Edward Piou's personal websiteProPublica
Pfizer CEO Gets Pay Raise for Influencing Public Policy
Lawmakers often contend that lobbying, campaign contributions and fancy parties do not sway their votes, yet at least one company begs to differ. As The Washington Examiner reports, Pfizer based its recent decision to grant CEO Jeff Kindler a raise, at least in part, on his "developing and advancing U.S. and global public policies that serve the overall interests of our Company and our shareholders."
The language, buried in the company's most recent proxy statement filed with the Securities and Exchange Commission, explicitly cites Kindler's efforts in "opposing legislation that would allow for importation of prescription drugs."
Pfizer contends that importing these medicines "could jeopardize the integrity of the drug supply chain in the U.S," while groups like AARP say it's a safe and cost-effective solution to lowering drug prices.
An effort to allow importation of cheaper drugs from Canada and Europe failed last December. Sen. Byron Dorgan, who spearheaded the effort, told reporters after the vote that "the drug industry has a lot of clout in this town, and they demonstrated that tonight."
As the Sunlight Foundation noted in an extensive report highlighted by ProPublica, the pharmaceutical industry lobbying group PhRMA agreed to support the White House's health care reform effort as part of a deal that included a pledge by the administration to oppose drug importation.
Kansas and Vermont Are the Latest Unemployment Insurance Debtors
Kansas and Vermont have become the two latest casualties of record unemployment insurance claims. Both states have exhausted their unemployment insurance trust funds and have turned to borrowing from the federal government to keep unemployment benefits flowing.
The 50 states, the District of Columbia, Puerto Rico and the Virgin Islands operate separate unemployment insurance systems, and have widely varying tax rates and benefits. While a few entered the recession with ample reserves, most had far less than the 18 months’ worth recommended by the federal government.
To see how your state’s fund is faring, click here for our unemployment insurance tracker, which has the most recent data available about funds in all the states plus D.C.
Besides Kansas and Vermont, 27 other states and the Virgin Islands have together borrowed more than $30 billion. The federal loans are interest-free until 2011, but after interest kicks in, it must be paid from the states’ general funds, taking money away from roads, schools and other priorities.
While Kansas has borrowed only about $7 million so far, officials estimate the state will borrow as much as $750 million this year. That’s a significant sum relative to the state’s $25 billion budget. (It’s also small potatoes compared with other states, which have borrowed billions. We’re looking at you Michigan and California.) Even a scheduled increase in the tax on employers, from an average of $162 to $350 per worker, will likely not make much of a dent in the Kansas’ borrowing.
Vermont, which has borrowed about $4 million so far, has already increased the average tax per worker from $239 to $329 by increasing the amount of workers’ wages that are taxed from $8,000 to $10,000, and lawmakers also canceled a scheduled benefit increase.
But that will not be enough to shore up the state’s trust fund, and lawmakers are considering legislation that would take the unusual step of imposing a .02 percent payroll tax directly on employees. (Most states fund their unemployment benefits solely through employer taxes; only Alaska, Pennsylvania and New Jersey also ask for worker contributions.) They would also increase the tax rate on employers by an as-yet-undecided amount. That tax rate has not been increased since 1983.
To see how your state’s fund is faring, click here for our unemployment insurance tracker, which has the most recent data available about funds in all the states plus D.C.
Stimulus Spending Now at $314 Billion
The Obama administration has paid out $314 billion of the nearly $800 billion American Recovery and Reinvestment Act, according to our weekly breakdown. That figure, which includes $195 billion in spending and an estimated $119 billion in tax cuts, is just shy of 40 percent of the total stimulus package.
You can see more information on stimulus spending, including a breakdown of spending by agency, at our interactive Stimulus Progress Bar. You can also see how fast each agency is spending its money by checking out our Stimulus Speed Chart.
Your Bailout Update: $315 Billion in the Red
After shrinking for several months, taxpayer exposure to the bailout jumped in February, due to Fannie Mae’s receiving another $15.3 billion.
