the report said, "whereas other staff told us that a disconnected lead would trigger a yellow alarm or that it would not trigger any alarm at all."

Inspectors also found no evidence that the nurses' competence had been checked. Records showed that one of the patient's nurses had last received training on the monitors 13 years earlier.

Two years earlier at a VA hospital in Denver, inspectors looked into the deaths of two patients on cardiac monitors. After the first death, the hospital gave nurses a basic test of their ability to interpret monitor readings: only one of 28 passed, according to a January 2010 report. The nurse in charge when both patients died had never received specialized training in cardiac monitors.

Even after the second patient died in 2009, inspectors found "it was unclear who was responsible for telemetry training, and staff were not aware that policies had been updated."

Both facilities vowed extensive reforms in responses that were included in the IG reports.

Experts say up-to-date competency evaluations are important because they ensure that nurses, who provide the bulk of the frontline care in hospitals, have the skills for their position.

"It would appear that the old adage 'inspect what you expect' has most certainly not been taken very seriously in these environments," said Hirsch, who was chief nursing officer at UCSF Medical Center for nine years.

After reading the New York and Denver reports, Hirsch said her concern wasn't the incidents themselves as much as that the competency of the nurses hadn't been documented or evaluated in a long time.

Had she been in charge, the findings would have caused her "to be really nervous and want to jump on it immediately," she said.

by Lena Groeger