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“It is to the credit of Col. Mike Edmondson (sic) and Master Sgt. Louis Boquet, of Houma, that they declined to accept the raise because of irregularities in its passage.”

—From a Baton Rouge Advocate editorial on Friday, Sept. 19, in an effort to paint Edmonson as a dedicated and noble public servant for “refusing” a $55,000 yearly increase in his pension resulting from a Senate bill amendment that he and his staff helped orchestrate—with assistance from State Sen. Neil Riser (R-Columbia), Gov. Bobby Jindal and Jindal’s executive counsel.

It’s seldom that i disagree publicly with members of the fourth estate. Besides preferring to focus our energy on reporting on the myriad ways state government falls short of its number one priority of protecting the interests of the state and its citizens, we generally have a deep professional respect for our peers in the media.

I worked for 30-plus years in various capacities—sports reporter, news reporter, copy editor, investigative reporter and managing editor—for several newspapers all over the state, including Monroe, Shreveport, Donaldsonville, Baton Rouge and four separate stints at the Ruston Daily Leader where I began almost 50 years ago. I kept returning at a higher position mostly because of my loyalty to my mentor, Publisher Tom Kelly. I even managed to pick up a few reporting awards along the way, including three for investigative reporting.

A news reporter will never get rich working for a newspaper; the pay just isn’t that good. Those who spend their time sitting through endless hours of city council, police jury, school board and even legislative committee meetings, mind-numbing courtroom testimony and who climb out of bed in the middle of the night to cover a shooting or a fire do so for the love of the profession.

So yes, I do maintain an abiding respect for these dedicated individuals.

But when I see facts deliberately being glossed over and key points ignored in order to protect or project a favorable image of a public official who has deliberately and blatantly attempted to use his position or to manipulate the political system to his financial advantage, I cannot in good conscience keep quiet.

The Baton Rouge Advocate editorial of Friday, Sept. 19, stands out as one of the most unabashedly transparent attempts to pin a bouquet on a state official who recently condoned one of the most underhanded attempts at abusing the legislative process in recent memory.

That attempt, of course, was the amendment by State Sen. Neil Riser (R-Columbia) to Senate Bill 294 in the closing hours of the recent legislative session. The bill, authored by State Sen. Jean-Paul Morrell (D-New Orleans) originally addressed procedures to follow in disciplinary cases for law enforcement officers.

Riser added the amendment during a conference committee meeting on the bill. Riser was one of three senators and three House members on the conference committee and on the final vote for passage, House members were told, incorrectly, the bill’s passage would create no fiscal impact.

Bobby Jindal’s executive counsel Thomas Enright, Jr., whose job it is to review bills for propriety and constitutionality, gave the bill his blessings and Jindal promptly signed it into law as Act 859.

LouisianaVoice broke the initial story about how the bill allowed Edmonson to revoke his decision years ago to enter into the state’s Deferred Retirement Option Plan (DROP) which froze his retirement benefits at his then-pay level of $79,000 at his rank of captain. By allowing him to renege on his decision which was supposed to be irrevocable, it allowed him to retire at a rate based on his current colonel’s salary of $134,000. Because he has 30 years of service, he receives 100 percent of his salary as his retirement. Thus, the amendment gave him an instant $55,000 per year increase in retirement.

The amendment inadvertently just happened to include one other person, Master Trooper Louis Boquet of Houma, though he was unaware of the amendment and its implications until the public outcry erupted.

A state district judge, ruling on a lawsuit brought by State Sen. Dan Claitor, said the amendment was unconstitutional on several grounds, thereby killing Edmonson’s retirement windfall.

The four-paragraph Advocate editorial on Friday noted that the matter had been “laid to rest” and noted that such furtive bills are common in the Louisiana Legislature. http://theadvocate.com/news/opinion/10299405-123/our-views-a-lesson-for

But it was a single sentence in that editorial that set me off:

“It is to the credit of Col. Mike Edmondson (sic) and Master Sgt. Louis Boquet, of Houma, that they declined to accept the raise because of irregularities in its passage.”

What?!! Besides the misspelling of Edmonson’s name, the editorial completely (and apparently purposefully) omitted key elements of this sordid story.

  • Edmonson defended the amendment and his additional retirement on Public Radio’s Jim Engster Show;
  • He admitted on that same show that “a staff member” had approached him about the possibility of increasing his retirement benefits via the amendment and he personally okayed that staff member to proceed with the legislative maneuver;
  • Neil Riser first denied any knowledge of how the amendment originated but later confessed that it was he who inserted the language into the bill;
  • The legislative fiscal notes (which detail the potential financial impact of pending bills) were not submitted until three days after the session adjourned, evidence that the entire episode took place on the down low, hidden from public view;
  • During a hearing on the amendment by the State Police Retirement System Board, it was revealed that the board’s actuary was initially approached about the amendment “a few weeks” before the close of the session, further evidence that the move was in the works long before that fateful final day of the session;
  • At that same hearing, it was also revealed that the “staff member” who initiated efforts to pass the amendment was State Police Lt. Col. Charles Dupuy, Edmonson’s chief of staff;
  • Edmonson did not reject the raise until the heat from the public and from retired state police officers became so intense that it was politically impossible for him to go through with the charade. The added threat of a lawsuit by retired state troopers and the attacks on the amendment by State Treasurer John Kennedy only served to ensure the foolhardiness of any continued attempts to claim the money;
  • The way the entire affair played out implicated everyone concerned—Jindal, Enright, Riser, Dupuy and Edmonson—in a pathetic attempt to conceal the deed from public view.

In short, Edmonson’s decision was anything but magnanimous. Quite simply, it was forced upon him by the glaring light of public scrutiny—the one thing he feared most.

This silly effort by the Advocate to make Edmonson’s decision seem noble and to make it appear to be anything other than the hands in the cookie jar scenario that it was is a disservice to its readers and an insult to their intelligence.

Perhaps the Advocate should stick to its previous hard-hitting editorials about how nice sunshine is and how lovely the Spanish moss-laden oak trees on the Capitol grounds are.

When John Georges purchased the Advocate from the Manship family, he went before the Baton Rouge Press Club where he made the utterly bizarre statement that he was focused on “not making people angry.”

I’m sorry Mr. Georges, but when you establish a policy of attempting to publish as little offending reporting as possible, that’s a cowardly decision and you’re simply not doing your job.

It was Thomas Jefferson who said, “If I had to choose between government without newspapers and newspapers without government, I wouldn’t hesitate to choose the latter.”

Georges has obviously chosen the former.

And that decision has made the Advocate less of a newspaper, good only for crawfish boils and housebreaking a puppy.

 

If further evidence is needed that Kristy Kreme Nichols and Susan West are trying to shovel water with a pitchfork in their efforts to put a good face on the looming changes in the Office of Group Benefits (OGB), LouisianaVoice has learned of more developments that aren’t very pretty and which are sure to only intensify the confusion and indecision accompanying the pending open enrollment period that begins on Oct. 1 and runs through Oct. 31.

And now you can add another name to the mix—that of newly hired (at $106,512 per year) Group Benefits Administrator Elise Cazes, formerly an executive with Blue Cross/Blue Shield of Louisiana, which serves at the OGB third party administrator for OGB’s preferred provider organization (PPO).

Nichols, meanwhile, keeps churning out all those happy face news releases—some even written by Gov. Bobby Jindal’s communications officer Mike Reed but published in the Baton Rouge Advocate under her byline—in an attempt to assuage the concerns of some 230,000 state employees, retirees and dependents now covered by OGB.

But now, in addition to the administration’s losing credibility with its rosy assurances in Louisiana, OGB customer service efforts appear to be coming unraveled in California—and perhaps even Florida—at a cost of $1 million to Louisiana taxpayers.

A week ago, we told you about the state’s $1 million contract with Ansafone of Santa Ana, California, and Ocala, Florida (okay, we first said it was Answerphone of Albany, New York and that the contract was for $2 million, but our IT (I’m Telling) source in Nichols’ office was incorrect on those points).

At any rate, the state hired Ansafone to hire 100 persons in California and another 100 in Florida to man phone banks to field questions from OGB members. Not only was it absurd (not to mention heartless) to fire two dozen OGB employees recently because there was “not enough work” for them, but to then pay an out-of-state firm to hire phone bank employees in California and Florida—employees completely unfamiliar with OGB’s proposed coverage plans—was nothing less than insulting, not to mention shortsighted and yes, stupid.

To illustrate our point, we received word today (Thursday) out of California of what can best be described as a monumental disaster in the making. The preparations being made in Santa Ana have all the clearheaded thinking of a sack of rats in a burning meth lab, to paraphrase a line from Two and a-Half Men.

It seems that the job fair for prospective employees to man the phones more closely resembled a cattle call, a term normally used to describe open auditions for movie and television parts. That’s where actors and actresses (in this case prospective telephone service representatives) show up en masse for auditions (job interviews).

Except in this case there were no interviews of any of the 80 or so applicants who showed up. Instead, they were shown a video presentation that passed for orientation at the end of which they were all congratulated on their new jobs. No interviews, no screening, no background checks. Hired.

There followed six days of “training,” that consisted of the reading of handouts distributed to the new employees. “They read to us verbatim from a two-inch-thick document,” said one of the hires who asked that his name not be revealed. “Half of those there kept falling asleep.”

He said the OGB representative, Elise Cazes, asked for feedback from the new employees, some of whom failed to return for the second day of “training.”