The toll stands at $315.3 billion. That number accounts for not only the bailout money still outstanding, but also the revenue that the government has collected from recipients. Included in that revenue is $1.5 billion the Treasury Department received last week for its auction of Bank of America’s common stock warrants. Altogether, the government made a profit of about $4.6 billion through its investment in Bank of America.
Check out our frequently updated Bailout Scorecard for the complete rundown. Our comprehensive list of bailout recipients accounts both for the TARP and the separate bailout of Fannie Mae and Freddie Mac. All told, the government has lent, invested or spent about $515 billion in the bailout so far.
The Treasury has pumped a total of $75.2 billion into Fannie since the government takeover in September 2008. Together with money invested in Freddie, the total comes to $125.9 billion. Freddie has continued to take losses, but hasn’t required more government money since last May.
According to its proposed budget for 2011 (PDF) the administration expects to invest a total of $188 billion in the two companies – meaning that about $62.1 billion in bailouts are still to come. Some experts have criticized that estimate as being too low.
Meanwhile, the administration has punted on the problem of what to do with the two companies. Last year, officials said that they’d offer a broad plan this February. That plan never came. Testifying before Congress late last month, Treasury Secretary Tim Geithner said Treasury would offer some “principles and broad objectives” sometime this year, with the goal of offering a concrete proposal next year.
So expect the current state of affairs to continue for at least another year. The companies are in government conservatorship, which means that while they’re under the close watch of the Federal Housing Finance Agency, they’re still nominally separate from the government. The government keeps the companies solvent; in return, the companies say they’ve made stabilizing the housing market their priority.
Check Out Our New Loan Mod Page
Attention, bookmarks! We’ve collected all of our coverage of the government’s mortgage modification program into one place. You can also find our interactive charts showing how well—or poorly—each mortgage servicer has been performing in the program.
Gov’t Wrongly Labels Some Stimulus Recipients ‘Losers’
Weeks Marine won a $5 million stimulus contract to dredge the Mississippi River Delta in Plaquemines Parish, La. The family-owned firm put 37 people to work from June to September. When the project ended, it reported all this for public view on the government’s stimulus Web site, Recovery.gov.
Yet Weeks Marine recently found itself on a government list of “two-time losers,” accused of flouting stimulus rules by failing to file two required reports telling taxpayers how it spent their money.
“I don’t know why we’re on the list,” said Win Apel, general counsel for the New Jersey-based dredging company. “We did in fact file the report.”
Weeks Marine is not an anomaly. ProPublica identified as many as 60 other suspect cases on the list of 360 contractors, local governments and nonprofits compiled by the White House Office of Management and Budget. When asked about the apparent problems, the government’s stimulus oversight panel confirmed that the list had mistakes.
“The list, which we characterized as two-time losers, was certified by various federal agencies,” said Ed Pound, spokesman for the Recovery Accountability and Transparency Board. “It’s bad enough when recipients make errors. It is far more frustrating when agencies do.”
Previous data errors, such as dubious job numbers and incorrect congressional districts, have become easy pickings for Republicans trying to tarnish the stimulus program.
When Congress passed the American Recovery and Reinvestment Act last year, it set up an ambitious plan to publicize how the money was spent. Nearly everyone who got a grant or contract was required to file quarterly reports detailing what they did with the money, how far along the project was and how many jobs they created.
According to the White House, 98 percent of recipients complied with the law. Federal agencies were required to find out who didn’t. The budget office compiled the list of supposed scofflaws and sent it to the Recovery Board, which sought to shame them by posting their names (PDF) on Recovery.gov.
“The two-time losers—those who failed to file reports in the last quarter of 2009 and the earlier reporting period—should really be embarrassed,” Earl Devaney, chairman of the board, said in a news release. “They took millions of dollars and then thumbed their noses at taxpayers.”
Most of the unreported money involves U.S. Army Corps of Engineers projects, Justice Department grants to police departments and Health and Human Services grants to rural medical clinics.