“It was not until our first day on the phones that they told us the information they had tried drilling into us was wrong,” he said, adding that they were told to instead use “the knowledge base on the computer.”

He said the problem with that was the knowledge base, which contains a dozen or so links “only comes up when there is a call coming through,” making it impossible to access the data in advance.

“If I take a call, I like to be able to answer questions without having to put him on hold while I search for the proper link to access so the caller does not think I don’t know what the hell I’m doing,” he said.

“I expressed my concerns about this and I asked for printouts of the correct information. I thought they were serious when they said they wanted feedback. I was wrong. Wednesday was my day off and I was called at home and told the client no longer wanted me on the project.”

The “client,” he said, was OGB and the directive came from Cazes.

At least you have to give her credit: she certainly learned quickly that dissention is not tolerated by Jindal and his hand puppets.

Our source said the people Ansafone and OGB have answering insurance plan questions “are grossly unprepared for the questions that plan members have or are going to have with open enrollment begins. The slapped everything together,” he said.

“My last day there (Tuesday) they were still purchasing computers and setting them up. They ran out of room and had to set up in a warehouse with no air conditioning,” he said. “They were running fiber optic cable and wires everywhere.

“I feel bad for these people who are going to be calling. They’re (OGB and Ansafone) are doing everything on the fly. The system is middle school at best. There are going to be dropped calls, incorrect answers and a multitude of other problems,” he said.

He said members who do not select a plan or who do so incorrectly will be automatically defaulted to the Pelican HRA 1000 plan which is the least desirable of the four plans OGB will offer next year.

As you read this, keep in mind that Ansafone’s web page somewhat prophetically contains its “five Star Recipe for Customer Service Failure.” http://www.ansafone.com/five-star-recipe-for-customer-service-failure/

Oops. Looks like that page has been taken down since we called attention to it last Friday. Perhaps Ansafone took one look at the OGB open enrollment plan and saw customer service failure in the cards. And a million bucks can cause you to compromise on otherwise strongly held principles.

Nevertheless, the recipe is was so rich in irony that we can’t resist giving you the three main ingredients again:

  • A “tablespoon of no communication.”
  • A “dash of not caring.”
  • “4 ounces of empty promises.”

OGB members may wish to start a check list to keep score on the accuracy of that recipe just for the fun of it.

The legislature is scheduled to review the OGB Health benefits in the Joint Legislative Committee on the Budget on Friday (Sept. 19) and in the House Appropriations Committee next Thursday (Sept. 25).

Additionally, OGB has scheduled a series of meetings throughout the state during October to answer questions about the open enrollment.

https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4D7A497A4F4445794D793551524559334D6A4531

The information OGB has supplied for annual enrollment leaves many questions unanswered.

One reader has compiled a list of questions that need to be answered before making an informed choice. The questions that should be posed to OGB during these hearings are as follows..

  • The flexible benefits guide for 2015 is not on the website.  Are the IRS maximums of $2500 still applicable?
  • The benefit comparisons do not include any mention of laboratory and radiology services. Are these subject to the deductible? Also, what are the co-pay and/or co-insurance amounts for each plan?
  • Annual mammograms are currently covered with no charge for OGB members. Will this continue? What about pathology for well women pap-smears?
  • Are the co-insurance amounts computed on the contract rate for in-network providers? What about the co-insurance computation for out of network providers—is this on the contract rate or provider charges?
  • Are the listed deductibles for in-network providers a separate amount from the listed deductible for out of network providers? Example, is the total deductible for in-network and out-of-network providers for Pelican HRA 1000 $2000 + $4000 for $6000 deductible? Is this the same answer for all plans?
  • For Out-of-Pocket Maximums (OOPM), once the OOPM is reached, are all services/benefits covered at 100%? Are the OOPMs for in-network providers a separate amount form the listed OOPM for out-of-network providers? Example, is the total OOPMs for in-network and out-of-network providers for Pelican HRA 1000 $5,000 + $10,000 for $15,000 OOPMs? Is this the same answer for all plans?

The problem is the only ones who might have an interest in the OGB open enrollment and the options offered are state employees.

And state employees who ask questions are subject to being teagued.

Ah, but there is a silver lining.

All the meetings, including the legislative committee meetings, are scheduled during the work day which makes it difficult, if not impossible, for many state employees and teachers to attend.

So it appears your jobs are safe for now even if your medical coverage is not.

Whew! That was close!

 

A Baton Rouge district court judge has struck down the so-called Edmonson Amendment, declaring the special retirement benefits enhancement amendment for State Police Superintendent Mike Edmonson and one other state trooper unconstitutional.

Meanwhile, LouisianaVoice has learned that a state police commander passed out a controversial “Hurt Feelings Report” to state troopers several months ago. https://www.google.com/search?q=hurt+feelings+report&hl=en&biw=1280&bih=585&tbm=isch&tbo=u&source=univ&sa=X&ei=ydYYVJ_gGYSuogSpwoK4Aw&sqi=2&ved=0CB0QsAQ

(For an example of “Hurt Feelings Report” forms, click on any image, then move cursor to right and then click on “View Image.”)

Edmonson may now wish to fill out one of those reports.

Judge Janice Clark of 19th Judicial District Court issued the ruling Tuesday morning in a special hearing, bringing to an official end the question of legality and propriety of Amendment 2 of Senate Bill 294, passed on the last day of the recent legislative session.

The ruling leaves egg on the collective faces of Edmonson, his Chief of Staff Charles Dupuy, who conceived of the underhanded (as in sneaky) legislation; State Sen. Neil Riser (R-Columbia), who slipped the last minute amendment past his unsuspecting colleagues in the Senate and House; Gov. Bobby Jindal’s executive counsel Thomas Enright Jr., who supposedly read and blessed the bill, and Jindal, who signed it as Act 859.

The effect of the bill, which was introduced by State Sen. Jean-Paul Morrell (D-New Orleans) as a bill to address disciplinary action to be taken in cases where law enforcement officers are under investigation, was to bump Edmonson’s annual retirement up by $55,000, from its current level of $79,000 to his current salary of $134,000.

Edmonson had entered into the Deferred Retirement Option Plan (DROP) several years ago at his captain’s pay grade in exchange for more take home pay at the time he signed onto DROP. Because of that decision, which is irrevocable, Edmonson was set to receive 100 percent of his captain’s salary after 30 years of service.

Riser’s amendment would have allowed Edmonson to retire instead at 100 percent of his current salary. The bill also benefitted Master Trooper Louis Boquet of Houma even though he was oblivious to events taking place in Baton Rouge.

LouisianaVoice was the first to report the real impact of SB 294 after a sharp-eyed staff member in the Division of Administration (DOA) tipped us off.

Edmonson at first defended the bill on a Baton Rouge radio talk show, saying he was entitled to the increase. He said then that at age 50 he was “forced” to sign up for DROP. That was not accurate; state employees at the time were required to decide whether or not to participate in DROP, but no one was forced into the program.

Continuing the pattern of misrepresentations, Riser said he had no knowledge of who inserted the amendment into the bill during a conference committee meeting. He later acknowledged it was he who made the insertion. Riser was one of three senators and three House members who were on the conference committee.

Jindal, of course, remained strangely quiet about the entire mess, emerging from Iowa or New Hampshire or the Fox News studios only long enough to say that the legislature should correct the matter when it convenes next spring. After making that brief policy statement, he immediately returned to his presidential campaign.

Meanwhile, retired state troopers as well as other retired state employees who had opted into DROP and later received promotions and accompanying pay raises only to have their retirements frozen at the level they were being paid at the time of their entering DROP, went on a rampage with several retired troopers offering to file suit if the State Police Retirement System (LSPRS) Board did not.

At a special meeting of the LSPRS Board earlier this month, it was learned that Dupuy had initiated contact with the board’s actuary several weeks before the session ended to discuss the amendment which he obviously intended to have inserted into the bill in the closing hours of the session. That pretty much shot down any deniability on Riser’s part. And Riser would certainly never have made such an attempt without Jindal’s blessings.

The board, meanwhile, was advised by an attorney with experience in pension plans that it had no standing as a board to file such a suit but board member and State Treasurer John Kennedy immediately announced his intentions to do so as a private citizen.

Meanwhile, State Sen. Dan Claitor (R-Baton Rouge) saw a way to give his campaign for 6th District congressman to succeed U.S. Rep. Bill Cassidy a boost and quickly filed his own suit.

It was Claitor’s suit on which the hearing on a motion for declaratory judgment served as the basis for Judge Clark’s ruling on Tuesday.

Neither Edmonson nor Boquet nor the LSPRS Board opposed the motion.

Following the hearing, Kennedy said the bill was unconstitutional on both the state and federal levels—on several different legal points. “Not only was it unconstitutional,” he said, “it was wrong.” https://www.dropbox.com/sh/erw91d3j3ivkis9/AABhtU96O_u88tVSYLfIQqPra?dl=0#lh:null-IMG_8155.MOV

“This law was patently unconstitutional,” Kennedy said. “Now it’s null and void. This is a win for retirees as well as taxpayers across Louisiana.”

In a statement released after the ruling, Kennedy said one of his objections was that the law would have drawn the enhanced benefits from an experience account that funds cost-of-living increases for retired state troopers and their families.

He testified in the hearing that Louisiana’s four retirement systems already have an unfunded accrued liability (UAL—the gap between the systems’ assets and liabilities) of $19 billion, the sixth worst UAL in the nation.

“This is not about personalities,” he said. “This was about fairness. Regardless of whether you’re a prince or a pauper, you should not receive special treatment.”

The “Hurt Feelings Report” forms, intended to intimidate or demean harassment victims or others who feel they have been slighted or who feel they have been made victims of racial, sexual, or other forms of discrimination, are parodies that attack otherwise genuine concerns of bullying in the workplace.

The commander who passed the forms out to his troopers obviously thought it was a hilarious joke and a great way to deal with potential complaints but officials in Buffalo, Wyoming didn’t think they were so funny.

A 13-year veteran Buffalo High School football coach who passed out the “survey” to his players was forced to resign after his actions became public. The survey listed several options as reasons for hurt feelings, including “I am a queer,” “I am a little bitch,” and “I have woman like hormones.” It asked for the identity of the “little sissy filing report” and for his “girly-man signature,” plus the “real-man signature” of the person accused of causing hurt feelings.

Coach Pat Lynch, as is always the case when those in positions of authority are caught doing something incredibly stupid, offered a letter of resignation in which he said, “I would like to apologize for my lack of judgment and the poor choice….” (You know the words to this worn out song by now. We’ve heard them from politicians like David Vitter, athletes like Ray Rice, even ministers like Jimmy Swaggart.)

So now we have a state police commander who has attempted by distribution of this document to ridicule—in advance—anyone under his command who feels he or she has been the victim of discrimination or harassment and to discourage them from filing formal complaints.

There appears to be no level of stupidity to which some people will not stoop.

Members of Congress enter office already soliciting funds for the next election. It’s unfortunate that the system works this way but the concentration of wealth in the hands of the uncontrolled rich and powerful who want to be richer and more powerful, unfortunately, has made this an unavoidable fact of political life.

Warren Buffet said as much when he said, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” Buffet, for the record, wasn’t boasting, just stating a fact.

The foundation of rights in America is eroding from beneath our feet with every dollar poured into a political campaign by some political action committee. Every check written goes a little further in silencing the voice of the American middle class, a class that is shrinking with every vote case in Congress in favor of Wall Street, PhRMA, big oil, or defense contractors who often contribute to opposing candidates in the same race to hedge their bets.

Nowhere is that more evident than the page after page after page of PAC contributions to various candidates reported by the Federal Elections Commission. To ignore the dark money of these organizations would be to commit political suicide.

Yet, with each contribution accepted, our elected officials sink ever deeper into ethical gray areas, conflicts of interest and outright corruption. That’s because they never expected anyone to be looking over their shoulder when they took the contributions.

After scrolling through the lengthy list that follows, you might find yourself wondering if 3rd Congressional District Rep. Charles Boustany, Jr., would have accepted many of the following contributions had he known we were watching.

And keep in mind this is just a partial list of his $984,000 in PAC contributions.

ABBOTT LABORATORIES PAC: $5,000

  • In October 2011, the company agreed to pay at least $1.3 billion for illegally marketing its epilepsy drug Depakote to the U.S. government and 24 states. It is the third-largest pharmaceutical settlement in U.S. history. Shareholders then brought derivative suits against the company directors for breach of fiduciary duty.
  • On October 2, 2012, the company was charged with a $500 million fine and $198.5 million forfeiture for illegal marketing, and in a plea agreement was assessed the second-largest criminal fine in U.S. history for a drug company. U.S. District Court Judge Samuel G Wilson of the Western District of Virginia imposed it given Abbott’s guilty plea related to its unlawful promotion of Depakote for uses not approved by the FDA.
  • Abbotts Laboratories has been reported to use tax avoidance strategies. In 2011, two Irish subsidiaries of Abbott Laboratories made a profit of $1.8 billion and $1.1 billion respectively, but paid no tax. This is possible due to the Double Irish arrangement. While the directors of the company are all US-based, the first one is a direct subsidiary of an Abbott company in Switzerland which has no staff and has its registered office in Bermuda. It is considered as a “non-resident Irish entity incorporated in Bermuda” and therefore is exempted of taxes in both US and Irish jurisdiction.

ALTRIA GROUP PAC: $1,000

  • Altria Group, Inc. (previously named Philip Morris Companies Inc.) The name change alternative offers the possibility of masking the negatives associated with the tobacco business,” thus enabling the company to improve its image and raise its profile without sacrificing tobacco profits,
  • According to the Center for Public Integrity, Altria spent around $101 million on lobbying the U.S. government between 1998 and 2004, making it the second most active organization in the nation.
  • Altria also funded The Advancement of Sound Science Coalition which lobbied against the scientific consensus on climate change.
  • Daniel Smith, representing Altria, sits on the Private Enterprise Board of the American Legislative Exchange Council (ALEC).

AMERICAN BANKERS ASSOCIATION PAC: $8,500

  • The financial crisis of 2007-2010 led to a sweeping overhaul of the United States financial regulatory system. The ABA spent $4.38 million on lobbying Congress in the first two quarters of 2011 alone. The ABA lobbied the White House, the departments of Agriculture, Treasury and Labor, and regulators such as the Federal Reserve, Commodity Futures Trading Commission and Securities and Exchange Commission.
  • As soon as the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law on July 21, 2011, the American Bankers Association announced it would continue to lobby for fewer regulations on the Volcker Rule, derivatives regulations, and other pieces of the bill.

AT&T PAC: $3,500

  • AT&T is the second-largest donor to United States political campaigns, and the top American corporate donor, having contributed more than US$47.7 million since 1990, 56% and 44% of which went to Republican and Democratic recipients, respectively. Also, during the period of 1998 to 2010, the company expended US$130 million on lobbying in the United States. A key political issue for AT&T has been the question of which businesses win the right to profit by providing broadband internet access in the United States.
  • Bobby Jindal rejected an $80 million federal grant for the expansion of broadband internet service in rural Louisiana even as AT&T was contributing $250,000 to the Foundation run by Jindal’s wife Supriya after Gov. Jindal signed SB- 807 into law (Act 433) in 2008 over the objections of the Louisiana Municipal and the State Police Jury associations. The bill, the Consumer Choice for Television Act removed from local and parish governments their authority and responsibility to negotiate cable franchise agreements with companies that relied largely on locally-owned public infrastructure such as utility poles. The bill also allows AT&T to sell cable television service without the necessity of obtaining local franchises.
  • Bill Leahy, representing AT&T, sits on the Private Enterprise Board of the American Legislative Exchange Council (ALEC).

BANK OF AMERICA PAC: $10,000

  • Bank of America (BOA) received $20 billion in the federal bailout from the U.S. government through the Troubled Asset Relief Program (TARP) in 2009, as well as a guarantee of $118 billion to cover potential losses by the company—in addition to the $25 billion given to them in the fall 2008 through TARP. The additional payment was part of a deal with the U.S. government to preserve BOA’s merger with the troubled investment firm Merrill Lynch. Since then, members of Congress expressed concern that some of the recipients had been accused of misusing the bailout money and that loan applicants (particularly small business owners) were denied loans and credit card holders faced stiffer terms on the debt in their card accounts.
  • BOA received an additional $5.2 billion in government bailout money, channeled through American International Group (AIG).
  • On August 3, 2009, BOA agreed to pay a $33 million fine, without admission or denial of charges, to the U.S. Securities and Exchange Commission (SEC) over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill Lynch. The bank approved the bonuses before the merger but did not disclose them to its shareholders when the shareholders were considering approving the Merrill acquisition in December 2008. New York State Attorney General Andrew Cuomo commented after the suit and announced settlement that “the timing of the bonuses, as well as the disclosures relating to them, constituted a ‘surprising fit of corporate irresponsibility.”
  • In 2010, the bank was accused by the U.S. government of defrauding schools, hospitals, and dozens of state and local government organizations via misconduct and illegal activities involving the investment of proceeds from municipal bond sales. As a result, the bank agreed to pay $137.7 million, including $25 million to the Internal Revenue service and $4.5 million to state attorney general, to the affected organizations to settle the allegations.
  • On October 24, 2012, the top federal prosecutor in Manhattan filed a lawsuit alleging that BOA fraudulently cost American taxpayers more than $1 billion when it sold toxic mortgages to Fannie Mae and Freddie Mac. The scheme was called ‘Hustle’, or High Speed Swim Lane.
  • In August 2014, BOA agreed to a near-$17 billion deal to settle claims against it relating to the sale of toxic mortgage-linked securities including subprime home loans, in what was believed to be the largest settlement in U.S. corporate history. The bank agreed to pay $9.65 billion in fines and $7 billion in relief to the victims of the faulty loans which included homeowners, borrowers, pension funds and municipalities.

BECHTEL GROUP PAC: $2,500

  • Bechtel’s work has been the subject of controversy, including a number of cases of contractor misconduct in the United States in the past decade. These cases have included significant issues at a site in Hanford, Washington, where Bechtel was decommissioning a former nuclear weapons site without conducting adequate safety reviews of some of the equipment used. Bechtel’s failure to conduct safety reviews of the equipment led to at least some underground tanks leaking radioactive waste in to nearby groundwater. Senator Ron Wyden alleged that Bechtel fired a whistleblower at the Hanford site, and expressed concern that this would discourage further whistleblowers from coming forward.
  • In Bolivia, one of Latin America’s poorest countries, Bechtel increased water rates by more than 50 percent after it secured a very controversial concession in the country just after a privatization program of water systems led by the US based World Bank in the late 90s.