ProPublica checked the two-time loser list by comparing project award numbers and dollar amounts against other data that had been reported on Recovery.gov. The comparison suggested that as many as 60 projects on the list may actually have been reported to the government.
Of those, we sent a sample of 11 projects to the Recovery Board, which so far has verified that six had filed reports and were erroneously included on the losers’ list.
Weeks Marine, for example, filed its report in October. The report is on Recovery.gov, but with a bigger award amount than shown on the “losers” list. The company sent a letter last week to Devaney and its congressmen asking to be removed from the list.
A similar thing appears to have happened to Luhr Bros., an Illinois company dredging the Ohio River in Paducah, Ky. The company’s contract is reported as $4.7 million on Recovery.gov, but the OMB list had the firm down for $1.7 million.
The Finger Lakes Migrant Health Project, a clinic in upstate New York, has received three stimulus grants. But one of them, for $1.2 million, is missing from Recovery.gov. Mary Zelazny, the clinic’s CEO, said the clinic filed the report and provided ProPublica with a copy of a confirmation e-mail she received from the government.
Corps of Engineers officials said the agency is trying to figure out how the recipients who actually reported ended up on the list of shame. A Health and Human Services spokesman said that its review missed some health clinics that had incorrectly filed as subrecipients of grants instead of primary recipients.
Two quarterly reporting deadlines have passed so far, one in October and another in January. Recipients accused of missing both range from John Dewey College in Puerto Rico to the Native Village of Diomede, Alaska, an ice-capped island of 146 people in the Bering Strait, where—as Sarah Palin once said—residents can actually see Russia about 2.5 miles away.
Some who received the largest unreported grants or contracts—including the Ramah Navajo reservation in New Mexico, Del Norte Clinics of California and Kingridge Enterprises of Little Rock, Ark.—did not return calls for comment.
In at least one case, the contractor denies that his project is a stimulus project. Eyak Technology, a Virginia communications firm owned by Alaska natives, received a $650,000 no-bid contract to work on a radio tower for U.S. Customs and Border Protection.
But when Customs drew up the contract it failed to include the stimulus provisions, and Eyak has refused to allow the agency to amend it. Customs spokesman Tara Dunlop said the agency is pursuing “all available legal avenues to ensure Eyak complies with the law and files the required reports.”
Brad Elmquist, Eyak’s vice president of operations, said his firm is complying with the law because there’s nothing on the contract that says it’s funded by the stimulus.
The stimulus contained no penalties for those who fail to file their reports. Devaney, the government’s stimulus watchdog, has testified before Congress in support of establishing penalties, such as fines.
In a December memorandum (PDF), OMB director Peter Orszag advised federal agencies to consider using existing administrative sanctions, including revoking funds from recipients who chronically fail to report.
OMB spokesman Tom Gavin said only one recipient had been penalized in that way so far.
That recipient, the child hunger group Share Our Strength, lost its $87,000 stimulus grant from Americorps to teach low-income families how to cook healthy meals on a budget.
Share Our Strength spokeswoman Margie Fleming Glennon said the group initially didn’t realize there was a requirement and then encountered technical problems filing its second report because the charity’s contractor registration number had expired.
Most Americorps workers whose positions were funded with stimulus money won’t lose their jobs, said Eric Schweikert, the group’s chief financial officer. Share Our Strength will find a spot for them on another federal grant project or pay their salaries with other funds until their current project ends.
“We really regret that we couldn’t figure out the system fast enough,” Schweikert said.
But not everyone flagged as a non-reporter was as gracious.
The Lebanon, Mo., police department was on the “losers” list for not reporting on a $1.2 million stimulus grant from the Justice Department to hire more officers. Jeff Merriman, a consultant who manages the grant, said the department filed a report with the department but not a required report for Recovery.gov.
“I’m not sure where the disconnect happened here, but if the Recovery Act board says we knew about it, I can tell you we did not,” Merriman said. “Regardless, as grant recipients we should have known.”