BOEING PAC: $8,500

  • In 2003, Lockheed Martin sued Boeing for industrial espionage to win the Evolved Expendable Launch Vehicle (EELV) competition. Lockheed Martin claimed that the former employee Kenneth Branch, who went to work for McDonnell Douglas and Boeing, passed nearly 30,000 pages of proprietary documents to his new employers. Lockheed Martin argued that these documents allowed Boeing to win 19 of the 28 tendered military satellite launches.
  • In July 2003, Boeing was penalized, with the Pentagon stripping seven launches away from the company and awarding them to Lockheed Martin. Furthermore, the company was forbidden to bid for rocket contracts for a twenty-month period, which expired in March 2005. Boeing settled with the U.S. Department of Justice for $615 million.
  • On September 15, 2010, the World Trade Organization ruled that Boeing had received billions of dollars in illegal government subsidies.

BP CORP. PAC: $6,000

  • Technically, it is illegal for foreign entities to contribute to political campaigns in the U.S. but BP gets around that law by contributing through its U.S. arm of the company, BP Corp. North America.
  • In September 1999, one of BP’s US subsidiaries, BP Exploration Alaska (BPXA), pleaded guilty to criminal charges stemming from its illegally dumping of hazardous wastes on the Alaska North Slope, paying fines and penalties totaling $22 million. BP paid the maximum $500,000 in criminal fines, $6.5 million in civil penalties, and established a $15 million environmental management system at all of BP facilities in the US and Gulf of Mexico that are engaged in oil exploration, drilling or production. The charges stemmed from the 1993 to 1995 dumping of hazardous wastes on Endicott Island, Alaska by BP’s contractor Doyon Drilling. The firm illegally discharged toxic and hazardous substances by injecting them down the outer rim, or annuli, of the oil wells.
  • In 2006, a group of Colombian farmers reached a multimillion dollar out-of-court settlement with BP for alleged environmental damage caused by the Ocensa pipeline.
  • In 2009, another group of 95 Colombian farmers filed a suit against BP, saying the company’s Ocensa pipeline caused landslides and damage to soil and groundwater, affecting crops, livestock, and contaminating water supplies, making fish ponds unsustainable. Most of the land traversed by the pipeline was owned by peasant farmers who were illiterate and unable to read the environmental impact assessment conducted by BP prior to construction, which acknowledged significant and widespread risks of damage to the land.
  • BP attained a negative public image from the series of industrial accidents that occurred through the 2000s, and its public image was severely damaged after the Deepwater Horizon explosion and Gulf Oil spill that killed 11 men. In the immediate aftermath of the spill, BP initially downplayed the severity of the incident and made many of the same PR errors that Exxon had made after the Exxon Valdez CEO Tony Hayward was criticized for his statements and had committed several gaffes, including stating that he “wanted his life back.”
  • A federal judge ruled on Sept. 4, 2014, that BP was grossly negligent in helping cause the Deepwater Horizon oil spill of 2010, and that the oil company is liable for 67 percent of the blame.

CHESAPEAKE ENERGY CORP. PAC: $10,000

  • Chesapeake Energy Corp must face trial on charges of felony racketeering and using false pretenses related to its land-leasing practices, a state judge has ruled. Cheboygan District Court Judge Maria Barton ruled on Sept. 8, 2014, that Oklahoma-based Chesapeake will be tried on one charge of racketeering and 20 counts of using false pretenses to allegedly defraud private landowners in the state during an oil and gas leasing boom in 2010.
  • Former Chief Executive Aubrey McClendon borrowed $1.1 billion against his stake in thousands of company wells. The loans, undisclosed to shareholders, were used to fund McClendon’s operating costs for the Founders Well Participation Program, which offered him a chance to invest in a 2.5 percent interest in every well the company drills. McClendon in turn used the 2.5 percent stakes as collateral on those same loans. Analysts, academics and attorneys who reviewed the loan documents said the structure raised the potential for conflicts of interest and raised questions on the corporate governance and business ethics of Chesapeake Energy’s senior management. The company disagreed that this is a conflict of interest or a violation of business ethics.
  • Current CEO Doug Lawler was responsible for laying off over 800 employees—roughly 16 percent of the workforce—within a few months of taking the position. Lawler released waves of employees over the course of a few months. All of the layoffs culminated in October of 2013 when Lawler released a staggering 800 employees nationwide, 640 of whom were from the corporate office in Oklahoma City.

CITIGROUP: $4,500

  • In 2003, Citigroup published an investment brochure advising clients that “There is no ‘average consumer…Economic growth is powered by and largely consumed by the wealthy few.”
  • Heavy exposure to troubled mortgages compounded by poor risk management led Citigroup into trouble as the subprime mortgage crisis worsened in 2008. Citigroup announced on April 11, 2007, that it would eliminate 17,000 jobs, or about 5 percent of its workforce. Even after brokerage firm Bear Stearns ran into serious trouble in summer 2007, Citigroup decided the possibility of trouble with its CDO’s was so tiny that they excluded them from their risk analysis. With the crisis worsening, Citigroup announced on January 7, 2008 that it was considering cutting another 5 to 10 percent of its 327,000 member-workforce.
  • By November 2008, Citigroup was insolvent, despite its receipt of $25 billion in taxpayer funded federal TARP funds. On November 17, 2008, Citigroup announced plans for about 52,000 new job cuts—on top of 23,000 cuts already made during 2008.

DUKE ENERGY: $2,000

  • In 1999 the EPA initiated an enforcement action against Duke Energy for making modifications to old and deteriorating coal-burning power plants without getting permits under the Clean Air Act.
  • In 2002, researchers identified Duke Energy as the 46th-largest corporate producer of air pollution in the United States, with roughly 36 million pounds of toxic chemicals released into the air annually. Major pollutants included sulfuric and hydrochloric acid, chromium compounds, and hydrogen fluoride. The Political Economy Research Institute ranks Duke Energy 13th among corporations emitting airborne pollutants in the United States.

ERNST & YOUNG PAC: $5,500

  • In 2009, EY agreed to pay US$200m out of court to settle a negligence claim by the liquidators of Akai Holdings. It was alleged that EY falsified dozens of documents to cover up the theft of over US$800m by Akai’s chairman. In a separate lawsuit a former EY partner, Cristopher Ho, made a “substantial payment” to Akai creditors in his role as chairman of the company that had bought Akai just before it went bust in 2000. Police raided the Hong Kong office and arrested an EY partner who had been an audit manager on the Akai account from December 1997, although audit documents had been doctored dating back to 1994.
  • A few months later EY settled a similar claim of up to HK$300m from the liquidators of Moulin Global Eyecare, an audit client of the Hong Kong affiliate between 2002 and 2004. The liquidators described the Moulin accounts as a “morass of dodginess.”

GENERAL ELECTRIC: $4,000

  • According to the New York Times story, GE reported U.S. profits of $5.1 billion in 2010 (and $14.2 billion worldwide). “Its American tax bill?” asked the Times. “None. In fact, G.E. claimed a tax benefit of $3.2 billion,” an amount GE balanced out against other tax obligations. The company accomplished this, the story said, due to “an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.”
  • Earlier this year, GE filed suit seeking a $658 million federal tax refund. That sum represents the $439 million in taxes and $219 million in interest GE coughed up in 2010 after Internal Revenue Service auditors disallowed a $2.2 billion loss it claimed from the 2003 sale of a small subsidiary, ERC Life Reinsurance Corp., to Scottish Re Group for $151 million.

HALLIBURTON CO. PAC: $2,000

  • Following the end of Operation Desert Storm in February 1991, the Pentagon, led by then defense secretary Dick Cheney, paid Halliburton subsidiary Brown & Root Services more than $8.5 million to study the use of private military forces with American soldiers in combat zones. Halliburton crews also helped bring 725 burning oil wells under control in Kuwait.
  • In 1995, Cheney replaced Thomas H. Cruikshank, as chairman and CEO.
  • In the early 1990s, Halliburton was found to be in violation of federal trade barriers in Iraq and Libya, having sold these countries dual-use oil drilling equipment and, through its former subsidiary, Halliburton Logging Services, sending six pulse neutron generators to Libya. After pleading guilty, the company was fined $1.2 million, with another $2.61 million in penalties.
  • From 1995 to 2002, Halliburton Brown & Root Services Corp. (BRS) was awarded at least $2.5 billion to construct and run military bases, some in secret locations, as part of the Army’s Logistics Civil Augmentation Program. This contract was a cost plus 13 percent contract and BRS employees were trained on how to pass GAO audits to ensure maximum profits were attained. Any mention in the Balkans of Cheney’s being CEO was grounds for termination. BRS was awarded and re-awarded contracts termed “noncompetitive” because BRS was the only company capable of pulling off the missions. DynCorp actually won the competitively let second contract, but never received any work orders in the Balkans.
  • In May 2003, Halliburton revealed in SEC filings that its KBR subsidiary had paid a Nigerian official $2.4 million in bribes in order to receive favorable tax treatment.
  • On January 24, 2006, Halliburton’s subsidiary KBR (formerly Kellogg, Brown and Root) announced that it had been awarded a $385 million contingency contract by the Department of Homeland Security to build “temporary detention and processing facilities” or internment camps.
  • On May 14, 2010, President Barack Obama said in an interview with CNN that “you had executives of BP and Transocean and Halliburton falling over each other to point the finger of blame at somebody else” when referring to the congressional hearings held during the Deepwater Horizon oil spill.

HONEYWELL INTERNATIONAL PAC: $5,000

  • In December 2011, the non-partisan liberal organization Public Campaign criticized Honeywell International for spending $18.3 million on lobbying while paying no taxes during 2008–2010, instead getting $34 million in tax rebates, despite making a profit of $4.9 billion, laying off 968 workers since 2008, and increasing executive pay by 15% to $54.2 million in 2010 for its top 5 executives.
  • Honeywell has been criticized in the past for its manufacture of deadly and maiming weapons. The Honeywell Project, for example, targeted Honeywell executives in an attempt to halt the production of cluster bombs.
  • The EPA said that no corporation has been linked to a greater number of Superfund toxic waste sites than has Honeywell. Honeywell ranks 44th in a list of US corporations most responsible for air pollution, releasing more than 9.4 million pounds of toxins per year into the air. In 2001, Honeywell agreed to pay $150,000 in civil penalties and to perform $772,000 worth of reparations for environmental violations involving:
  • failure to prevent or repair leaks of hazardous organic pollutants into the air
  • failure to repair or report refrigeration equipment containing chlorofluorocarbons
  • inadequate reporting of benzene, ammonia, nitrogen oxide, dichlorodifluoromethane, sulfuric acid, sulfur dioxide and caprolactam emissions
  • In 2003, a federal judge in New Jersey ordered the company to perform an estimated $400 million environmental remediation of chromium waste, citing “a substantial risk of imminent damage to public health and safety and imminent and severe damage to the environment.” In the same year, Honeywell paid $3.6 million to avoid a federal trial regarding its responsibility for trichloroethylene contamination in Illinois. In 2004, the State of New York announced that it would require Honeywell to complete an estimated $448 million cleanup of more than 165,000 pounds of mercury and other toxic waste dumped into Onondaga Lake in Syracuse. In 2005, the state of New Jersey sued Honeywell, Occidental Petroleum and PPG to compel cleanup of more than 100 sites contaminated with chromium, a metal linked to lung cancer, ulcers and dermatitis. In 2008, the state of Arizona made a settlement with Honeywell to pay a $5 million fine and contribute $1 million to a local air-quality cleanup project, after allegations of breaking water-quality and hazardous-waste laws on hundreds of occasions between the years of 1974 and 2004.

INVESTMENT COMPANY INSTITUTE PAC: $11,100

  • ICI lobbies on behalf of investment companies, working closely with policymakers and regulators through outreach efforts involving economic and legal analysis, sometimes advocating directly to the public on issues important to its members. It also donated $1.6 million for the 2012 PAC election cycle. In 2012, the ICI spent an additional $5 million on lobbying.

JOHNSON & JOHNSON PAC: $3,500

  • Juries in several U.S. states have found J&J guilty of hiding what it knew about the adverse effects of its antipsychotic medication Risperdal in order to promote it to doctors and patients as better than cheaper generics. J&J falsely marketed it to nursing home professionals and physicians for treating patients with dementia. States that have awarded damages include Texas ($158 million), South Carolina ($327 million), Louisiana ($258 million), and most notably Arkansas ($1.2 billion) – the Attorney General stated: “These two companies put profits before people, and they are rightfully being held responsible for their actions
  • Johnson and Johnson has also been subject to congressional investigations over secret payments and misleading ghost written articles given to leading psychiatrists promoting its products.

KOCH INDUSTRIES PAC: $5,000

  • From 1999 to 2003, Koch Industries was assessed more than $400 million in fines, penalties and judgments. In 2000, for 300 reported oil spills which had taken place across six states, Koch paid the largest civil fine ever imposed on a company for the illegal discharge of crude oil and petroleum products. The company agreed to pay a $30 million civil penalty, improve its leak-prevention programs and spend $5 million on environmental projects.
  • In 1996, an 8-inch-diameter steel pipeline operated by Koch Pipeline Company ruptured near Lively, Texas and began leaking butane gas. The vapor cloud ignited when two residents drove their pickup truck through the flammable vapors to get to a neighbor’s house to report the leak. The two were killed in the explosion. In 1999, a Texas jury found that negligence had led to the rupture of the Koch pipeline and awarded the victims’ families $296 million—the largest compensatory damages judgment in a wrongful death case against a corporation in U.S. history.
  • In 2000, a federal grand jury returned a 97-count indictment against Koch Industries for excess emissions of 85 metric tons of benzene, a known carcinogen. In 2001, Koch Industries was fined $20 million, of which $10 million was a criminal fine and $10 million to clean up the environment.
  • In 2008, Koch Industries discovered that the French affiliate Koch-Glitsch had violated bribery laws allegedly securing contracts in Algeria, Egypt, India, Morocco, Nigeria and Saudi Arabia after an investigation by Ethics Compliance officer, Egorova-Farines. After Koch Industries’ investigative team looked into her findings, the four employees involved were terminated. Egorova-Farines reported her findings immediately, and even after Koch’s investigators substantiated the findings, her “superiors removed her from the inquiry in August 2008 and fired her in June 2009, calling her incompetent.”
  • Koch Industries has spent more than $50 million to lobby in Washington between 2006 and October 2011.
  • The company has opposed the regulation of financial derivatives and limits on greenhouse gases. It sponsors free market foundations and causes and is one of the leading benefactors of the American Legislative Exchange Council (ALEC).
  • According to the Center for Responsive Politics, many of Koch Industries’ contributions have gone toward achieving legislation on energy issues, defense appropriations and financial regulation reform. Koch Industries has been criticized for the role the company plays in affecting climate change policy in the U.S.

LOCKHEED MARTIN EMPLOYEES’ PAC: $6,500

  • Lockheed Martin received $36 billion in government contracts in 2008, more than any company in history. It does work for more than two dozen government agencies from the Department of Defense and the Department of Energy to the Department of Agriculture and the Environmental Protection Agency. It’s involved in surveillance and information processing for the CIA, the FBI, the Internal Revenue Service (IRS), the National Security Agency (NSA), The Pentagon, the Census Bureau and the Postal Service.
  • Lockheed is listed as the largest U.S. government contractor and ranks third for number of incidents, and 21st for size of settlements. Since 1995 the company has agreed to pay $606 million to settle 59 instances of misconduct.
  • Through its political action committee (PAC), the company provides low levels of financial support to candidates who advocate national defense and relevant business issues. It was the top contributor to House Armed Services Committee chairman Howard P. “Buck” McKeon (R-California), giving more than $50,000 in the most recent election cycle. It also topped the list of donors to Sen. Daniel Inouye (D-HI), chairman of the Senate Appropriations Committee before his death in 2012.
  • Lockheed Martin Employees Political Action Committee is one of the 50 largest in the country. With contributions from 3,000 employees, it donates $500,000 a year to about 260 House and Senate candidates.
  • In March 2013, Maryland State Senate Majority Leader Rob Garagiola, while he was said to be dating a Lockheed Martin lobbyist, cosponsored a resolution which would give Lockheed Martin tax rebate worth millions of dollars related to hotel taxes paid at its CLE facility in Bethesda, MD. This was after Montgomery County Council refused to pass a similar resolution.

MARATHON OIL EMPLOYEES PAC: $12,000

  • Marathon gave $250,000 to the Supriya Jindal Foundation and Gov. Bobby Jindal’s administration promptly awarded Marathon subsidiaries $5.2 million in state funds.

MERCK & CO.:  $2,500

  • A US Justice Department fraud investigation began in 2000 when allegations were brought in two separate lawsuits filed by whistleblowers who alleged that Merck failed to pay proper rebates to Medicaid and other health care programs and paid illegal remuneration to health care providers. In 2008, Merck agreed to pay more than $650 million to settle charges that it routinely overbilled Medicaid for its most popular medicines. The settlement was one of the largest pharmaceutical settlements in history. The federal government received more than $360 million, plus 49 states and Washington, DC, received over $290 million. One whistleblower received a $68 million reward. Merck made the settlement without an admission of liability or wrongdoing.
  • From 2002 through 2005 the Australian affiliate of Merck sponsored the eight issues of a medical journal, the Australasian Journal of Bone and Joint Medicine, published by Elsevier. Although it gave the appearance of being an independent peer-reviewed journal, without any indication that Merck had paid for it, the journal actually reprinted articles that originally appeared in other publications and that were favorable to Merck. The misleading publication came to light in 2009 during a personal injury lawsuit filed over Vioxx; 9 of 29 articles in the journal’s second issue referred positively to Vioxx. In 2009, the CEO of Elsevier’s Health Sciences Division, Michael Hansen, admitted that the practice was “unacceptable”.
  • In December 2013, Merck agreed to pay a total of $27.7 million dollars to 1,200 plaintiffs in a class action lawsuit alleging that the company’s osteoporosis drug had caused them to develop osteonecrosis of the jaw.