Even so, he called Devaney’s comments “uncalled for and not reflective of the intent of those accused.”
FBI Confirms Investigations Into Post-Katrina Violence Widening
If you’ve been following our Law & Disorder series, there are a couple of fresh developments.
Our partners at the Times-Picayune have some new information about the expanding federal probe of the New Orleans Police Department, confirming that the FBI is investigating two more shootings described in stories we published in December.
Also, the city’s inspector general publicly accused (PDF) Police Superintendent Warren Riley of illegally obstructing attempts to scrutinize police misconduct and disciplinary files.
“As you know, the relationship between the New Orleans Police Department (NOPD) and the citizens of New Orleans has been poor,” wrote Inspector General E.R. Quatrevaux in a letter sent this week to outgoing Mayor C. Ray Nagin and posted on his office’s Web site.
Quatrevaux is in the process of establishing an independent monitoring body to oversee the NOPD. In the letter, he faults Riley for barring his staffers from reviewing records on police misconduct, discipline and shooting incidents. The Times-Picayune has more on the controversy.
Jennifer LaFleur on Recovery Tracker 3.0
When ProPublica first launched our Recovery Tracker last summer, it proved to be an important resource for journalists and others to use to find out how stimulus funds were being spent in their county or state. And because it was so popular, we updated the information in the Tracker each time new stimulus data became available. This week we published Recovery Tracker 3.0—the next generation in our effort to show where every dollar of the $787 billion Recovery Act is going.
Jennifer LaFleur is ProPublica’s director of computer assisted reporting, and she’s been the leading force in pulling all of this complicated information together. We talked to her about the new additions to Recovery Tracker, how she compiles and “tweaks” the data, why our information is more complete than the government’s and what are the newest developments in computer-assisted reporting.
Articles discussed in this show:
How We Compiled and Analyzed Stimulus Spending
We Made Recovery.gov’s New Stimulus Data Easier to Download
No Matter What Happens, Paterson Gets His Pension
Gov. David Paterson of New York insisted this week that he wouldn't heed calls for his resignation, despite his administration's being roiled by two scandals. But no matter what he does, he is still entitled to his full pension once he retires. In fact, there is nothing any New York state employee can do that would cause them to lose a pension; not even a corruption conviction, being fired for embezzlement or a prison sentence.
A provision in the New York State Constitution, written in 1938 and approved by voters, protects pensions for state employees from being "diminished or impaired." Here's the wording:
After July first, nineteen hundred forty, membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired.
This means that politicians receive their pensions even after they become convicted felons, such as State Sens. Joseph Bruno ($8,007.11 monthly pension) and Guy Velella ($6,251 monthly pension). (Messages to the former senators have not been returned, but we'll update you if we hear from them.) Pensions are determined essentially by averaging the largest three consecutive years of an employee's salary.
The provision comes from public outcry following a 1935 case in which the court established that a pension was a "legislative gratuity," according to a 1996 article in the Temple Law Review. The provision was created to protect public employees from losing their pensions because of "political manipulation and possible collapse," according to the review article.
Harry Corbitt, the State Police superintendent who resigned this week following revelations that he knew that state troopers had visited a woman who was intending to file assault charges against one of Paterson's aides, will receive a $7,064 monthly pension from the state, according to the state comptroller's office. Even if he had been fired, it wouldn't have made a difference.
New York is not alone with its "non-forfeiture" law allowing criminals to keep state pensions, according to the National Association of State Retirement Administrators. More than half of the states have this provision, said Keith Brainard, the organization's research director. "The pension benefit is part of a compensation package," he said. "It's a form of deferred compensation. It's promised amount to pay at a later date."
In other words, state pensions in most states are considered an employee's property. Typically, a pension is considered property after five years of service, said Ron Snell, director of the state services division of the National Conference of State Legislatures. Private companies, on the other hand, sometimes have looser pension protections, Snell noted.