MORGAN STANLEY: $7,000

  • In 2003, Morgan Stanley agreed to pay $125 million in order to settle its portion of a $1.4 billion settlement brought by New York Attorney General Eliot Spitzer, the National Association of Securities Dealers, the United States Securities and Exchange Commission, (SEC) and a number of state securities regulators, relating to intentionally misleading research motivated by a desire to win investment banking business with the companies covered.
  • Morgan Stanley settled a sex discrimination suit brought by the Equal Employment Opportunity Commission for $54 million in July 2004. In 2007, the firm agreed to pay $46 million to settle a class action lawsuit brought by eight female brokers.
  • In July 2004, the firm paid NASD a $2.2 million fine for more than 1,800 late disclosures of reportable information about its brokers.
  • In September 2004, the firm paid a $19 million fine imposed by NYSE for failure to deliver prospectuses to customers in registered offerings, inaccurate reporting of certain program trading information, short sale violations, failures to fingerprint new employees and failure to timely file exchange forms.
  • The New York Stock Exchange imposed a $19 million fine on January 12, 2005 for alleged regulatory and supervisory lapses, the largest fine ever imposed by NYSE at the time.
  • In 2005, a Florida jury found that Morgan Stanley failed to give adequate information to Ronald Perelman about Sunbeam thereby defrauding him and causing damages to him of $604 million. In addition, punitive damages were added for total damages of $1.450 billion after the firm’s attorneys infuriated the court by failing and refusing to produce documents, and falsely telling the court that certain documents did not exist. The ruling was overturned in 2007.
  • Morgan Stanley settled a class action lawsuit in 2006 by both current and former Morgan Stanley employees for unfair labor practices instituted upon those in the financial advisor training program. Employees of the program had claimed the firm expected trainees to clock overtime hours without additional pay and handle various administrative expenses as a result of their expected duties. Morgan Stanley settled for $42.5 million.
  • In May the firm agreed to pay a $15 million fine after the Securities and Exchange Commission accused the firm of deleting emails and failing to cooperate with SEC investigators.
  • FINRA announced a $12.5 million settlement with Morgan Stanley in 2007 over charges that the firm’s former affiliate, Morgan Stanley DW, Inc. (MSDW), failed on numerous occasions to provide emails to claimants in arbitration proceedings as well as to regulators. The company had claimed that the destruction of the firm’s email servers in the September 11, 2001 terrorist attacks on New York’s World Trade Center resulted in the loss of all email before that date. In fact, the firm had millions of earlier emails that had been retrieved from backup copies stored in another location that was not destroyed in the attacks. Customers who had lost their arbitration cases against Morgan Stanley DW Inc. because of their inability to obtain these emails to demonstrate Morgan Stanley’s misconduct received a token amount of money as a result of the settlement.
  • In July 2007, Morgan Stanley agreed to pay $4.4 million to settle a class-action lawsuit for incorrectly charging clients for storage of precious metals.
  • In August 2007, Morgan Stanley was fined $1.5 million and paid $4.6 million in restitution to customers related to excessive mark-ups in 2,800 transactions. An employee was charged $40,000 and suspended for 15 days.
  • Under a 2008 settlement with New York Attorney General Andrew M. Cuomo, the firm agreed to repurchase approximately $4.5 billion worth of auction rate securities. The firm was accused of misrepresenting auction rate securities in their sales and marketing.
  • In April 2010, the Commodity Futures Trading Commission announced the firm agreed to pay $14 million related to an attempt to hide prohibited trading activity in oil futures.
  • The Department of Justice sought a $4.8 million fine from Morgan Stanley for its part in an electricity price-fixing scandal. Con Edison estimated that the crime cost New York state consumers about $300 million. Morgan Stanley earned revenues of $21.6 million from the fraud.
  • Morgan Stanley agreed to pay a $5 million fine to the Commodity Futures Trading Commission and an addition $1.75 million to CME and the Chicago Board of Trade after employees improperly executed fictitious sales in Eurodollar and Treasury note futures contracts.
  • On August 7, 2012, it was announced that Morgan Stanley would have to pay $4.8 million in fines in order to settle a price fixing scandal, which has been estimated to have cost New Yorkers $300 million.

OCCIDENTAL PETROLEUM PAC: $6,000

  • Occidental entered the chemical business with the acquisition of Hooker Chemical Co. in 1968, 26 years after the contamination at Love Canal. It added to its chemical industries portfolio in 1988 with the outright purchase for $2 billion of Cain Chemical. On July 6, 1988, an explosion on the Piper Alpha platform, operated by Occidental Petroleum in the Scottish North Sea, resulted in 167 fatalities in what remains the world’s most deadly offshore disaster.
  • Occidental’s coal interests were represented for many years by attorney and former U.S. Sen. Albert Gore, Sr., among others. Gore, who had a long-time close friendship with Occidental Chairman Armand Hammer, became the head of the subsidiary Island Creek Coal Company, upon his re-election loss. Much of Occidental’s coal and phosphate production was in Tennessee, the state Gore represented in the Senate, and Gore owned shares in the company. Former Vice President Albert Gore, Jr. received much criticism from environmentalists, when he became executor of his father’s estate.

PFIZER, INC. PAC: $3,000

  • In September 2009, Pfizer pleaded guilty to the illegal marketing of the arthritis drug Bextra for uses unapproved by the U.S. Food and Drug Administration (FDA), and agreed to a $2.3 billion settlement, the largest health care fraud settlement at that time. Pfizer also paid the U.S. government $1.3 billion in criminal fines related to the “off-label” marketing of Bextra, the largest monetary penalty ever rendered for any crime. Called a repeat offender by prosecutors, this was Pfizer’s fourth such settlement with the U.S. Department of Justice in the previous ten years.

R.J. REYNOLDS PAC: $3,500

(It seems curious that a physician would accept campaign money from a tobacco company.)

  • In 1994, then CEO James Johnston testified under oath before Congress, saying that he didn’t believe that nicotine is addictive.
  • In 2002, the company was fined $15m for handing out free cigarettes at events attended by children, and was fined $20m for breaking the 1998 Master Agreement, which restricted targeting youth in its tobacco advertisements.
  • In May 2006 former R.J. Reynolds vice-president of sales Stan Smith pleaded guilty to charges of defrauding the Canadian government of $1.2 billion through a cigarette smuggling operation. Smith confessed to overseeing the 1990s operation while employed by RJR. Canadian-brand cigarettes were smuggled out of and back into Canada, or smuggled from Puerto Rico, and sold on the black market to avoid taxes. The judge referred to it as biggest fraud case in Canadian history.

RAYTHEON CO. PAC: $3,500

  • In March 1990, Raytheon pleaded guilty to one felony count of illegally obtaining classified Air Force budget and planning documents. U.S. District Judge Albert V. Bryan, Jr. imposed a $10,000 criminal fine for one felony count of “conveyance without authority” and $900,000 in civil penalties and damages. The documents allegedly gave Raytheon an unfair advantage against its competitors in bidding for weapons contracts. Although the plea only involved 1983 Air Force documents, U.S. Attorney Henry Hudson said Raytheon also illegally obtained a wide range of secret Pentagon documents.
  • In October 1994, Raytheon paid $4 million to settle a U.S. government claim that it inflated a defense contract for antimissile radar. The PAVE PAWS (Precision Acquisition Vehicle Entry Phased Array Warning System) system was designed to detect incoming submarine-launched ballistic missiles. The government claimed in a federal lawsuit that Raytheon inflated a contract to upgrade two of four PAVE PAWS sites by proposing to hire higher-skilled employees than were necessary for the job.
  • Just one year earlier, on October 14, 1993, Raytheon paid $3.7 million to settle allegations that it misled the U.S. Department of Defense by overstating the labor costs involved in manufacturing Patriot missiles. “The recovery of this money is yet another warning to contractors that the Truth in Negotiations Act’s information disclosure requirements will be strictly and sternly enforced,” Assistant Attorney General Frank Hunger said.
  • The Patriot missile system was not the spectacular success in the Persian Gulf War that the American public was led to believe. There is little evidence to prove that the Patriot hit more than a few Scud missiles launched by Iraq during the Gulf War, and there are some doubts about even these engagements. The public and the U.S. Congress were misled by definitive statements of success issued by administration and Raytheon representatives during and after the war.

DOW CHEMICAL EMPLOYEES PAC: $3,000

  • Dow was one of several manufacturers who began producing the napalm B compound under government contract from 1965. After experiencing protests and negative publicity, the other suppliers discontinued manufacturing the product, leaving Dow as the sole provider. The company said that it carefully considered its position, and decided, as a matter of principle, “its first obligation was to the government.” Despite a boycott of its products by anti-war groups and harassment of recruiters on some college campuses, Dow continued to manufacture napalm B until 1969. The USA continued to drop napalm bombs on North Vietnam until 1973.
  • Until the late 1970s, Dow produced DBCP (1,2-dibromo-3-chloropropane), a soil fumigant, and nematicide, sold under the names the Nemagon and Fumazone. Workers at Dow’s DBCP production plants were made sterile by exposure to the compound. These effects were consistent with animal experiments showing that DBCP sterilized rabbits. The workers successfully sued the company, and most domestic uses of DBCP were banned in 1977.
  • Areas along Michigan’s Tittabawassee River, which runs within yards of Dow’s main plant in Midland, were found to contain elevated levels of the cancer-causing chemical dioxin in November 2006. In July 2007, Dow reached an agreement with the EPA to remove 50,000 cubic yards of sediment from three areas of the riverbed and levees of the river that had been found to be contaminated. In November 2008, Dow Chemical along with the EPA and Michigan Department of Environmental Quality agreed to establish a Superfund to address dioxin cleanup of the Tittabawassee River, Saginaw River and Saginaw Bay.[48]
  • According to the EPA, Dow has some responsibility for 96 of the United States’ Superfund toxic waste sites, placing it in 10th place by number of sites.

GOLDMAN SACHS PAC: $7,500

  • A federal appeals court upheld the conviction of former Goldman Sachs Group Inc director Rajat Gupta, one of the biggest successes in federal prosecutors’ long-running probe to stop insider trading on Wall Street.
  • Federal prosecutors and Securities and Exchange Commission officials also investigated whether a senior Goldman investment banker, Matthew Korenberg, fed inside information to a Galleon Group portfolio manager named Paul Yook, according to separate reports in the New York Times and the Wall Street Journal.

THE WILLIAMS COMPANIES PAC: $4,000

  • In 2002, Williams Communications Group was sued for that company officials did not properly disclose the failing company’s true financial condition, and that officials’ public statements belied the firm’s plummeting fiscal picture. In 2007, the Williams Companies agreed to pay $290 million.
  • Boardwalk Pipeline Partners and the Williams Companies were fined $2.4 million for 18 incidents that took place between 2006 and 2013 that include failing to monitor corrosion and waiting to repair a natural gas line showing metal loss in Kentucky.

UBS (UNION BANK OF SWITZERLAND) AMERICAS PAC:

  • As is the case of BP, UBS is a foreign company and circumvents the prohibition on foreign contributions to political campaigns through its American offices. But that technicality is minor compared to the company’s other enterprises.
  • The activities of the Union Bank of Switzerland during World War II were not publicly known until decades after the war, when it was demonstrated that UBS likely took active roles in trading stolen gold, securities, and other assets during World War II. The issue of “unclaimed property” of Holocaust victims became a major issue for UBS in the mid-1990s and a series of revelations in 1997 brought the issue to the forefront of national attention in 1996 and 1997. UBS confirmed that a large number of accounts had gone unclaimed as a result of the bank’s policy of requiring death certificates from family members to claim the contents of the account. UBS’s handling of these revelations were largely criticized and the bank received significant negative attention in the U.S. UBS came under significant pressure, particularly from American politicians, to compensate Holocaust survivors who were making claims against the bank.
  • In January 1997, Christoph Meili, a night watchman at the Union Bank of Switzerland, found employees shredding archives compiled by a subsidiary that had extensive dealings with Nazi Germany. The shredding was in direct violation of a then-recent Swiss law adopted in December 1996 protecting such material. UBS acknowledged that it had “made a deplorable mistake”, but an internal historian maintained that the destroyed archives were unrelated to the Holocaust. Criminal proceedings then began against the archivist for possible violation of a recent Federal Document Destruction decree and against Meili for possible violation of bank secrecy, which is a criminal offence in Switzerland. Both proceedings were discontinued by the District Attorney in September 1997.
  • Long Term Capital Management (LTCM) was a U.S. hedge fund used for trading strategies such as fixed income arbitrage, statistical arbitrage, and pairs trading, combined with high leverage. Its collapse in 1998 led to a bailout by major banks and investment houses, and resulted in massive losses for UBS at a time when it had merged with Swiss Bank Corporation. However, UBS involvement with LTCM pre-dated the merger.
  • In early 2007, UBS became the first Wall Street firm to announce heavy losses in the subprime mortgage sector as the subprime mortgage crisis began to unfold. In May 2007, UBS announced the closure of its Dillon Read Capital Management (DRCM) division. During 2006 and 2007 the bank’s losses continued to mount in 2008 when UBS announced in April 2008 that it was writing down a further US$19 billion of investments in subprime and other mortgage assets. UBS’s total losses in the mortgage market were in excess of $37 billion, the largest such losses of any of its peers.
  • UBS announced in February 2009 that it had lost nearly CHF20 billion (US$17.2 billion) in 2008, the biggest single-year loss of any company in Swiss history. Since the beginning of the financial crisis in 2007, UBS has written down more than US$50 billion from subprime mortgage investments and cut more than 11,000 jobs.

UNITED TECHNOLOGIES CORP. PAC: $8,500

  • During the 2004 election cycle, UTC was the sixth largest defense industry donor to political campaigns, contributing a total of $789,561. 64% of UTC’s 2004 contributions went to Republicans. UTC was also the sixth largest donor to federal candidates and political parties in the 2006 election cycle. 35% of those contributions went to Democrats; 53% of the funds were contributed to Republicans.
  • In 2005, United Technologies was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush.
  • Researchers at the University of Massachusetts Amherst have identified UTC as the 38th-largest corporate producer of air pollution in the United States as of 2008. UTC released roughly 110,000 pounds of toxic chemicals annually into the atmosphere including manganese, nickel, chromium and related compounds.

UNITEDHEALTH GROUP PAC: $10,000

  • In 2010, UnitedHealth Group spent more than $1.8 million on lobbying activities to achieve favorable legislation, and hired seven different lobbying firms to work on its behalf. In addition, its corporate political action committee spent an additional $1 million on lobbying activities in 2010.
  • In 2006, the Securities and Exchange Commission (SEC) began investigating the conduct of UnitedHealth Group’s management and directors, for backdating of stock options. Investigations were also begun by the Internal Revenue Service and prosecutors in the U.S. attorney’s office for the Southern District of New York. The investigations came to light after a series of Wall Street Journal stories in May 2006, claiming backdating of hundreds of millions of dollars worth of stock options by UHC management. The backdating apparently occurred with the knowledge and approval of the directors, according to the Journal. On October 15, 2006, CEO William McGuire was forced to resign, and relinquish hundreds of millions of dollars in stock options. In December 2007, the SEC announced a settlement under which McGuire would repay $468 million, as a partial settlement.
  • In June 2006, the American Chiropractic Association filed a national class action lawsuit against the American Chiropractic Network (ACN), which is owned by UnitedHealth Group and administers chiropractic benefits, and against UnitedHealth Group itself, for alleged practices in violation of the federal Racketeer Influence and Corrupt Organizations Act (RICO).

WALMART STORES PAC: $6,000

  • Wal-Mart is the beneficiary of $96.5 million in economic development subsidies in Louisiana and $1.2 billion in tax breaks nationwide. http://www.walmartsubsidywatch.org/state_detail.html?state=LA Yet, in 2011, Walmart, four of whose owners are among the 11 richest Americans, decided to roll back health care coverage and to increase premiums for its employees. (Does this sound familiar, Bobby Jindal?) Wal-Mart still boasted that 90 percent of its employees had health coverage, neglecting to mention that more than half of those got their coverage through their spouses’ group coverage. The company provides no health coverage at all for new part time employees despite the company’s 24.7 percent gross profit martin that same year.
  • An April 2012 New York Times investigative report revealed that a former Walmart executive alleged that, in September 2005, Walmart de Mexico paid bribes throughout Mexico in order to obtain construction permits, information, and other favors. Concerns were raised that Walmart executives in the United States concealed the allegations. Reportedly, bribes were given to speed up construction permits, which gave Walmart a substantial advantage over its business competitors. A follow-up investigation by The New York Times published December 17, 2012, revealed evidence that regulatory permission for siting, construction, and operation of 19 stores were obtained through bribery.
  • A paper published in Farm Foundation in 1997 found that some small towns can lose almost half of their retail trade within ten years of a Walmart store opening.
  • A 2004 paper by two professors at Penn State University found that counties with Walmart stores suffered increased poverty compared with counties without Walmarts due to displacement of workers from higher-paid jobs in retail stores which customers no longer choose to patronize. A study in Nebraska looked at two different Walmarts, the first of which had just arrived and was in the process of driving everyone else out of business by cutting their prices to the bone. In the other Walmart, “they had successfully destroyed the local economy, there was a sort of economic crater with Wal-Mart in the middle; and, in that community, the prices were 17 percent higher.”
  • The Economic Policy Institute estimates that between 2001 and 2006, Walmart’s trade deficit with China alone eliminated nearly 200,000 U.S. jobs. Another study found that a new store increases net retail employment in the county by 100 jobs in the short term, half of which disappear over five years as other retail establishments close.
  • Walmart has been criticized by labor unions, community groups, grassroots organizations, religious organizations, environmental groups, and even Walmart’s own customers and employees. They have protested against the company’s policies and business practices, including charges of racial and gender discrimination. Other areas of criticism include the corporation’s foreign product sourcing, treatment of product suppliers, employee compensation and working conditions, environmental practices, the use of public subsidies, the company’s security policies and slavery. Wal-Mart denies doing anything wrong and maintains that low prices are the result of efficiency.

(Editor’s note: We’re re-posting yesterday’s story after our source informed us we had been given the incorrect name of the telephone answering service hired (on a no-bid contract) by DOA to attempt to provide answers to the growing concerns of members of the Office of Group Benefits)

The news out of Division of Administration (DOA) and the Office of Group Benefits (OGB) just keeps getting more and more bizarre and emerging revelations only serve to solidify the fact that Commissioner of Administration Kristy Kreme Nichols and OGB Executive Director Susan are woefully in over their respective heads.

It’s not just that the Jindal administration just hired two new six-figure salary employees from Blue Cross/Blue Shield (BCBS) to unfix what Kristy Kreme and Susan West fixed—although that’s part of it. Paying Thomas Groves $220,000 a year must smart, given that it is $50,000 more than West pulls down as head of the agency. Elise Cazes will make $106,512 as group benefits administrator.

And it’s not that the OGB trust fund has dwindled from a $540 million pre-Piyush Privatization balance to less than half that amount today—although that’s part of it.

And it’s not that costs to some 230,000 state employees, dependents and retirees who are members of OGB will be going up by some 47 percent and benefits will decrease, Kristy Kreme’s soothing assurances to the contrary notwithstanding—although that’s part of it.

And it’s not that legislators and legislative staff members are eligible to participate in a better plan, LSU First (an option not even available to Louisiana’s other public university employees)—although that’s part of it.