But there is a slow creep toward tighter pension laws that would prevent corrupt officials from cashing in, Snell said. Lawmakers have proposed two bills in Louisiana in the past few weeks, and one passed in Connecticut in 2008. Such a law in Illinois recently prevented former Gov. George Ryan, who was convicted of felony corruption in 2006, from receiving his pension.
Efforts are under way in New York, too. State Sen. Liz Krueger, a Democrat, sponsored a bill that would revoke pensions from elected officials following certain convictions. That bill, however, has yet to see a vote.
The Story So Far on the Gov’t Loan Mod Program
We’ve created a resource page on the government’s loan modification program that puts all of our reporting in one place. Take a look. For those looking for a rundown, below is our summary of the program and the problems it has encountered.
The administration’s foreclosure prevention program began operation last April. The $75 billion program, called Making Home Affordable, focuses on reducing the monthly mortgage payments of struggling homeowners.
Mortgages that are owned or guaranteed by government wards Freddie Mac or Fannie Mae are automatically eligible. Other mortgages are eligible only if the servicer has signed a contract with the Treasury Department. More than 100 servicers have signed up. Mortgage servicers are the companies that specialize in collecting payments and handling individual accounts; they are frequently subsidiaries of banks, but sometimes are stand-alone companies.
We at ProPublica have been closely covering the problems that homeowners have encountered since the program’s launch. Delays and frustration have been common: Homeowners and housing counselors frequently complain that servicers lose financial documents and make mistakes. Many struggling homeowners have waited several months for an answer from their mortgage servicers.
The program suffers from a lack of transparency and accountability, say advocates for troubled homeowners. They complain that there’s no effective recourse to challenge wrong decisions. Aspects of the program also remain secret, like the formula used to determine whether a loan qualifies. Treasury hired a group at Freddie Mac (yes, that Freddie Mac) to audit the program, but it was criticized in its first months for having unqualified personnel. And while Treasury has threatened to penalize servicers that don’t abide by the program guidelines, no such penalties have yet been handed down. Homeowners accepted into the program first go through a three-month trial period; if they stay current on their payments, provide the relevant documents, and still qualify, they are supposed to then be awarded a permanent modification. But for those homeowners who’ve made it into the program’s trial period, the difficulties do not cease. There have been significant backlogs at a number of banks and servicers, particularly the largest: Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. Some homeowners have been stuck in the trial for as long as 10 months, with several potentially adverse consequences.
As a result, the number of homeowners who’ve run the gantlet and emerged with a permanent modification has been proportionately small. As of the end of January, there had been just 116,297 permanent mods out of the 3.4 million mortgages eligible for the program. That said, the program has provided significant savings to homeowners (about $522 a month, on average), even if that relief has been tenuous.
The program provides a system of incentive payments to servicers, investors (which could be a bank or the owners of a mortgage-backed security), and homeowners for performing a permanent loan modification or pursuing another foreclosure alternative. Here’s our interactive list showing how much money has been allocated to each servicer.
Why We’re Giving Away Our Reporting Recipe
Over the past two years, ProPublica reporters Charles Ornstein and Tracy Weber have done a remarkable job of examining how states oversee misconduct by medical professionals, chiefly nurses.
Today, we are doing something relatively unusual for a news organization in the midst of a running story: We’re publishing the journalistic insights and techniques that have allowed us to do this reporting.
Go to our reporting recipe.
ProPublica was created two years ago to pursue stories that would spur change. As part of this mission, we make our finished work and its underlying data available to all. Other news organizations are free to republish stories posted on our site. Reporters across the country have used the data we have compiled on the stimulus to do local versions of these stories. And whenever possible, we post source documents for readers to view.
Now we are taking this principle a step further, giving away the recipe for what has been one of our most powerful reporting efforts to date. We are doing this because we believe there are many ways to prompt change through journalism.
Reporting Network
Want to be notified when we publish data and reporting tools? Sign up here.
Nursing is regulated state by state, and we lack the resources to investigate 50 nursing boards or the agencies regulating a variety of other critical health professionals. But we can share the means for the nation’s newspapers, public radio stations, broadcast outlets and news nonprofits to do so. From what we’ve seen in several states, there are problems nationwide with how quickly these boards act and how they share information with one another and with citizens. Our techniques can help reporters or the public have a significant impact on their communities.
We believe that healthy competition among proud journalists brings more news to light. But in this era of shrinking resources, there is clearly a role for new forms of collaboration. Reporters from various organizations have joined our Reporting Network and helped us look into the lawmakers attending this year’s Super Bowl, or the progress of stimulus projects. We have also worked directly with news organizations on specific stories like police misconduct in New Orleans.
We hope that others will use the techniques created by Ornstein and Weber to hold local officials accountable. Reporters who look into the local boards that oversee nurses or other health professionals will make new discoveries, some of which will undoubtedly go beyond what we have found. That, in turn, will help others push the story ahead. We hope statehouse reporters, beat reporters, general assignment reporters, bloggers, citizen journalists and others will use this road map.
Reporters and others who want to know when we publish data and reporting tools should sign up here.
Those interested in ways of collaborating with ProPublica more frequently can sign up for our Reporting Network, which will let you know when we need help or when we’re distributing resources or new reporting techniques. And if you find something great, we’ll consider posting it.
It is a new day in our business. Now, more than ever, we’re all in this together.
Steve Engelberg & Paul Steiger
Go to our reporting recipe.
Toyota Owners Say Fix Didn’t Work
This is one of our editors' picks from our ongoing roundup of Investigations Elsewhere.
Several Toyota owners whose cars are back on the road after being serviced as part of the automaker’s massive recall have told federal regulators that the fix didn’t work, reports the Los Angeles Times.
The National Highway Traffic Safety Administration has received at least seven complaints in the last two weeks from owners who say that after their cars were serviced, they "still surged out of control," according to the Times. While those reports represent just a tiny fraction of the total number of cars recalled – and the agency hasn’t yet verified their claims – they highlight a concern shared by some safety experts that Toyota’s recall focused on the wrong issues, namely floor mats and gas pedals instead of the electronic throttle system.
In recent congressional testimony, Toyota officials held firm to the company’s stance that electronics are not to blame for the sudden acceleration. But State Farm Insurance presented data suggesting "a strong connection between the introduction of electronic throttle control, also known as drive by wire, and events where drivers of Toyotas couldn't control their cars," according to the Detroit News.
According to the Times report, the NHTSA has pledged to look into whether Toyota electronics are a cause of the problem, and Toyota has commissioned a private study of its throttle system. Toyota has called its solutions "effective and durable." But one of the recent complaints tells a different story: "The fix done by Toyota is not the fix for the acceleration problem," it says.
Introducing Recovery Tracker 3.0: Look Up Stimulus Projects in Your County
We can’t get enough of stimulus data and we know you can’t either, so we’ve updated our Recovery Tracker and added some new features. And you can now count more stimulus money closer to home because we included more information about local projects.
Dive in and see what stimulus money is going to your county.
Once again, we took the latest data on the government’s stimulus Web site, Recovery.gov, cleaned it up, and added thousands of additional spending records. Our previous trackers showed just the prime recipient. This time, we’ve tracked the money to the sub-recipients where we could. That means that instead of seeing a chunk of money going to your state Department of Education, you’ll see how much money your local counties received from the state.
Reporting Network
Want to be notified when we publish data and reporting tools? Sign up here.
We’ve also added data from Cash for Clunkers, a separate program to encourage drivers to trade in older cars that was extended using stimulus funds.
Our latest recovery tracker also includes tens of thousands of new records, not just because they were newly awarded, but because the information was not included in previous versions of federal data. Until recently, a coding glitch meant that thousands of Pell grants funded by federal stimulus money from the U.S. Department of Education did not appear on USAspending.gov. (And as a result, we did not have them in our last set of data.)
Go to our updated Recovery Tracker.