And it’s not that the administration lied to state employees back in 2012, telling us that there would be no premium increases or benefit cuts—although that’s certainly part of it and it doesn’t help that the administration continues to churn out many of those same lies.

And it’s not that most of the staff at an agency that was operating at smooth efficiency and was widely approved of by member employees was fired in order to allow BCBS to take over as the OGB third party administrator (TPA) to handle claims—although that was a big part of it.

No, it isn’t any one of those things. It’s all of them, the cumulative effect of an administration rolling over its loyal employees, forcing many of them into early retirement (if they’re eligible for retirement) or worse, unemployment.

But as if that weren’t bad enough, seemingly with each passing day, the plot at DOA and OGB continues more and more to take on the appearance of a theater of the absurd than it does an administration of mature individuals responsible for running a $25 billion a year state government.

The most recent blunder involved the layoff of about two dozen OGB employees “because there wasn’t enough work for them,’ leaving a skeleton staff unable to man the telephones to take questions from thousands of OGB members, particularly retirees, wondering if they were going to continue to have health coverage.

To fill that vacuum, BCBS employees were brought in to answer the phones but were unable to answer specific questions because of their unfamiliarity with OGB policies.

So then to solve that problem, 20 DOA employees were brought into OGB’s IT section but have done no better.

The obvious answer? Ansafone Communications.

Who?

Well, it’s not Answerphone, a company out of Albany, N.Y., as we were originally informed. Our IT (“I’ll Tell”) source informs us the spelling was given to us incorrectly and that it should have been Ansafone out of Santa Ana, California, and Ocala, Florida. And the contract is for about a million bucks, not the $2 million we were originally told.

Still, it’s another of those emergency contracts that DOA is issuing with reckless abandon with no requests for proposals, no bids and apparently, if the Alvarez & Marcel (A&M) contract, which went from about $4.2 million to more than $7 million at warp speed, is any indication, no ceiling.

Of course, all contracts must be approved by the Office of Contractual Review. But the Office of Contractual Review works for…(ahem), Kristy Kreme.

Not much more is known about Ansafone than we were able to learn about Answerphone except Ansafone does include a little more hype on its web page: http://www.ansafone.com/

Kristy Kreme assures us in a Baton Rouge Advocate news story  that Ansafone “in health care enrollment” and that “Ansafone representatives have experience with managing benefit plans and have been trained extensively on OGB and its offerings.” Apparently, their “extensive training” of a few days better qualifies them than the OGB employees who did that for years before they were shown the door.

http://theadvocate.com/news/10253537-123/ogb-hotline-hours-extended

It does have on its web page a cute “Five Star Recipe for Customer Service Failure,” however. http://www.ansafone.com/five-star-recipe-for-customer-service-failure/ Kristy Kreme and Susan West might want to peruse that a bit. Some of the ingredients included:

  • A “tablespoon of no communication,”
  • A “dash of not caring,” and
  • “4 ounces of empty promises.”

Sounds like something this administration cooks up virtually every day.

Frankly, we don’t see the need to pay these folks. In fact, Kristy Kreme may want to consider collecting royalties from Ansafone for stealing the Jindal recipe for failure.

So while our source provided us with the name of the wrong company, we will gladly take our one error, embarrassing though it certainly is, over the endless examples exhibited by Jindal, Kristy Kreme, and whoever happens to in charge today at OGB. We would print the name, but given the new salary structure there, we’re not exactly sure who that is and we don’t want another glaring error—not this soon, anyway.

Perhaps we can get some answers next Friday (Sept. 19) when the Joint Legislative Committee on the Budget meets in House Committee Room 5 at the state Capitol at 9 a.m. or the following Thursday (Sept. 25) when the House Appropriations Committee meets at 10 a.m. in the same committee room. Both meetings are being held to address OGB’s rising costs, falling revenue and dwindling benefits.

Maybe Kristy Kreme and Susan West can both appear and enlighten the legislators tag team-style with their combined wizardry.

But basically, what we know is this:

  • Two dozen OGB employees were fired because they didn’t have enough work to do;
  • BCBS employees had to help on the phone lines but were incapable of answering the multitude of questions from members;
  • About 20 DOA employees were brought in to help on the phone lines but that still wasn’t enough;
  • A firm with a sketchy web page about which little is known was hired at a cost of $1 million to provide 100 operators in California and 100 in Florida to help out on the phones with problems in Louisiana.

All things considered, we can only borrow a phrase from the Ol’ Perfesser, Casey Stengel who said of his 1962 New York Mets baseball team (that lost 120 of 162 games):

“Can’t anyone here play this game?”

Board of Elementary and Secondary Education (BESE) member Walter Lee has been indicted by a state grand jury and the FBI is investigating State Rep. Joe Harrison (R-Gray)—both for double billing for travel.

Investigators may want to take a look at the expense records of State Rep. and Shreveport mayoral candidate Patrick Williams (D-Shreveport).

Lee’s indictment by a DeSoto Parish grand jury accuses him of the felony theft of $3,968 in fuel expenses and $1,578 in lodging in meals charged to both BESE and to the DeSoto Parish School Board at a time when Lee was simultaneously serving as DeSoto School Superintendent and as a member of BESE.

A state audit used as the basis of Lee’s indictment said he collected travel expenses from BESE for attending state board meetings even though he used a parish school system credit card to pay for those expenses and failed to reimburse the school system after receiving payment from BESE.

DeSoto District Attorney Richard Johnson, Jr. said Lee also terminated a lease early on a vehicle which cost the school system around $10,000 and then got a substantial discount on the purchase of another vehicle shortly thereafter.

Williams’ expense reimbursements, however, more closely resemble those of his colleague in the House.

Harrison has been ordered by federal investigators to produce travel expense records after the New Orleans Times-Picayune revealed in a lengthy investigative series that Harrison was reimbursed more than $50,000 by the House for travel in his district from 2010 to 2013—travel that he had also charged to his campaign.

House reimbursement records and campaign expense records reveal that in 2012 alone, Williams systematically doubled his campaign and the House for more than $4,000 for expenses that included postage, subscriptions to the Shreveport Times, travel to and from Baton Rouge, hotel accommodations in Washington, D.C., airport parking, cab fare, and air travel.

LouisianaVoice was alerted to Williams’ expense payments by former Shreveport attorney Michael Wainwright who now lives in North Carolina.

Wainwright said Williams accepts campaign contributions which then pays “thousands of dollars” in travel and other expenses. “Rep. Williams then bills the taxpayer for those same expenses (and) then keeps the reimbursement checks. He has converted the money to his personal use.”

Wainwright said the practice “is conduct which seems to fall squarely within the definition of theft,” which he said is defined under Louisiana Criminal Law as “the misappropriation or taking of anything of value which belongs to another, either without the consent of the other to the misappropriation or taking, or by means of fraudulent conduct, practices or representation.”

He provided us with a detailed itemization which we verified through our own check of Williams’ campaign expense report and House reimbursement records.

The following list includes the month of the House expense report, the amount and purpose. In the case of each expense item listed, Williams also billed his campaign:

  • January: $113.73—Purchase Power Postage;
  • February: $52.88—Shreveport Times Subscription;
  • April: $85.51—Pitney Bowes Postage;
  • May: $53.95—Shreveport Times Subscription;
  • May: $107.99—Pitney Bowes Postage;
  • June: $65.68—Pitney Bowes Postage;
  • August: $17.98—Shreveport Times Subscription;
  • October: $37.04—Shreveport Times Subscription;
  • October: $85.48—Pitney Bowes Postage;
  • November: $17.98- Shreveport Times Subscription;
  • December: $17.98—Shreveport Times Subscription;
  • November 5: $70.00—Fuel & Travel to Baton Rouge;
  • November 29: $50.32—Fuel & Travel to Baton Rouge;
  • December 4-8: $40.00—Shreveport Airport Parking;
  • December 4-7: $838.16—Hilton Hotel, Washington, D.C. (Campaign billed for entire $912.71 amount);
  • December 4-8: $169.94—Washington Travel Expense (Note: Rep. Williams was paid $745.00 in per diem expenses by the State of Louisiana while attending a NCSL conference in Washington, DC Williams also charged his campaign account $169.94 for the following per diem expenses related to this trip: Delta Airlines Travel baggage ($25), Supreme Airport Shuttle ($13), Hilton Hotel ($103), Meals ($28.44);
  • February 1: $158.00—Holiday Inn, Lafayette;
  • March 12-16: $197.00—In Session Fuel & Mileage (This amount was billed to his campaign while the House paid $291.38);
  • March 17-20: $327.04—In Session Fuel & Mileage (billed to campaign; House paid $582.75);
  • March 31-April 13: $373.09—In Session Fuel & Mileage (billed to campaign; House paid $582.75);
  • April 14-27: $335.00—In Session Fuel & Mileage (billed to campaign; House paid $582.75);
  • April 28-May 11: $257.00—In Session Fuel & Mileage (billed to campaign; House paid $582.75);
  • May 12-25: $262.12—In Session Fuel & Mileage (billed to campaign; House paid $582.75)
  • May 26-June 4: $146.00—In Session Fuel & Mileage (billed to campaign; House paid $582.75);

This is the same Rep. Patrick Williams who in 2011 authored House Bill 277 which would have required the posting of the Ten Commandments in the State Capitol. There’s no word as to whether his bill proposed deleting the Eighth Commandment.

 

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